This is one of the most exciting aspects of the migration of companies to entirely SaaS-based infrastructures. For years massive conglomerates have been able to choke-out smaller mom-and-pop companies that often specialize in a specific aspect of production (and tend to do it better as a result). The conglomerate can still handle the entire production process, but the end-result isn't as good as it would be with the incorporation of the smaller stores' productions methods.

 Now it's looking like SaaS will be encouraging the creation of several smaller companies which will hyper-specialize.  Is this a step forward for business? Or will the increasing number of companies create more chaos than coordination?

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From Greg Olsen, CTO at Coghead:

"The move to SaaS applications built on SaaS is a much more profound shift than the move from on-premise applications to SaaS applications. The software industry is beginning to display characteristics that mimic the supply chains and service layering that are commonplace in other industries like transportation, financial services, insurance, food processing, etc. A simple set of categories like applications, middleware and infrastructure no longer represents the reality of software products or vendors. Instead of a small number of very large, vertically integrated vendors, we are seeing an explosion of smaller, more focused software services and vendors. The reasons for this transition are simple: It takes less capital and other resources to create, integrate, assemble and distribute useful software capabilities."

I believe that Greg is right on the money with the idea that the very process of building a "software company" is being altered by the service-based architectures being provided by "saas infrastructure enablers." It is removing the friction of capital from the software-innovation value chain, and thereby, releasing more "innovation value" over shorter timeframes.

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 Usually SaaS enthusiasts are so busy wondering about front- and back-end developments we don't think about the all-important unifying middleware portion. What big changes do you see coming for Cloud Middleware in the coming years? Is there a possibility of international standardization?

 From SaaSBlogs.com

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Jeff Kaplan posted an article on Internet Evolution this morning entitled “Bridging the Great Divide in Cloud Computing“. It’s a nice little piece that focuses on a burning problem: the Cloud has been very infrastructure focused, to the point that if you attend industry events you’ll find that, as Kaplan identified, “Those events that promise the latest information and insight about the nuts and bolts of the leading IaaS offerings will likely be overrun by network engineers or storage and security specialists. ”

My experiences have been the same: for the most part, cloud has provided tremendous value in creating a highly flexible datacenter abstraction, democratizing access to high end infrastructure offerings, and trivializing a number of deployment and management issues (think PaaS). Most of this is something that network engineers love (I don’t believe it’s a pari passu displacement of IT staff – Cloud has created a set of more interesting, higher value challenges that modern IT operators need to tackle) Additionally, the Cloud has provide some basic value to software engineers through some highly available and scalable nuts and bolts services (like blob storage solutions, etc.), but the problem domain of building Cloud/SaaS offerings has not been directly addressed by most Cloud providers since the focus has been entrenched at this network and virtualization tier. Cloud at the infrastructure tier is absolutely necessary, but the development community needs more Cloud value that solves modern software architecture problems. The Cloud, with its vast elasticity and democratization of software access to end users, has created challenging software delivery problems like cost efficiency delivery, scalability, and the need for codification of critical operating workflows. These are things that Cloud tech to date has predominantly shied away from.

Historically, middleware/infrastructure software has provided a common layer that acts as a single point of interest shared by IT network level operators and software developers. Think IIS, WebSphere, database servers, etc. These infrastructure software products typically provide a wealth of tooling to network folks in support of applications written by developers that use the pattern and practice productization value captured by these “application servers” to ease use case specific software engineering burdens. When the developers finish building something, the network ops teams can communicate in a familiar way with the same product, but through a different lens.

Looking at the state of the Cloud, it seems pretty obvious to me that we are at an inflection point. The “great divide in cloud computing” is something that can, should, and will be filled by modern middleware purpose-built for the Cloud. This middleware is what can act as the intermediary between the new architecture pressures that software developers must face and the Cloud management requirements of the IT staff. Without middleware handling this, we fundamentally have a better way to host software, which is hardly a catalyst for continued innovation.

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My last blog talked about the ever-shifting balance of focus between data warehousing and mobile  apps in the cloud.  My and many others' guess is that companies are going to go full-steam in developing sexy, usable mobile apps that will attract customers to their goods & services first and then worry about changes in data processing and optimization as their traffic changes.

It makes sense as to why in 2011 the app will be the focus: those who get the best apps out first will have the best brand-awareness. But what data issues do you think will arise as companies who've focused a disproportionate amount of resources on their front-end app development struggle to catch up with rapidly-increasing business?

From ZDNet

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