How fast is the transition of On-Premise ISVs to offering SaaS products?
Dave Key
and WorkDay. The incumbent vendors like SAP make some half-hearted
efforts like SAP On-Demand, or Magento (eComerece vendor) with Magento
GO -- both these examples are low end products.
Gartner projected $12.1B in SaaS Revenue in 2011 growing at a CAGR of
21%. I would like to know how much is that $12 billion is from pure
SaaS vendors like Salesforce, versus the portion of SaaS revenue from
legacy vendors like Oracle and SAP that are sticking their toe in the
water.
My belief is that some legacy vendors will make the transition to SaaS
(IBM did survive the loss of mainframe revenue) and some will become
roadkill.
Does anyone have any data of the revenue split between pure play SaaS
vendors versus the legacy vendors entering the market of the percent
of the total SaaS market (by revenue)? Any projections on how this
split will change over the next few years? Will the incumbent vendors
wake up and ultimately dominate the SaaS market or will they largely
die off and the new market will be dominated by new vendors?
da...@cloudstrategies.biz
Ian Mills
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Dave Corley
Dave
Pietrasanta, Mark
Your technical differences are true-ish, but profitability numbers don’t necessarily correlate.
Selling a one-time license is hugely profitable, much moreso than a month-to-month license that can be terminated at any time.
Once you hand over the CD to the customer, you’re done (over simplified from a rev-rec standpoint, but you get the point). If they stick it on a shelf, you’ve still made all your money. The cost of the CD is $0, so from that perspective it’s all profit. Then you have your maintenance fees to cover all the stuff you mention, and that should be entirely self-funded. The end result is hugely profitable licenses, and moderately profitable maintenance. (The license profits get fed back into product development, but let’s assume that’s a wash with SaaS.)
For SaaS, you have constant ongoing *service* you have to provide to keep your customers paying each month, way more than the license/CD model. And, in general SaaS-per-month only equals license after 2-4 years. So you don’t even generate the same revenue until at least 2 years, and you’re likely spending lots more on service than the license model. And you don’t get any maintenance dollars (but to your point you should have much lower maintenance expenses).
Anyway, the license + maintenance model is extremely profitable, and should be much more profitable than SaaS when run properly. I think that’s why you don’t see the legacy license + maintenance vendors jumping into SaaS – it would have a significantly negative impact to their existing business model.
From a SaaS perspective, a new vendor can quickly start up and offer SaaS, with minimal start-up expense, with no existing revenue at risk of being cannibalized, and is motivated to be more service oriented. The world has changed, and this is certainly where things seem to be going, but it’s sort of new-versus-old, and it makes sense.
-------
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Ian Mills
Dave Corley
Dave
Amy Wohl
You should ask the customers – especially new customers. They want SaaS and you can either provide it or get out of the way of your soon-to-be-successful competitors.
A SaaS Sale is a combination of software, software maintenance, and services (including infrastructure). Explain it properly and you can get properly paid. And no, it isn’t a revenue up front model – unless you sell enterprise software in which case customers will pay you for a year in advance in return for an appropriate discount.
Amy Wohl
Amy D. Wohl
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From: cloud-c...@googlegroups.com [mailto:cloud-c...@googlegroups.com] On Behalf Of Dave Corley
Sent: Wednesday, January 04, 2012 11:29 AM
To: cloud-c...@googlegroups.com
Cc: cloud-c...@googlegroups.com
Subject: Re: [ Cloud Computing ] How fast is the transition of On-Premise ISVs to offering SaaS products?
Thanks, Ian and Mark. Very much appreciate your (and others in this group) insight.
Ian Mills
Geoff Kline
It is going to happen, and is happening. I currently work for an ISV that is doing just this. The transition is painful from all directions: revenue, operations, infrastructure, application re-architecture to work in the cloud, support. But due to the proliferation of mobile devices the market demands it. It's a matter of adapt or become extinct in the free market. In the end there will be niche markets for ISV to keep the traditional model alive, but as we are all witnessing the move to the cloud is real, and happening now. It will take another couple of years for this to all play out but I don't see it stopping.
