Sushrut Bidwai

Cloud is on the rise. No doubt about it. With cloud comes SaaS. I have already said that, these are two most important things to watch out for in 2009. But question is - have we really understood SaaS? From business point of view, I mean.

Let us study couple of Something aaS models we can find in current world.

Telecom - I think telecom companies have correctly understood this model. You pay for your usage. There is some basic monthly rental to cover wiring, instruments, infrastructure cost. But main thing is if you make a call, you know how much you will have to pay for it.

Roads - In India, when you buy a vehicle, based on your vehicle type you pay some road-tax. Irrespective Of whether you ever drive the vehicle or not you have to pay that tax. Almost all roads are free to drive on once you have paid this tax. In special cases, say some high speed highway/freeway you want to use, you have to pay for it before using. If you are going to use it every day, then you get subscription models.

Now the last statement, bold, above is very interesting. Models they offer you is - 1 time use, return usage, weekly/monthly subscriptions.

The way we are implementing SaaS for computer applications, provide me with only monthly subscriptions. Take example of Zoho pricing, all it provides me is various slots based on number of users for each of the application on a monthly basis. Same is the story with LinkedIn and many other SaaS business model implementers.

This is not what SaaS is. Period.

I will call this as rental model for software applications. You are paying rent. You pay it, whether you actually use the application or not.

How to implement SaaS for these applications?

Identify the bold point features your application provides. If you take example of Zoho projects, it is free for one project. USD 12 per month for upto 10 projects. Now I dont know how many projects I am going to have. Say I start with 1. Now when I acquire another project, I need to shell out 12 USD per month for that one project.  If I acquire another 8 projects, then they are free. For 11th project cost again is USD 8 per month. So the point is, there is no defined cost for one project.

Now such models create a BIG entry barrier for a small company like mine. This is the reason I do not use Zoho despite liking their products. If they would have given me something like 3 USD per project. It would have reduced entry barrier for me a LOT.

Let us see second example of LinkedIn. Now linkedin for professional users, charges some fixed fee. I am small time entrepreneur who needs these special features once in 2-3 months. Where I really need to connect with some one who is not in my network and I need that In Mail feature for that. But I will not take professional account, as I don’t need this feature all the time. So why not just ask me for 2 USD (say) for every feature request. 

You can have rental schemes too, along with such fine grained pricing structure. If over a period of time I notice that subscribing to rental schems is going to reduce my cost then I will.

I think such feature based model is the REAL SaaS business model. So if you do not have it, dont call it SaaS.

Ideas, Misc cloud, Linkedin, Pricing Model, saas, Zoho

I thought it will be a good follow up from my last post. In the last post I talk about things I know are happening in 2009 and hence looking out for. Now, what I want from 2009, not really from technology but in general.

1. Die socio-networks die - Well I am heavy user of Orkut, Twitter and Linkedin. Limited user of Facebook. Everything apart from that in Social networking should just go away. I don’t need your spammy invitations. I don’t need, so called, ‘niche’ social networks to talk about music, movies, cricket, Amrita Rao or any other thing. Linkedin/Facebook/Orkut groups and communities is enough for me to do that. But I know building a niche social network seems the easiest way to become an entrepreneur these days. We have so far seen social networks for BPO professionals, IT professionals, Cricket lovers, movie goers and what not. Day isn’t far where people will build social networks for Reynolds 045 Pen lovers. Give me a break!
2. High speed, low cost, high availability Internet - I strongly believe that government should subsidize Internet and not just for home use but for business too. BSNL is probably the most profitable government undertaking and Babus should do something so that it can provide connections to everyone at much lower costs. In US it costs about 10 USD/month for 4Mbps connection with Static-IP. If I have to get that kind of connection in Nasik its almost more than 200 USD/month!! Please some one do something about this. Internet is equalizer which will enable us to take on developed countries and its about time we get that for cheap.
3. Restructuring of Company Laws - Well I know its asking for a little too much and I dont think it will be done even till 2019, but I am optimistic person to the core. So Mr. Finance minister and Mr. commerce minister, please have some common sense and make it easier for us to setup companies and operate them. Please provide us some ease with laws so that we can concentrate on creating value for our clients and hence wealth for our country rather than having sleepless nights over 100s of forms and accreditions and blah blah to fulfill. Please, its not funny any more.
4. Better ways to organize online presense - So I have a blog, actually three blogs. Few more blogs focused on certain things are coming up too. Apart from that I have micro-blog ie twitter account. Orkut, Facebook, LinkedIn accounts. Lot of linkedin groups. Subscription to lot of blogs/feeds. Thinking of opening FriendFeed account. 3 Email accounts. Picasa, flickr accounts. I need a better way to manage all this. I need a dashboard, single sign-on across multiple vendor websites. Or else Google, acquire all these services and integrate them in your services stack.
5. Lesser online time and a little more offline time - Spending 16+ hours a day on Internet has really given me very less time to read, reason, think. Though I make it a point to read at least 30mins to 1 hour even today, almost everyday, gone are the days where I used to read almost one entire 300 page book everyday . Though I am not complaining or not even deeply sad about this. But seriously I want at least 3 hours of time where I can be alone and it has become increasingly difficult to be alone while logged on to Internet. Though I know its more of my fault and hence I will be working on this in 2009.

And yes please no new Matrimony site. I have now disabled all of them on my broadband by setting up rules and told my Mom that all these sites are shut down due to no business. So please dont launch another one, else I will have to again take the pain on updating my routers rule-set. So please have some mercy. Oh yes and I will not say to new laptop too (Sony VAIO, latest model).

Misc, philosophy 2009, facebook, Linkedin, Orkut, social networking, web 2.0