SynApps The Open Source and Gadget blog

When the Romans finally lost the grip on the western world the big migration of the "Barbarian" tribes in Europe and western Asia began. The same seems to be going on in the software world with the disruption of "barbarian" Software-as-a-Service solutions replacing the existing ruling powers.

I believe the "sweet-spot" for SaaS solutions is the Small and Medium Business (SMB) market, because before SaaS they could not afford "business-class" eMail, Groupware, Colaboration, Voice, CRM etc. solutions, so there is a big void waiting to be filled with little migration issues.

But now it seems even the more enterprise-type users are ready for a great migration. For the benefits they are ready to let go of some of the more advanced requirements that only the big-old-systems can fulfill, as stated in a "googely" Forbes article, it "would cost Serena [a company], of Redwood City, Calif., $40,000 a year, compared with the $500,000 to $750,000 the build-your-own-corporate-software maker forks over now for Microsoft's Exchange product." That's a lot of motivation, especially in an economic downturn. We see this trend as well as more and more huge enterprise type customers are approaching us to replace their gigantic Exchange/Notes installations.

Obviously the "Romans" have noticed this trend, Microsoft has said it expects 50% of their today's Exchange users to use an Exchange Service (of Microsoft, of course) by 2012. Even IBM has announced recently (and late, as usual) that they'll be offering hosted Notes. Does this help the Romans compete with the Barbarians (e.g. Google, Salesforce, 1&1, Sugar CRM, Open-Xchange)?

Well, no.

SaaS is so successful because it's not ASP. With ASP, you took Client-Server applications and made them available remotely. With SaaS you build applications for the Web, that scale like crazy, use (Open-Source) Web technologies and provide them, you build applications that live in the Web.

While an Open-Xchange Server can run 20,000 users concurrently, Exchange is happy and fat at 1,000. While Sugar CRM runs on the Open Source ecosystem (Linux, Apache, MySQL, PHP), Microsoft Exchange needs it's own proprietary infrastructure (Windows Server 2008, Sharepoint Server 2008, Anything Microsoft ever has built 2008). This doesn't scale, it cannot compete pricewise, and it is alien in the Internet ecosystem.

To be able to compete it is not enough to play "cargo cult" and mimic SaaS. To be able to compete in the Barbarian world, you have to go the whole 9 yards of SaaS.