Dan Mason
As Geoff reports from personal experience, customers will drive the move to SaaS, not vendors. It makes sense that CIOs who take the plunge to SaaS for some key applications will naturally want to explore SaaS for everything, rather than continuing to support a dual model. Premise-based software will be around forever, but ISVs will pop up to exploit any application space where there is not currently an entrenched SaaS vendor for that application. So, ISVs who opt not to create a SaaS version do so at their own peril, and can expect new competition to fill that need.
Granted, the revenue model for SaaS (as well as the sales approach and a million other things) will be different and not as lucrative for many ISVs, but that's the nature of disruptive technology.
Geoff is your company using any specialized tools (say, Electric Cloud, etc.) as you adapt to the Cloud? Do you need new skillsets in dev and product management? How did you get started - seems like we have such a fluid environment that making decisions around design/architecture/positioning would be extremely difficult and something of a finger in the wind.
Here's some Gartner info on SaaS acceleration in the CRM space in particular, I'm sure similar analyses can be found for other apps:
http://softwarestrategiesblog.com/2011/04/02/gartner%E2%80%99s-hot-crm-applications-for-2011-show-saas-is-accelerating-in-the-enterprise/
Thanks to all for this good thread
-Dan
Geoff Kline
To answer your question about getting started. It was the market driving the decision. The ISV I work for is sales driven traditional on premise model. The skill sets needed to execute on this transition were not in house and it is a learn as you go. I would look at it like a startup within an established ISV. Even getting to that perspective took some time for all deparents to understand what it means to turn a traditional ISV into a hosting company: huge change across all departments. On the flipside the decision makers listened to the market, and understand they need to participate in this disruptive technology or another company would step in and fill the SaaS void in an economy set on corporate cost cutting. In other words they have the vision!
Special tools: nothing radical all off the shelf private cloud building block. VMware at the heart and windows guests running traditional on premise apps trying to do the best they can operating in the cloud.
On a side note I always wondered how many ISV were doing just what my company is doing, as the move presents so many challenges, but this with vision and the ability to execute on that vision wil still be around in 5 years.
Luc Van Ballaer
Thanks all, Amy is right,
To add on that: for an ISV it is more than just comparing profit and products. It is about changing a business model for an ISV and adjusting the organization to that.
This is why we see it is a big step for ISVs to take.
And yes, it is about demand, but given the complexity of the transition (not only product), an ISV better be ready when the market is asking for the products, and customers actually do today.
Luc Van Ballaer
C3Wave
Mobile: +32 475 41 32 35
Ian Mills
Rubert, James M
I think SaaS vendors should be making huge profits. Here is why:
1. The use multi-tenant architecture and systems using the multi-tenant software development you have just reduced the license cost. If you are building and using a license per application on the server your costing your company way too much.
2. The multi-tenant architecture you do NOT need to virtualized your servers. WHY, because you are selling one SaaS product with many tenants and have a cluster of app servers. Why would you virtualize your servers when you would build a cluster of servers running a single app? You would not… Besides virtualization consumes 10 -17 percent of your server resources just to manage your single app. And you would reduce your license cost.
3. The database would either be a huge database or a partitioned based on the data architecture needs from the app. But the idea of the app servers would cross over into the database as well. Heck if you knew how to code within your specific data requirements you could use Hadoop and BHive and save a ton of license money there as well.
4. The only difference would be the additional cost of a security architecture. Your company gets hacked and word gets out you are out of business because no one can trust your software.
The based of a SaaS multi-tenant architecture if the vendor is pricing just below the old school drop in your customer lap a DVD or down load the software, the SaaS vendor should be making a killing. If they are not I would question their approach.
Jim
Amy Wohl
Interesting, but a SaaS vendor has to live within the licensing models of his suppliers. Many still use traditional licensing models and won’t let you take advantage of running multiple instances of you r application for multiple clients against one cop y of a license. We’re in transition and this should sort itself out eventually, but we’re not at eventually yet.
Amy D. Wohl
Editor, Amy Wohl's Opinions
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Larry Cable
On Jan 9, 11:42 am, "Rubert, James M" <james.m.rub...@boeing.com>
wrote:
>
> 1. The use multi-tenant architecture and systems using the multi-tenant software development you have just reduced the license cost. If you are building and using a license per application on the server your costing your company way too much.
