In the first announcement, early last week, Google introduced the Google App Engine.  The App Engine is a developer tool that enables a developer to create scalable web applications run them on Google's infrastructure -- and Google promises 500MB of persistent storage and bandwidth and CPU for 5 million monthly page views.  True to form with Google, it is a "preview release," open only to the first 10,000 developers who sign up.  According to Google, the preview release of the development environment includes:

Why Is It Happening? Most analysis of these new offerings has focused on Google as an emerging force in enterprise computing, and its multi-front war with Microsoft, and whether a Google-Salesforce merger is on the horizon.  Speculation aside, Saugatuck believes the burgeoning Platform-as-a-Service (PaaS) movement will have a more disruptive impact in the long term.  Meanwhile, the synergy between Google and Salesforce in redefining the computing environment is, we agree, a serious threat to the Microsoft hegemony.

Saugatuck has been among the forefront of analysts arguing that Google has enterprise computing square in its sights, writing as far back as September 2006 that user executives can expect Google "to continue to deliver new SaaS solutions aimed at the business market" (see Challenge and Response: Saugatuck Principals Debate Google's Impact , MKT-270, 13Sep06) and as recently as March 2008 that "for those doubting that Google has enterprise computing ambitions -- doubt no longer" (see OpenSocial Foundation - Next Step on Road to Enterprise-Grade Web 2.0, RA-446, 26Mar08).  And we believe that talk of a GOOG-CRM merger is an effective red herring for the competitors of both companies to chase while each company seeks to put distance between themselves and their competition in the segment that really matters to both: Platform-as-a-Service.

In recent presentations of the results of our 3^rd annual Software-as-a-Service program we have predicted both a proliferation and an evolution of SaaS platforms through 2010 as they evolve to embrace user development and runtimes (see Notes 1 and 3rd Annual SaaScon Shifts the SaaS Industry Spotlight to IT Executives, RA-451, 02Apr08).  Our research lead us to develop the following two Saugatuck Strategic Planning Positions:

Saugatuck believes that it is this evolution in platforms, more than any other advancement related to SaaS, which will drive the rise of cloud computing and usher in the post-SaaS era of measured, monitored and managed business processes.

Market Impact:   The two announcements noted above represent two important examples of the type of robust cloud-based software development platforms and run-time environments that are emerging with a diverse set of supporting service offerings that make them viable alternatives to traditional on-premise development.  More importantly, each PaaS example is predicated on a different strategic purpose, a distinction which we believe should not be overlooked in attempting to understand how this PaaS will develop over the next three years.  We refer to these different types of PaaS as SaaS Development and SaaS Enablement platforms.

SaaS Enablement Platforms are built for one of two purposes:

• to enable ISVs to build and deliver SaaS applications (e.g., OpSource's On-demand or BEA Systems' Genesis or IT Factory's PaaS offering) or
• to enable solution partners of SaaS vendors to integrate and extend the SaaS solutions for their customers (e.g., Cisco's WebEx Connect, NetSuite's NS-BOS, Salesforce.com's Apex and force.com). 

These SaaS enablement platforms host and administer SaaS solutions in support of these strategic objectives, and in fact, were it not for force.com, the Salesforce for Google Apps offering would not have been feasible.  Thus far, only the force.com platform from Salesforce has attracted cloud development that can be considered independent of its SaaS solution.  This brings us to SaaS Development Platforms.

SaaS Development Platforms typically target cloud developers with technical languages like Ruby on Rails or Python and either offer runtime services themselves or resell those offered by partners in the cloud.  With the App Engine preview, Google joins Bungee Lab's Bungee Connect (also in beta), Coghead and Morph Labs in targeting cloud developers.  Other SaaS Development platforms include Facebook's platform targeting social networking developers that can be run either on Joyent or on Amazon's AWS (EC2, SQS and S3) -- as well as Engine Yard which specializes providing execution services for Ruby on Rails.

ISVs and other IT vendors looking to leverage the SaaS phenomenon (and that is about everyone these days) must understand the difference between these SaaS enablement and development platforms.  They must also understand that the selection of a platform is an investment in a particular ecosystem that may in the future become a limiting factor to growth, even if it is a short-term accelerant.  Careful consideration should be given to the underlying technology, technology standards and projected adoption curves for each.

In addition to the vendors mentioned above, we should take note of the other traditional IT Master Brands waiting in the wings.