If you sell your ASP as SaaS you do something basically wrong!

Despite the continuing spread of the cloud and the software-as-a-service (SaaS) model, you always meet again and again people, who are anchored in the firm belief to offer cloud computing since 20 years. Because ASP (Application Service Providing) was finally nothing else. The situation is similar with traditional outsourcers, whose pre-sales team will gladly agreed for an appointment after a call to model the customers ‘tailored’ cloud computing server infrastructure locally, which may be paid by the customer in advance. In this post it’s only about why ASP has nothing to do with SaaS and cloud.

ASP: 50 customers and 50 applications

Let’s be honest. A company that wants to distribute an application will come sooner or later to the idea that it somehow wants to maximize its profits. In this context, economies of scale have an important role to place an efficient solution on the market that is designed that it remains profitable in spite of its own growth. Unfortunately, an ASP model can not prove exactly that. Because ASP has one problem. It does not scale dynamically. But is only as fast as the administrator must ensure that another server is purchased, installed in the server room, equipped with the operating system and other basic software plus the actual client software.

Furthermore, in the typical ASP model, for each customer an instance of the respective software is needed. In the worst case (depending on performance) at least even a separate (physical) server for each customer is required. This means in numbers, that for 50 customers who want to use exactly the same application but separated from each other, 50 installations of the application and 50 servers are required. Topics such as databases should not be forgotten, where in many cases, up to three times as many databases must be used as applications are provided to customers.

Just consider yourself the effort (cost) that an ASP provider operates to integrate and manage the hosted systems, to service new customers and beyond that to provide them with patches and upgrades. This is unprofitable!

SaaS: 50 customers and 1 application

Compared to ASP SaaS sets on a much more efficient and more profitable model. Instead of running one application for each customer, only one instance of an application for all customers is used. This means that for 50 customers only one instance of the application is required, that all together are using but isolated from each other. Thus, the expenses for the operation and management of the application is reduced in particular. Where an administrator at the ASP model had to update each of the 50 software installation, it is sufficient for SaaS, if a single instance is updated. If new customers want to take advantage to access the application, it is automatically set up, without an administrator needs to install a new server and set up the application for them. This saves both time and capital. This means that the application grows profitable with the requirements of new customers.

Multi-tenancy is the key to success

The concept behind SaaS, which accounts for a significant difference between ASP and SaaS, is called multi-tenancy. Here are several mandates, ie customers, hosted on the same server or software system, without beeing able to look in the data, settings, etc. of each other. This means that only a customer can see and edit its data. A single mandate within the system forms a related to the data and organizationally closed unity.

As noted above, the benefits of a multitenancy system is to centrally install the application, to maintain and optimize memory requirements for data storage. This is due to the fact that data and objects are held across clients and just need to be stored for an installed system and not per mandate. In this context, it must be stressed again that a software system is not multitenant by giving each client its own instance of software. Within the multi-tenancy method all clients using one instance of an application that is centrally managed.

If you still have the question why not to sell ASP as SaaS, read “Software-as-a-Service: Why your application belongs to the cloud as well“.


SAP Cloud: Lars Dalgaard will leave a huge hole

Now he is gone, Lars Dalgaard. He was my personal hope for SAP and in my opinion the driving force behind the cloud strategy of the company from Walldorf, which has received more and more momentum in the last month. But not only for the Cloud Dalgaard has revamped SAP, even cultural it would have been good for the company to have him longer in their own ranks. Or was it maybe exactly this problem why he had to go after such a short time.

Credible positive energy

The cloud thoughts SAP has incorporated externally by the akquisiton of SuccessFactors and with its founder and CEO Lars Dalgaard. After taking over the Dane was the person in authority for the SAP Cloud area and the driving force behind the SAP cloud services. And he has done this job very well. In his keynote, during the Sapphire Now 2012, in which he introduced the new SAP cloud strategy, Dalgaard presented himself as explosive entrepreneur who did not discarded his startups genes by far. On the contrary, with his motivation, he brought a fresh breeze in the established group based in Walldorf, Germany.

On my retrospective on the Sapphire Now, 2012 i had written (only in German): “It is to be hoped for Dalgaard and especially for SAP, that he can realize his cloud vision and that he may hope for open doors with his startup character. Because SAP is far away from what can be logically described as a startup.