>
> 3. The database would either be a huge database or a partitioned based on the data architecture needs from the app. But the idea of the app servers would cross over into the database as well. Heck if you knew how to code within your specific data requirements you could use Hadoop and BHive and save a ton of license money there as well.
>
> 4. The only difference would be the additional cost of a security architecture. Your company gets hacked and word gets out you are out of business because no one can trust your software.
>
> The based of a SaaS multi-tenant architecture if the vendor is pricing just below the old school drop in your customer lap a DVD or down load the software, the SaaS vendor should be making a killing. If they are not I would question their approach.
>
> Jim
>
mutli-tenant architecture are correct, your extrapolation about the
business model and thus profits is flawed/incorrect.
Multi-tenancy and virtualization (at least in this context) enable a
SaaS provider to increase the utilization of the underlying
infrastructure and reduce the administrative overhead (vendor TCO) of
offering
such a service. Increasing utilization is always good, since the
majority of licenses are per CPU (which virtualization complicates) so
using fewer CPUs is always good from that perspective.
The (economic) advantages of SaaS to enterprise customers v.s. an on-
premise deployment (the traditional model of Enterprise IT) is gross
reduction of capital and operational costs (this includes software
licensing and support, but it also includes equipment, utilities,
facilities, staffing, etc etc).
Just focusing on SaaS/Cloud vs Enterprise; such a customer avoids many
of these capital investments (s/w license and support, equipment,
staffing) however these costs are now born by the SaaS vendor, and
thus are reflected in the subscription cost structure of the vendor,
licensing and support while significant are not the major cost of
service, and the reductions of multi-tenancy & virtualization are not
the significant either.
Additionally, the Enterprise s/w licensing and support model differs
greatly from the Subscription model; an Enterprise Software Licensing
and Support revenue model is extremely profitable with significant
margins
for the vendor; requiring a capital investment from the customer to
initially acquire the license and subsequently to maintain support and
maintenance with the vendor. The subscription model differs, there is
no significant capital
investment required by the customer, they purchase the service based
upon actual or anticipated usage, and the vendor margins are much much
lower because there is an expectation that a subscription is a
much lower overall cost than the Enterprise model.
In practice it is much less profitable for the vendor, their TCD and
TCO are much higher, and their revenue model (Enterprise, SaaS) is
fundamentally changed, with lower margins expected from the customer,
the advantage
is that the revenue stream is now (arguably) more sustainable/
predictable, but the overall revenue stream and gross margins are much
lower than the Enterprise license/support model.
Tim M. Crawford
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Juan J.
> Interesting, but a SaaS vendor has to live within the licensing models
> of his suppliers. Many still use traditional licensing models and
> won’t let you take advantage of running multiple instances of you r
> application for multiple clients against one cop y of a license.
> We’re in transition and this should sort itself out eventually, but
> we’re not at eventually yet.
What about open source?
Even most projects aren't multi-tenant, the cost of convert them to run
several instances it's definitely smaller than building a new solution
from scratch.
There are lots of open source projects that can be very profitable in a
SaaS model. Acquire know-how, customize, communicate upstream and
provide a hosted solution with support.
Regards,
Juan
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Development, MEMSET
mail: ju...@memset.com
web: http://www.memset.com/
Memset Ltd., registration number 4504980. 25 Frederick Sanger Road, Guildford, Surrey, GU2 7YD, UK.
Amy Wohl
There are a number of SaaS vendors who will provide you with any version(s) of pricing you prefer, keep your usage statistics, report them to you, and do the billing to customers and reporting to software vendors, if you want. You can try to keep manual records yourself but ti doesn’t scale – and part of the business model for SaaS service providers is to use the tools.
Amy D. Wohl
Editor, Amy Wohl's Opinions
1954 Birchwood Park Drive North
Cherry Hill, NJ 08003
Follow my blog at http://www.amywohlsopinions.com
Amy Wohl
expect and require a name brand product they specify. If you can more them
to an open source product, that could enhance your profit, but it may make
your vulnerable who can offer the desired software.
