Channel Marker

Apr 28 2008   2:52PM GMT

ISVs: One stack or two?



Posted by: badarrow
Tags:
Application development
Barbara Darrow
Google
Microsoft
Software as a service (SaaS)

If you’re an ISV in the era of Saas vs. on-premise delivery models, the stack question has never been bigger.

If you’re going the on-premises route for your applications you must weigh the whole Java/Eclipse vs. .Net/Windows issue. If you’re going to SaaS, there are SaaS-based alternatives including Salesforce.com’s heavily touted environment to be considered.

Narinder Singh, founder of Appirio, says it’s cheaper and less risky to use someone else’s already-built-and-tested services stack to build and field your own software services. He’s cast his lot with Salesforce.com and Google toward that end. Singh was a featured speaker on Salesforce.com’s recent ‘Tour de force’ road show, so his preference is understandable.

At the Boston event last week,  Singh said Appirio saved $300,000 to $500,000 last year in IT costs alone by using Salesforce.com  (and Google infrastructure) as a foundation. It’s not coincidental that Appirio’s services–a CRM dashboard, calendar synchronization, online storage, are for Salesforce.com and Google universes.

The company, now up to 60 employees from ten or 15 a few years ago, uses exactly zero servers for development. It has no servers at all. Singh estimates that the company’s entire IT spend (not including laptops) is in the “hundreds of dollars per year per user.” That includes $50 per user per year for Google apps, $40 per user per year for the Salesforce.com platform license. Oh, and “we give everyone Microsoft Office” because they have to work with outsiders. So that’s probalby the biggest chunk of change outside the laptop. Appirio uses its own internal builds for recruiting, HR at very low cost compared to what he said could be $6,000 to $12,000 per user if SAP were used. (Singh used to be with SAP).

So Appirio gets all that foundational stuff and Salesforce.com doesn’t even get a cut of the action on Appirio’s sales. Hmm. Guess the upside for Salesforce.com is platform credibility and more application choices in its stable.

But Singh also says partners on Salesforce.com side of the fence can win deals by saving corporate customers significant money. He cited one unnamed Midwestern company that evaluated a Microsoft Dynamics on premises financial solution and a Salesforce.com competitor for about 1,000 users. The Microsoft software and services would have been over $4 million. The winning Salesforce.com/Appirio deal came in at between $1.2 and $1.5 million — roughly a third the cost.

The burning question then becomes whether that’s enough money for a services partner. “It’s enough for us to make money. It’s not clear whether it’s enough for Accenture,” Singh said. Accenture is a large services partner often aligned with Microsoft.

Another featured Salesforce.com partner paints a more nuanced picture because the ISV, Coda Financials, is both a Microsoft Gold ISV partner and a fairly new Salesforce.com partner. It’s upcoming on-demand financial services software, coda2go, build on Salesforce.com, will launch in June.

The speed of development was fairly dizzying using Salesforce.com, said Coda CTO Jeremy Roche. “From the minute we committed [to building the app services]  to cutting the actual application took three weeks. Now Coda’s been writing finance systems for 30 years so we know what we’re trying to do in terms of business requirements, but that’s still pretty fast.”

There was some retraining for developers in Apex vs. Java although even that learning curve was short because Salesforce.com’s Apex supports the Eclipse IDE which most of its developers already know.

Coda will continue to work with Microsoft for its on-premises implementations. But as a point of comparison, the company runs something like 356 servers for development of its Microsoft-based on-premise financial software compared to no servers for Salesforce.com.

Of course, with its mesh strategy, Microsoft will no doubt come up with a development platform for SaaS rather than the ad hoc toolsets it now offers, but no one expects deliverables any time soon.

Coda2go users will need a Salesforce.com license or Coda will OEM with Salesforce.com but again, Salesforce.com doesn’t get a piece of each sale.

Roche says the mixed stack mirrors his customer base. Some businesses are “actively moving to on demand. Some aren’t.” For companies wanting to deploy a a mix of both models, Coda will supply a connector to link on-premise and on-demand iterations.

Barbara Darrow can be reached at bdarrow@techtarget.com.

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