One of the conflicts that the Software as a Service provider has to deal with is balancing the 1 to many, multi-tenancy model, where support of one set of code across a large community provides the economies of scale that make the approach so cost effective for both provider and customer, against the fact that an individual company will want custom processes to gain competitive advantage. SAP regularly use that argument to promote their alternative. One of the ways the SaaS providers have tackled the problem is by making sure that their solutions are function rich and highly configurable, but Salesforce.com have recently added the Salesforce Apex development language alongside AppExchange to extend their SaaS based development platform. AppExchange is both a platform and a marketplace for add-on applications, providing an ecosystem for Salesforce partners to extend the reach of the basic Salesforce CRM and sales force automation in to other application areas. Up to now, the AppExchange portfolio hasn’t strayed too far from sales or accounting related application areas, but Apex opens up the possibility of using the platform for any business process across the enterprise.
Last week, NetSuite, another major SaaS player announced their entry in to the application platform business. Although NetSuite’s marketing messages tend to mix their positioning between CRM and general business areas, their product started in accounting, as NetLedger, and then moved in to ERP. They’ve responded to Apex by announcing SuiteFlex, which they claim is:
“a new application development platform that enables the creation of third-party vertical applications within NetSuite, as well as end-to-end business process customization for any end-user company. SuiteFlex includes several industry “first and only” breakthroughs including additions to SuiteScript — the world’s first on-demand programming language. As a part of SuiteScript, NetSuite introduced Suitelets and SuiteScript UI Objects. Together, Suitelets and SuiteScript UI Objects enable customers and third-party developers to build new workflows and applications that look and operate as if NetSuite’s own developers wrote them.”
Their positioning this as a platform for “end to end” business process customization, offering the ability to completely tailor NetSuite to your precise requirements. Part of their plan is for partners to build verticalized versions of their product, as well as to concentrate on the “integrated” message. Their marketing language is already taking swipes at other SaaS players who integrate web services to provide a solution, describing these as:
“cobbled together to form ‘composite applications,’ this mish-mash of software falls far short”
As part of the announcement they are offering SuiteSource - an open source repository where NetSuite and other developers can provide SuiteFlex source code of modules and applications back to the community. That’s a logical and sensible extension.
Dan Farber provides his analysis, with a view from Robert Bois of AMR Research, Phil Wainewright chips in his comments and Jeff Kaplan thinks this is a good start , although he goes on to say:
“the NetSuite universe of partners is still just a fraction of the size of Salesforce.com’s AppExchange.”
Potentially, both Apex and SuiteFlex provide the ability to customize the application without compromising the upgrade path of the standard application. Potentially, both of these competing approaches could be revolutionary in addressing the balance between the multi-tenanted architecture and customer specific requirements. It is too early to say if they will both succeed, or how quickly either will build an ecosystem of applications, partners and systems integrators to extend the reach of both solutions. However, if Gartner’s projection that SaaS will be 25% of the market by 2011, there is plenty of opportunity for both (and others) to thrive.
Technorati Tags : irregulars, enterprise+irregulars, SaaS, Salesforce.com, NetSuite, Apex, AppExchange, SuiteFlex, SAP, platform
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