Different corporate cultures

Has precisely this circumstance for Dalgaard or better SAP become the fate? Lars Dalgaard resigned from his executive position on the first of June 2013, has left SAP and entered as a general partner at Andreessen Horowitz. He will continue to be available for SAPs cloud business as an advisor for the cloud governance board .

I only can speculate at this point. Although I do not personally know Dalgaard. But his positive energy that he exudes during his lectures, evidence of someone who knows what he wants and have a clear focus. Admittedly, I’m not a SAP expert with regard to the corporate culture. However, many good people already questionably broken at SAP. Just take Shai Agassi as one example.

Quo vadis, SAP?

To moor an entire company on a single and also purchased externally person is exaggerated. However, I take the view that the loss of Lars Dalgaard could have a significant impact on the cloud business of SAP. One remember the very rocky start of SAP in the cloud area with its product line “SAP Business By Design”, which had not deserves the term cloud solution in its first version and which was a real letdown. With Business By Design 4.0 SAP has – under the direction of Lars Dalgaard – once again started from scratch and the train began to move.

It is desirable for SAP that they do not lose this “Dalgaard mentality” in order to remain competitive in the cloud market. Because one should not forget that a cloud business must be conducted differently as a traditional software company. Just compare Amazon and Google. The same also Microsoft needed to understand and learned to reinvent themselves. SAP was – with Lars Dalgaard – at least on the right track, so far.


Enterprise Cloud Portal: T-Systems consolidates its cloud portfolio

With its Enterprise Cloud Portal German Telekom subsidiary T-Systems presents its first cloud service-wide offering for corporate customers. On the portal, companies can inform about the cloud solutions from T-Systems, test them and order directly. The currently offered services include solutions for mobile device management, Dynamic Services for Infrastructure and the Enterprise Marketplace. A look at the site shows that great emphasis was placed on the compatibility with tablets.

Past the IT department

With its cloud portal T-Systems want to enable also non-technical users in large companies to access specific cloud solutions. The cloud provider refers to a study by Gartner, which says that up to 2015, about 35 percent of IT spending are selected and managed outside the IT department. Be mentioned here, for example, marketing, purchasing and accounting.

Mobile Device Management

The mobile device management from the cloud should help businesses in the administration of mobile devices with different operating systems, such as iOS and Android via a standardized web platform. In addition to security settings, control access rights to functions and applications can be made. In case of loss of the device, the data can be deleted remotely. A test of the mobile device management is free for the first four weeks for up to three mobile devices.

Dynamic Services for Infrastructure

For infrastructure-as-a-service (IaaS) two offerings are ready: On the one hand, the “Dynamic Services for Infrastructure” (DSI) from a hosted private cloud. Secondly, the “DSI with vCloud Datacenter Services” as a hybrid variant. The management of the resources does the client itself via a web-based portal or using its own VMware management software. Clear pricing models to make the cost of the infrastructure transparent. Thus, for example, a server from the hosted private cloud costs from 9 cents per hour in the package “Small”. For the hybrid solution the package price for a virtual data center in the smallest version is exactly at 999,84€ per month.

Enterprise Marketplace

The Enterprise Market Place includes, among other things, further IaaS solutions including operating systems for Linux and Windows Server, platform-as-a-service (PaaS) solutions, including Tomcat and Microsoft SQL Server as well as a growing number of software-as-a-service (SaaS) offerings like Doculife, CA Nimsoft TAXOR, TIS, WeSustain, Metasonic, ARAS, Tibco Tibbr, Sugar CRM, Microsoft Enterprise Search and Microsoft Lync. In addition, companies should therefore be given the opportunity to apply a variety of applications highly safe in need-based formats, but also can migrate to host their own applications. The full availability of the Enterprise Market Place is planned for this summer. Currently, there is already a preview on the cloud portal.


With the Enterprise Cloud Portal T-Systems summarizes his entire cloud portfolio together under one umbrella. I had analyzed “The cloud portfolio of T-Systems” in an article for the German Computerwoche in 2011. At that time the offering was made of single and independent services. However, already at that time I came to the conclusion that T-Systems has a very well sophisticated and well-rounded cloud portfolio. This can be seen now in the consolidated Enterprise Cloud Portal. From SaaS over PaaS to IaaS and other solutions for mobile devices can be found. With it T-Systems is one of the few providers that have a full cloud stack and which is now even bundled into a single portal.

