Software-as-a-DisaggregationTM (SaaD)TM is defined as “the inability to deliver SaaS to enterprise customers under a single, direct contract containing terms that are within the control of the parties.” The tension between the disaggregated tendency of SaaS and enterprise IT governance and procurement will only increase over the next several years as SaaS companies increase their marketing to enterprise customers.

SaaD TM and Key SaaS Companies

This Report describes existing SaaS companies’ business models and how their contracts fulfill and promote enterprise level corporation goals for IT governance and procurement.

A carefully selected cross section of 7 prominent SaaS platform companies in the marketplace today are analyzed using James River’s SaaDTM methodology.

Salesforce.com and Web Ex – The Leaders

The first two companies, Salesforce.com and WebEx, are generally considered the premier SaaS platforms and on demand services providers. These companies’ business models are highly matured and complex, and provide excellent profiles of what an enterprise-capable SaaS provider should look like. Both Salesforce and WebEx support an ecosystem of SaaS applications that can be mashed up, and sophisticated enterprise end user administration, and both companies self host and manage their platforms. ISV participation in these services is subject to approval, making them akin to a members’ only club. Under the scrutiny of the SaaDTM analysis, though, even Salesforce and WebEx contain significant elements of disaggregation.

Strikeiron, Jamcracker and Mashery – The SaaS “enablement” platforms

The next three companies, Strikeiron, Jamcracker and Mashery, are the first and best known of the SaaS “enablement” platforms. They’re prime directive is to get SaaS ISVs to market, and in the rush to ride the SaaS wave they have become extremely popular. They also illustrate SaaS disaggregation in its worst form, and the numerous pitfalls in these platforms for enterprise customers and for ISVs are cataloged in the SaaDTM analysis. Their continued success could portend the eventual demise of the marketing term “SaaS” in the same way the term “ASP” has become a dirty word.

USI and OpSource - SaaS’s future past

The last two companies, USI and OpSource, represent SaaS’s future past. They are mainly hosting companies, the first starting as an ASP company in the Dot Com Boom and barely surviving the Dot Com Bust, and the second arising from the ashes of the Dot Com Bust through fire sale acquisitions that were remade into an SaaS specific platform. Both companies transcend the traditional hosting model in different ways: OpSource provides a service oriented infrastructure, and USi provides mashup and integration consulting services. These companies represent a tested and sound model that will appeal to enterprise customers, but that deviates from the idea of SaaS as multi tenancy utility computing.

Understanding and Addressing the SaaDTM Issues

This Report includes the following:

• An introduction that discusses what enterprise customers look for in their IT product and services vendors, defines Software-as-a-DisaggregationTM (SaaD)TM, and gives several examples that better describe the SaaDTM concept.
• A full SaaD analysis is conducted for each of the companies. A detailed discussion of each company’s technical platform, business model and on demand and associated services is given, followed by an analysis of its disagggregation. SaaDTM diagrams depict disaggregation both within the business model and within their contract arrangements. Each company is assigned a SaaD Power RatingTM that summarizes its ability to meet enterprise governance and procurement concerns.
• Disaggregation issues particular to each company are exhaustively explored. Actual contracts are reviewed and their impact on end users is discussed. Other legal and business issues impacting disaggregation are discussed.
• SaaDTM diagram legends are given in an appendix and the diagrams are fully explained. The criteria for the SaaD Power RatingTM is explained.
• Contracting solutions to resolve disaggregation within SaaS companies are presented along with illustrations of each solution. The solutions are based on James River’s methodologies for contract development and management.