I have always wondered why we use the term software as a service, because one of the characteristics of software is that it is automated, and repeatable – that’s how traditional software vendors make their margins. They do not want to make software a service- as they do not want to sell services – and software business models do not thrive on service revenues. So I have always thought that it actually is the service providers looking to automate their services around software, to offer monthly recurring services around a software product and leverage on repeatable service revenues. Up to now though this idea seemed out of touch with reality. Until last week, when we saw SnapLogic present at InnovateIT 2011.
Where the conventional IT service providers still make enough money transitioning on-premise to private cloud to hybrid and then (maybe) public clouds, SnapLogic focuses on automating the integration process. By building application connectors, the company aims to make it easier for clients to connect any combination of applications and data sources. So what is the logic behind SnapLogic?
1. They automate the integration process. SnapLogic recognizes that the trick is in the integration process. Though security and privacy are mentioned as main inhibitors to adoption of cloud, lengthy integration scenarios are also preventing CEO’s and CIO’s to move to the cloud. So SnapLogic offers integration as a service. They do that by offering Snaps:
“Snaps are modular collections of integration components built for a specific application or data source”.
SnapLogic adopts what it calls ‘containerization’ in the form of Snaps and integration pipelines – basically creating an application or data connector in front of a SaaS or cloud based app (creating a Snap). The snaps can be viewed as container blocks that can easily be moved around, placed next or on top of each other. An even better comparison is the one to LEGO bricks, with which it is easy to build any kind of creation, which always fits. The SnapDesigner enables one to design a custom app environment, dragging and dropping snaps where necessary. This way, integration as a service gets to be the longtail of integration and of SaaS (see also Paas is the longtail of SaaS).
2. SnapLogic offers the complete package, from integration to distribution. SnapLogic offers an Integration Platform, SnapServer, SnapDesigner, SnapCenter and a SnapStore, the latter being crucial in our opinion. The SnapStore is the distribution mechanism for Snaps, similar to Apple’s appstore. Currently there are almost 100 snaps available, in various categories and price ranges. The company is aiming to get to 1000 snaps soon. SnapLogic has a twofold strategy to motivate vendors to develop snaps. First of all through an active developer community, creating an attractive developer platform, working on the RESTful architecture, 100% web based. Secondly, creating an attractive economical incentive. Developers and ISVs receive 70% of Snap sales revenues, and a monthly developer revenue fee. With a substantial part of the revenue going to the ISV/developer, the SnapStore can be considered an enabler to subscription based apps.
Are there other vendors out there they compete with? Yes and no, sort of, kind of. They probably compete with system integrators and VARs offering cloud integration services, as well as with distributors (through the SnapStore) and providers of hosted solutions. However, many of the system integrators offer cloud integration, but do so in one-off projects. They may have developed an integration solution roadmap, or have certified integration solutions, to ensure a repeatable process when integrating cloud solutions. This does not automate the actual integration process though. At the same time we see distributors or providers of hosted solutions offering various apps on a subscription basis. However, they are unable to connect the various applications and make them ‘talk’ to each other without integration services.
Will it take off? It is still early days but the signs are good. The company recently started its European operations with a European HQ in London, and an office in Germany. The CEO of the company (Gaurav Dhillon) has a proven track record as co-founder and former CEO of Informatica Corp. Also, the company has received venture funding from Andreessen Horowitz. But more importantly, SnapLogic is already backed by some of the leading application vendors, offering Snaps for their products, including: ADP, Salesforce.com, Oracle, Siebel, Facebook, Google, MySQL and NetSuite.
Key for the company is to find partners to bring the product to market. And key is to expand its developer community in order to expand on the number of available Snaps. But the idea – service as software – resonates well. What are your thoughts? Do you agree with the logic behind SnapLogic? Please share!