Amy D. Wohl
Editor, Amy Wohl's Opinions
1954 Birchwood Park Drive North
Cherry Hill, NJ 08003
856-874-4034
a...@wohl.com
http://www.wohl.com
Follow my blog at http://www.amywohlsopinions.com
-----Original Message-----
From: cloud-c...@googlegroups.com
[mailto:cloud-c...@googlegroups.com] On Behalf Of Juan J. Martínez
Sent: Thursday, January 12, 2012 3:21 AM
To: cloud-c...@googlegroups.com
Subject: RE: [ Cloud Computing ] How fast is the transition of On-Premise
ISVs to offering SaaS products?
What about open source?
Regards,
Juan
--
Rubert, James M
Green field SaaS:
I would architect the solution security model with the functionality of the service. The architecture would leverage the containers of the application server for state and the storage of the data would depend on the type of data.
The license for most App servers and databases are by the CPU. Since the architecture does not care what CPU it runs on the load balancer tries to keep the servers at say 75% all day long. Since I am paying for the license at a CPU the CPU does not care if customer A or B or C is running on that CPU. Thus the multi-tenant approach. Getting as much work out of a serve as I can.
I love the way Juan thinks. I would also leverage as much open sources as I could safely use. If my front end is consumed by the security model really only have the front end license cost. If I can use a product that has per CPU and NOT customer I am in. The ones that do not provide the per CPU license cost I would not do business with. As others have said they will get the message and move on...
Brown Field:
Here is what I think the main stream companies have done to SaaS. Those established companies have put a service front end and that is it. In which, those companies cannot compete with the green field companies. They have not re-architected their product. They put a web service front end place a SaaS sticker on it, host it on Amazon and we are good to go. I do believe this is just marketing folks and companies trying to sell something they really do not have. BTW, this is great for the Green field companies. They get to come in at rock bottom charge lower than the brown field companies but not too much lower and reap the rewards.
So I agree with you regarding there are issues. But the companies that do it right are make way more money than brown field companies.
Jim
-----Original Message-----
From: cloud-c...@googlegroups.com [mailto:cloud-c...@googlegroups.com] On Behalf Of Juan J. Martínez
Sent: Thursday, January 12, 2012 12:21 AM
To: cloud-c...@googlegroups.com
Subject: RE: [ Cloud Computing ] How fast is the transition of On-Premise ISVs to offering SaaS products?
What about open source?
Regards,
Juan
--
James
There's an interesting PwC report (Global 100 Software Leaders Key
players & market trends: http://www.pwc.com/us/en/technology/publications/global-100-software-us-rankings.jhtml)
that should shed some light on your question. It's not immediately
current (December 2010), but there are some interesting numbers.
According to PwC, in 2009, US software vendors (traditional non-SaaS)
generated 3.7% of their revenues from SaaS; and EU vendors 1.1% of
their revenues from SaaS. In the same report, the US has a 44% market
share and Europe has 36% market share by revenue (License, Maintenance
and Support).
According to Gartner, in 2010, the WW installed enterprise software
market grossed about $104 Billion. So, roughly, we could say that
installed software vendors (US & EU only ) brought in nearly $5
Billion in revenues in 2010. Leaving ~$7B for pure SaaS players.
(As an aside, also according to Gartner, installed software is still
growing at around 12% and will be $154B by 2014. Installed software
isn't going away - have you installed an app on your phone recently?
How about that for a trend? ;)
As to your last comment, traditional ISVs are very much "awake".
While some ISV CEOs may position the cloud as a fad/irrelevant/non-
strategic/etc. the smart companies are out there experimenting with
technologies, use-models, and business models.....but most
importantly, talking to their customers.
Counter intuitively, not everyone wants SaaS. At least, not for a
while, or not as it is. (I discuss this a bit in a piece I wrote
here: http://blog.softwareadvice.com/articles/enterprise/the-cloud-and-why-installed-software-isnt-going-away-1013112/)
Having said that, we're in an extremely disruptive period, and the
incumbents could quite easily miss the boat and get left behind.
