SaaS-based Development Platforms: Is there any market value?

April 12, 2007
Salt Lake City, UT has AppExchange, NetSuite has Suiteflex and WebEx has WebExConnect. I recall reading something recently that referred to this trend as SaaS 2.0, where SaaS vendors extend their Software-as-a-Service applications to third-party software vendors and customers' in-house developers, proving that customization is possible with hosted apps. Is it really much different than the good ol' days when Novell extended their network with NLMs to encourage vendors to write applications to NetWare which helped Novell solidify their market positioning?

I recall working at Novell during a turning point for the company when Microsoft NT was threatening that market and Novell walked away from that position despite the resistance of its own sales force. And do you all remember the hot trend in the mid-nineties of GroupWare applications lead by Lotus Notes with Novell GroupWise getting into the mix? It was all about bundling a suite of apps into a common UI, and then allowing third-parties to integrate with it. It grabbed market attention at the time, but did they succeed?

Document management was in many ways considered a middleware app where many vendors wrote integrations to it as well. We had many vendors in those days write to our SoftSolutions application. Did these groupware applications and document management integrations provide true customer value and are we simply now experiencing a maturity in the SaaS world as it follows the same evolution? After all, SaaS is proving that its becoming the future in software? Where is it heading and is there truly customer value or simply a market ploy?

It's very interesting watching and NetSuite making attempts to do the same. I have to admit that I quickly became curious with the's strategy and their commitment to its third-party vendor channel as they have aggressively recruited partners to their AppExchange program. We jumped on the bandwagon and have enjoyed relative success as we offered solutions to our joint customers. has been building such a large partner program but then at the same time is clearly trying to take over the world by extending their own functionality, which in the end creates a channel partner conflict.  An example of this is their announcement this week regarding the purchase of a small document management start up named Koral, despite enthusiastically partnering with NetDocuments and other document management services as listed on their App Exchange program.

As the late Ray Noorda coined the word competition is this the posture that companies such as NetDocuments have to take to work with as its loyal partners and now perhaps competitors? After all has helped solidify and draw attention to the SaaS market. But do these decisions truly weaken their partner program and relationships with the market? Do they care? What should be the keys to a successful development platform that allows third-party vendors and more importantly, our joint customers, to truly leverage and take advantage of the virtues of SaaS?

What are your thoughts? During the coming days I will share our NetDocuments perspective regarding a document services development platform and how our strategy fits into this SaaS 2.0 trend.