Especially in the Enterprise Marketplace is a lot potential. At this year’s CeBIT, I could take a first look at it which was in my opinion at this time still in an alpha state. Some basic and necessary essential functions for an IaaS offering, automatic scalability and high-availability may be mentioned only, were still missing. But that was in March and I’m assuming that T-Systems has already made ​​more progress here. In addition, I have already heard from a reputable source, that T-Systems/ Telekom will gradually change their cloud infrastructure to OpenStack, which will also give the Enterprise Market Place another boost in compatibility.

Where T-Systems sees an advantage for non-technical users in enterprises, should cause worry lines for IT managers. Indeed, I am also of the opinion that the IT department will become and even need to be a service broker. However, I think it is quite questionable if each department can simply run off and buy IT services externally as desired. Certainly, the blame lies with the IT departments themselves because they have built up a bad reputation over the years and are considered as slow and not innovative. I have philosophized about it here two years ago in detail (cloud computing and the shadow IT).

A certain supervisory authority in the form of a service broker is still necessary, because otherwise it is an uncontrolled proliferation of external services about which one will lose track. This can be controlled, of course, if one obtains the services from a single provider. And that is exactly the goal of T-Systems and its extensive Enterprise Cloud Portal. A customer should explicitly and across departments, refer the services from the T-Systems Cloud in order to avoid sprawl and to keep track. The question is whether this can be set internally by the customers that way. Because there are plenty of other services in the sea.

In the end I would like to address a topic that is currently causing a stir in the end customer market, but offers corporate customers a great advantage. The end-to-end offering of services. T-Systems is due to its situation, to be a subsidiary of Deutsche Telekom, one of the few cloud providers who can offer a service level from the services at application level or even virtual machine level in the data center, including the data line. This enables customers to maintain a continuous Quality-of-Service (QoS) and a comprehensive Service Level Agreement (SLA), which many other cloud providers can not afford.


Is the channel in the cloud computing age still relevant?

During the Cloud EcoSystem Winter Meeting a panel discussed which relevants the channel still has in the cloud. Since the majority of the participants were part of the channel less critics were made. And even things about changes were not discussed, because some already delivered software over ASP and so they are since 1998 in the cloud.

ASP is not cloud computing

I will not discuss ASP (Application Service Providing) vs. SaaS (cloud). That ASP has nothing todo with SaaS (software-as-a-service) respectively cloud computing is not just propagade by me but also by other publications. (Btw, I was very thankful, that Stefan Ried cleaned up all the “cloud myths” during his talk and showed all attendees the true characteristics and benefits of the cloud, thanks Stefan!)

The channel have to change

Let’s come to the channel. It will be worse to say that it dies. On the one hand “something” is to sale everytime and the lobby behind that will do their best to keep this business model alive. But it will be worse to close the eyes and making things going on as they have been made for years. Sure, “You’ll always need hardware!” but even this amount? And are countless suppliers able to live just from selling hardware?

In my opinion, software reselling, a big part of the whole market, is dead. Just think about which type of software is shipped by media, I spontaneously just have operating systems in mind. Although it’s possible to download it from the website of the vendor as well. Just like other software which is not available as SaaS today. For example, Microsoft ships the new Office 365 Home Premium in a box with just a small card with a code on it. The software is downloaded or streamed afterwards from a Microsoft website.

From reseller to integrator

In my opinion the typical channel for software reseller is too late to save. Companies in this area should as soon as possible think about other options. One possibility is a partnership program with software vendors, to help customers migrate and integrate with consultation-intensive solutions (actually SaaS applications are intuitv to configure and use). That means, a software reseller needs to have more expertise than just sell software and become a systems integrator.

A further idea is to build an own marketplace for SaaS applications. Here the differentiation with existing offerings is necessary and besides offering solutions from different categories even integrate them (by standard) in order to have a central data management and no isolated solutions. Here you can see, that the reseller also becomes an integrator. Leaving just reselling software.

Sure, there are software reseller who even integrate. The classical systems houses. But even these needs to change, thanks to the cloud.