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The Future of SaaS, and What Puts ThinkFree Ahead of Google

Thu, 08 Mar 2007 18:30:00 -0400

ThinkFree is way cool! I signed up for an account earlier this week, and its web-based spreadsheet, word processor and slide presentation apps work beautifully. TJ Kang, the company's founder, has been developing office productivity software since the 1980s, and it shows.

Founded in 1999. ThinkFree spent its early years as a desktop software company. Its online edition was released in April 2005. Now the LA Library offers it on 2,200 computers across 71 branches, and NHN, a Korean telco with 20 million subscribers, has integrated the product with its email system. In addition, over 250,000 individual users have signed up for accounts.

Unlike Zoho, which offers an amazing breadth of hosted services, ThinkFree focuses on three applications - but makes them available in more forms than you can imagine. Let's count them:

1. The ThinkFree-hosted edition

2. The server edition (for self-hosting by enterprise customers and on-premise hosting by telco and ISP partners)

3. The iPod edition (so that you can travel with your sales presentation, but not your computer)

4. The USB edition (which allows you to edit documents on someone else's computer without leaving any trace of your work after you disconnect)

5. The upcoming premier edition (which allows synchronized online/offline document editing), and

6. The also upcoming SMB edition (which allows companies to create groups for different sets of employees to share different documents).

All of the above offer round trip compatibility with Microsoft Word/Excel/PowerPoint.

But I think what makes ThinkFree really, truly awesome is the company's idea of what SaaS should be like. VP Marketing Jonathan Crow says that one of his most important priorities is DocExchange, a shared repository of user-submitted documents. Because there's more to online collaboration than sharing documents with people you already know. It's also about leveraging and building upon the enormous amount of collective knowledge out there - knowledge that would have been inaccessible without SaaS. SlideShare and Swivel will have to watch out; as DocExchange evolves, ThinkFree users will be able to view public slides/datasets/documents - and reuse them on the spot.

This is as exciting as Amazon's EC2 machine image sharing announcement earlier this year. As Amazon puts it, sharing accelerates community-wide innovation. Not coincidentally, ThinkFree's document viewer runs on EC2, and DocExchange files are stored on S3. (SlideShare is an S3 customer as well.)

Earlier today Dennis Howlett wrote that being a Connector (in the Tipping Point sense) is part of every service provider's job description. Some connections are specific (you could introduce two customers to each other), others are sort of self-organizing (SlideShare making customer A's knowledge accessible to B, C and D through tags, auto-recommendations, etc), and still others are implicit (Freshbooks making aggregated invoice data available to customers within the same industry).

In the future of SaaS, I think, winning vendors will get ahead by being the best Connectors rather than the snazziest technology providers. (Which is why biggest community wins.) ThinkFree is well on its way. Google will most likely catch up. And Zoho; I'd bet on that. 1&1 CEO Andreas Gauger tells eWeek that he hopes to generate more SaaS than hosting revenues within 3-4 years. Could it happen? While he's got a sizable customer base, he's far from being in the Connector business. If I were him, I'd give TJ a call :)

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In Case You've Read Otherwise, SmugMug Still Loves S3

Mon, 12 Mar 2007 17:01:00 -0400

Last Thursday night, I came across this SearchStorage.com article via the Storagezilla blog. Beth Pariseau wrote that Amazon's Simple Storage Service (S3) has had "performance and reliability issues serious enough" to prompt second thoughts among early adopters. In particular, SmugMug CEO Don MacAskill recently decided to move hot storage back in-house.

The instant I finishing reading the article, my RSS reader lit up with Don's response. He still loves Amazon, even if S3 hasn't solved the "speed of light problem". It takes at least 60-80ms for bytes of data to travel the distance between SmugMug's west coast location and Amazon's east coast data center. There's no getting around that. He moved hot storage closer to his web servers NOT to solve Amazon's performance problems, but to reduce those thousands of miles to inches. Don also tracked down the Storagezilla post and added a comment there.

Fast forward to this morning, when someone sent me a snippet from a Tier 1 Research news brief in which Dan Golding wrote about Amazon's disillusioned users. I gave Dan a hard time for basing his article on the same two customers Beth interviewed without giving her credit. Dan argued that attribution isn't customary in the analyst world. Besides, we shouldn't even be having this conversation. As a non-subscriber, I should have deleted any T1R content that came my way upon receipt.

Ironically, during his HostingCon presentation last year, T1R founder Andy Schoepfer's key message was "don't be an island". It's important for web hosting providers to connect customers to external ecosystems like eBay and Amazon, because no e-business can thrive in isolation. Given T1R's Hosting 2.0 advocacy, Dan's reaction seemed... Analyst 1.0-ish. But towards the end of our conversation, he did promise that an upgrade is on the way. As a point of reference, Burton Group, Dan's former employer, has a great blog that links to external sources. Same goes for Forrester. And at least 220 other research firms, including T1R parent company The 451 Group. Raven Zachary, who leads 451's open source practice, is even on Twitter!

Anyway, I'll get off my soapbox now and back to Amazon. I think every web hosting exec needs to read Don's blog post - along with Robert Cichon's post on customer satisfaction metrics. Robert said a hosting provider has done a good job if (a) the company gets written testimonials, (b) customers refer other customers because they're happy with service quality, and (c) customers defend the company against negative remarks. Amazon gets three points based on Don's reaction. What's your score?

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