- James
Xuropa Inc.
Software Sales Cloud Platform
http://www.xuropa.com
http://in.linkedin.com/in/jamesacolgan
James
The large software vendors are already in the business of providing
services with their software, so they're used to that piece of the
business moving forward.
There are indicators that customers will want their traditional
software as-is, but delivered via the cloud. In this case, the tricky
piece is going to be the underlying infrastructure. How to position
and price that so that it's acceptable to customers, does not impact
software margins, and is easy to buy and pay for by the customer.
Fortunately, IaaS vendors are fighting to the bottom in pricing while
working with PaaS vendors who can package and price compute to fit the
needs of the customer.
--
Xuropa Inc.
Software Sales Cloud Platform
http://www.xuropa.com
On Jan 3, 2:30 am, Ian Mills <i.c.r.mi...@googlemail.com> wrote:
> No numbers, but I suspect the same motivation as the system software
> vendors in the and the PaaS space, it is so much easier to make money
> selling a piece of software and exiting, with the cash, than sticking
> around to provide a service, that ultimately may or may not be used, that
> while you can you would be foolish not to.
>
>
>
>
>
>
>
>
>
>
> > The big SaaS winners have been the pure play vendors like Salesforce
> > and WorkDay. The incumbent vendors like SAP make some half-hearted
> > efforts like SAP On-Demand, or Magento (eComerece vendor) with Magento
> > GO -- both these examples are low end products.
>
> > Gartner projected $12.1B in SaaS Revenue in 2011 growing at a CAGR of
> > 21%. I would like to know how much is that $12 billion is from pure
> > SaaS vendors like Salesforce, versus the portion of SaaS revenue from
> > legacy vendors like Oracle and SAP that are sticking their toe in the
> > water.
>
> > My belief is that some legacy vendors will make the transition to SaaS
> > (IBM did survive the loss of mainframe revenue) and some will become
> > roadkill.
>
> > Does anyone have any data of the revenue split between pure play SaaS
> > vendors versus the legacy vendors entering the market of the percent
> > of the total SaaS market (by revenue)? Any projections on how this
> > split will change over the next few years? Will the incumbent vendors
> > wake up and ultimately dominate the SaaS market or will they largely
> > die off and the new market will be dominated by new vendors?
>
> > --
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James
There is a "third way" - delivery of installed apps as-is via a cloud
platform. This would resolve a lot of the challenges that you raise
about the current sales and support model of installed software.
While this distribution model is not multi-tenant (a key source of
SaaS margins), with IaaS costs low and dropping all the time (and
likely to continue), compute can be charged for and will eventually
become a non-issue. Maybe not for all use-models, but for many.
--
James
Xuropa Inc.
Software Sales Cloud Platform
http://in.linkedin.com/in/jamesacolgan
http://www.xuropa.com
> I'd suggest that SaaS profitability is much greater than packaged app profitability.
>
> Support expense is so much more than a customer service expense for packaged apps. Because the app is dropped in the lap of every end user, each user has their own "version" of that app. Over the years, the number of deployed versions of any packaged app expands as it's user count increases.
>
> Backwards and forward compatibility, different bug fixes for different versions all add to the complexity (and therefore the engineering expense) of every release. The QA team must test every new version against every deployed version, a combinatorial nightmare.
>
> On the other hand, SaaS, in the extreme, offers single version maintenance. Maintenance and QA costs per end user have the potential (agile development) of being dramatically reduced versus the packaged app model. When all is said and done, lower maintenance and QA cost is the reason why SaaS is overtaking packaged app deployment. Additional benefits related to the added productivity per headcount accrue as a result.
>
> Dave
>
>
>
>
>
>
>
>
> > No numbers, but I suspect the same motivation as the system software vendors in the and the PaaS space, it is so much easier to make money selling a piece of software and exiting, with the cash, than sticking around to provide a service, that ultimately may or may not be used, that while you can you would be foolish not to.
>
> > The big SaaS winners have been the pure play vendors like Salesforce
> > and WorkDay. The incumbent vendors like SAP make some half-hearted
> > efforts like SAP On-Demand, or Magento (eComerece vendor) with Magento
> > GO -- both these examples are low end products.
