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The force is with virtualization — hosting as many of your applications on as few machines as possible. 

We have seen this movie before. Client-Server was all the rage when web technologies came into vogue. All of a sudden, we didn’t have to visit every desktop to “do an install”. Once the trend got going, the cost savings became quite compelling. It took a number of years but eventually most of the applications were rewritten to be web centric. The installation problems moved from user desktops to the company’s servers. 

Virtualization is the next step in that continuum. The cost of managing your applications on your servers is getting felt and, slowly but surely, applications are getting SaaSified. They will probably need to be rewritten, just like they were in the transition from Client-Server to the web, but that will take time, effort and investment. The venture guys are reluctant to fund a new company unless it is a SaaS company. 

What I don’t know is whether the economy is helping the trend or hurting it, which is why it is difficult to assess when SaaS will become the dominant trend. It might be helping by creating the pressure to reduce cost. It might be hurting by reducing overall investment. Time will tell.

What does it mean for early stage companies?

• If your needs can be met with a SaaS solution, it’s a no-brainer.  Go for it.  SaaS is typically priced by number of users and at the early stage you don’t have too many of them anyway.
• Consolidate your other needs into a Minimum Viable Platform (MVP).  This requires choosing your applications with an eye to how they will be operated.  Once you have picked the MVP, look into using a standard hosting service or a data center.  Prices vary from $10/month to $5,000/month so if the burn rate is important, make judicious choices.  Call us, we can help.
• If faced with the choice between an inadequate SaaS solution and a strong web solution, look at your requirements again and decide on the best way forward.
• If faced with the choice between an inadequate SaaS solution and a strong client-server solution, be very careful.  As Yoda would say, The Force is not with you.

Copyright © 2009, J Singh