API’s are definitely becoming mainstream. It is certainly mainstream for web companies. So why not SaaS companies ?

SaaS providers serve different customers. As SaaS has become more  mainstream (accepted by fortune 2000) customers, the need for API’s has grown – firstly for integration and secondly to build customer apps. The need for integration has been solved by SaaS integration vendors like CastIron building adapters, but having been in that business for a long time, I know they could use standard APIs from the vendors.

The need for custom applications is also increasing as customers are building composite applications that use data stored in their ERP (on-premise), CRM (on-line) and web 2.0 applications like Google maps.

But at the end of the day SaaS vendors will provide the API’s for 3 reasons:-
1. competitive differentiation – customers ask for it when evaluating similar SaaS providers
2. increase stickiness – to embed themselves in a customer’s enterprise applications
3. new revenue stream – as an add-on MRR (monthly recurring revenue) source.

These are compelling reasons! API’s are becoming mainstream and yes, almost all SaaS vendors need to have an API.

(And of course, once you have one, API management becomes important to differentiate your service and customer sat..)

- 50% of all folks interviewed (enterprises with more than $1B in revenue) are doing cloud computing
- 66% of those do not have a security strategy
- RSA has put together a “Security for Business Innovation” council comprised of 10 security executives chosen by RSA.

Kudos to RSA for taking a customer centric approach. There is a shift happening in enterprise computing, it is becoming Web centric. The Web has been very successful in creating de facto standards without formal standard bodies, hopefully we have learned from it. Much like the Web, cloud computing adoption will have a life of it is own. Instead of trying to control it, lets guide it.

Market/Customer:
This is by far the most important perspective. Let’s take a current example: as cloud computing becomes part of enterprise computing, customers will go with the hybrid approach. if you keep hearing that (as we have), it becomes very clear that having an on-premise and on-demand offering will fit very well with their needs/strategy.

Strategy:
Independent of the technical reasons to do or not to do, there are probably strategic reasons that are more important. For example, Salesforce.com probably got many requests to make their technology available on-premise. Hard to do when the KEY differentiation is ‘no software.’ The other aspect is DNA. Running an on-demand application needs different kinds of folks that the ones traditional software companies usually have.

Technology/Architecture:
- On-premise software is designed to ship, so one has to worry about size of image, install scripts, platform dependencies etc. These factors affect the overall architecture much more than one thinks.
- On-demand software/site is designed for scale, ease of use, zero downtime etc.
- If on-premise software is designed for simplicity and scale, it is much easier to make it available available on-demand – the other way round is much more difficult.
- Much like open source. Technology that was not designed to be open source is very hard to open source.

In general customers want flexibility, too much of which leads to increased complexity. Vendors have to start by answering simple questions like why and how.

SOA is an approach. Much like OOP (object oriented programming). Make building and maintaining IT systems more efficient.

Cloud Computing is about enabling technology. Much like Client/Server or Web Computing, the drivers are costs and time to market/revenue.

ALL customers that we talk to get the difference. Not sure why there is so much confusion.

“Cloud computing” contains the seeds of IT’s next generation – YES. This is real, much like client server and Web computing… in fact probably has benefits of both – cost and revenue.

Cloud’s customers (slide #16) – great customer segmentation. would like to add that almost all enterprise customers are using cloud for revenue or customer service related projects and using time to market/costs as the major drivers.

The systems vendors will not dominate (slide #22). This one requires a double take. James makes the point that for a vendor to succeed, it requires operations excellence in Web scale data center operations and system companies have expertise in managing enterprise data centers – wrong skills. This may seem like Wow! comment for many have not been through this, but for anybody who has built, deployed and managed enterprise apps. vs. Web apps they know the difference. The mindset is very different. The smart vendors are aware of this and will either focus on their sweet spot or acquire/grow into this space.

Another big benefit to enterprise cloud adoption will be a survival of the fittest among business – you really do need to start the move to the cloud to stay a viable business in today’s climate where the slightest edge means everything.

- Enterprise customers will claim that they have been doing private cloud computing. Have noticed that in our discussion w/ customers also. Even though this does fit w/ the virtualization part of the definition of privates clouds, it is hard to argue w/ them.

- Private/public clouds – interoperability between private and public cloud implementations has to be seamless – security, privacy issues have to be worked out. We have seen an increasing need for ‘gateway’ type technology to solve this issue. We’re already offering a cloud gateway solution at Sonoa – stay tuned on plans for a bigger product line .

Vishal is a smart dude, he needs to get out there and talk about cloud
computing more often.

Let me start by saying every customer that I have talked to in the past 12 months says – that they will be going with a hybrid approach – combination of public and private clouds. The following are few things to think about before you decide on how you want to proceed.

- Type of enterprise – if you are a Web-based business, then public cloud is a no brainer. Regulated industries like insurance and now financial services will have a tougher time to go only w/ public clouds. So you might start with a VMware-based private cloud offering and then as you decide to use or expose APIs/services to customers/partners or your compute cycles for a point project are exponentially high, you might opt for adding the public cloud to your strategy.

- Use case – what you are doing will define how you do it. If the data is very sensitive and cannot leave the firewall, then you might decide to start with the private cloud. Just remember that is what people said about sales/forecast data. Salesforce.com is thousands of customers and their data seems pretty secure. Nevertheless, security of the data will be important criteria in deciding the private vs. public discussion.

- Cloud provider type – self services (l EC2, Google) or high touch (Rackspace, Sunguard, etc.). This is mostly about how you would like to access services. High touch has its benefits, but is also expensive. Over a LONG period of time the lines will blur, but at least for the next decade the difference in approach will be stark.

- Control – this goes back to the use case discussion above. Enterprises will want visibility and control. Granular control on things like authentication, authorization, data masking, etc. As with much of the Web/cloud approach, it has to be simple and has got to scale.

Now for the controversial part. Much has been said about the Google outage. Recently blogged about it here. Rob Enderle recently used the Google outage to assert that private cloud models will win over public cloud models. Even though he makes good points, it is not what our customers are telling us.. This is not an either or discussion. Enterprise customers will do both.

So what can we learn from it, especially the enterprises that are thinking of adopting cloud computing? “Visibility” & “Control” are important. It’s incredibly difficult to control how people are using your cloud if you’re unable to see who, when and how people are accessing it. Once a “traffic jam” is visible, then you manage/limit/route traffic appropriately.