>
> > Gartner projected $12.1B in SaaS Revenue in 2011 growing at a CAGR of
> > 21%. I would like to know how much is that $12 billion is from pure
> > SaaS vendors like Salesforce, versus the portion of SaaS revenue from
> > legacy vendors like Oracle and SAP that are sticking their toe in the
> > water.
>
> > My belief is that some legacy vendors will make the transition to SaaS
> > (IBM did survive the loss of mainframe revenue) and some will become
> > roadkill.
>
> > Does anyone have any data of the revenue split between pure play SaaS
> > vendors versus the legacy vendors entering the market of the percent
> > of the total SaaS market (by revenue)? Any projections on how this
> > split will change over the next few years? Will the incumbent vendors
> > wake up and ultimately dominate the SaaS market or will they largely
> > die off and the new market will be dominated by new vendors?
>
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James
This is exactly how this is all playing out. Many looking at the
migration to the cloud from the outside envision software vendors re-
tooling their entire corporation and re-writing their products to a
LAMP stack. That's a very expensive and extremely risky proposition.
Deploying existing software on a PaaS to deliver it as-is with the
benefits of cloud computing (cost, availability, etc.) is the way to
go.
Interesting that you went with a private cloud approach. Was that
because of cost model? Customers perception of security? Specific
compute requirements not met by a public cloud vendor?
In my experience, there are a whole bunch of ISVs experimenting with
cloud delivery in the way that you outline, but mostly for demos,
evals, PoCs rather than monetized delivery....but that's changing
also.
- James
------
Software Sales Cloud Platform
http://in.linkedin.com/in/jamesacolgan
http://www.xuropa.com
> Hi Dan,
> To answer your question about getting started. It was the market driving
> the decision. The ISV I work for is sales driven traditional on premise
> model. The skill sets needed to execute on this transition were not in
> house and it is a learn as you go. I would look at it like a startup within
> an established ISV. Even getting to that perspective took some time for all
> deparents to understand what it means to turn a traditional ISV into a
> hosting company: huge change across all departments. On the flipside the
> decision makers listened to the market, and understand they need to
> participate in this disruptive technology or another company would step in
> and fill the SaaS void in an economy set on corporate cost cutting. In
> other words they have the vision!
> Special tools: nothing radical all off the shelf private cloud building
> block. VMware at the heart and windows guests running traditional on
> premise apps trying to do the best they can operating in the cloud.
> On a side note I always wondered how many ISV were doing just what my
> company is doing, as the move presents so many challenges, but this with
> vision and the ability to execute on that vision wil still be around in 5
> years.
>
>
> > As Geoff reports from personal experience, customers will drive the move
>
> to SaaS, not vendors. It makes sense that CIOs who take the plunge to SaaS
> for some key applications will naturally want to explore SaaS for
> everything, rather than continuing to support a dual model. Premise-based
> software will be around forever, but ISVs will pop up to exploit any
> application space where there is not currently an entrenched SaaS vendor
> for that application. So, ISVs who opt not to create a SaaS version do so
> at their own peril, and can expect new competition to fill that need.
>
> > Granted, the revenue model for SaaS (as well as the sales approach and a
>
> million other things) will be different and not as lucrative for many ISVs,
> but that's the nature of disruptive technology.
>
> > Geoff is your company using any specialized tools (say, Electric Cloud,
>
> etc.) as you adapt to the Cloud? Do you need new skillsets in dev and
> product management? How did you get started - seems like we have such a
> fluid environment that making decisions around
> design/architecture/positioning would be extremely difficult and something
> of a finger in the wind.
>
> > Here's some Gartner info on SaaS acceleration in the CRM space in
>
> particular, I'm sure similar analyses can be found for other apps:
>
> > Thanks to all for this good thread
> > -Dan
>
>
> > It is going to happen, and is happening. I currently work for an ISV
>
> that is doing just this. The transition is painful from all directions:
> revenue, operations, infrastructure, application re-architecture to work in
> the cloud, support. But due to the proliferation of mobile devices the
> market demands it. It's a matter of adapt or become extinct in the free
> market. In the end there will be niche markets for ISV to keep the
> traditional model alive, but as we are all witnessing the move to the cloud
> is real, and happening now. It will take another couple of years for this
> to all play out but I don't see it stopping.
>
> > Cheers,
> > Geoff
>
>
> > You may be right but the problem is the transition. Say an established
>
> vendor switches a straight sale into a four year service deal for twice the
> revenue. That shows in their current years books as more cost and half the
> revenue. Earnings per share takes a hit and Exec remuneration follows. It
> simply is not going to happen.
>
>
> > Thanks, Ian and Mark. Very much appreciate your (and others in this
> group) insight.
> > This seems to be something of an accounting game to my simple mind. And
>
> an inertia game as you both alluded to.> The accounting game is driven by stakeholders' perception of
>
> "profitability". Largely, profitability is measured by GROSS margins in the
> software business. But this us an artifact of how development expense is
> accounted for in the software industry. Investors key on this number. GM
> does not, of course, account for operational expenses - SG&A. Operational
> expenses for SaaS are arguably higher because of the capital infrastructure
> and service operation costs Ian described. But backend maintenance costs
> are much lower for SaaS.> But is there a more normalized method of comparing profits between the
>
> two models - like operating margins? I just have a sense that the SaaS
> model is financially more productive per vendor employee than packaged
> apps. This productivity will ultimately pass to the consumer as market
> uptake and competitive pressures rise. No numbers to back this up, though.> Thanks,
>
> > Dave
>
> > You need to look at it from the established Vendor's perspective to
>
> understand their marketing position. In the short term what drives them is
> not what's better for the customer but what makes them more money. True
> there is more cost and hence revenue in SaaS as opposed to a straight
> software sale but historically no-one has been able to sustain more than
> 40% GP on service provision, (the costs are too quantifiable and either
> your customers or your competitors can spot when you're making a killing),
> the margin on a straight software sale on the other hand is measured in the
> 100s%. Couple this with Mark's point about the timing of revenue
> recognition means no establish Vendor will push a SaaS product whilst they
> can still win straight software sales.
>
>
>
>
>
>
>
>
>
> > On 3 January 2012 18:48, Dave Corley <dcorle...@gmail.com> wrote:
>
> > Dan Mason | 425.443.2212
> > jdmasonconsulting.com
> > ascension_tg.com
>
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> http://www.amazon.com/gp/product/B004L1755W,http://www.amazon.com/gp/product/B002H0IW1U
Adrian Duncan
I'd like a bit of help from those intimate with the way hypervisors work.
With PaaS and IaaS, when a VM is created, is the drive effectively brand
new at the bit level?
Also, if the size of the VM is increased does the additional space come
blank / 0s?
Any references would be gleefully received :)
Thanks for reading
Adrian
Gilad Parann-Nissany
Regards
Gilad
__________________
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CEO, Founder
Porticor Cloud Security
http://www.porticor.com/
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Wobble Wobble
This talks about Lazy Zero on thin and thick VMware disks.
Sengor
It's not really up to the hypervisor to decide, but rather the cloud's
automated provisioning methodology a particular provider uses within
their deployment. Safe thing to say is you'll find it'll vary across
providers even if they are using the same backend hypervisor.
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Adrian Duncan
I haven't seen any reference to this on any provider's website,
so it is just the luck of the draw do you think?
Thanks for the replies,
Adrian
David Gibbons
That's interesting, and thanks for the link Joe Wobble.
I haven't seen any reference to this on any provider's website,
so it is just the luck of the draw do you think?
Thanks for the replies,
Adrian
David Gibbons
Flashpoint Informatics, Inc
www.goflashpoint.com
Ph: 814.206.0183
Adrian Duncan
thanks for the reply. I read the document that Joe McGlynn posted and
that says the same as you. I think in one way it is zeroed in advance and
the other it is zeroed when it is needed. Either way, you get a clean and
virtually new hard disk which is a great idea.
Why don't cloud providers add this to their marketing? Its a plus for me :)
Thanks Dave,
Adrian
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