The main question was “will corporate America embed SaaS components within their infrastructure?”

My argument is “well, it depends!” It depends upon who else is using the component, what the other users think of the component, and the stability of the company providing the component.

Let’s take a scenario. Let’s say I’m tasked with building the next “great Trading Application” at Mega Corp USA. I have a deadline and the pressure is on to get results.

I have several options:

1. Build the App from scratch - Expensive to build, expensive to maintain, job security for the author, bound to be riddled with bugs until version 3 at least, and worst of all given my deadline, it takes a long time (think of an estimate and multiply by 3)
2. Download some open source code form SourceForge - The Mega Corp USA will still be responsible for maintaining the code in the long run (Expensive), I need to customize the open source code to my requirements, but at least I have a running start which should reduce the time to delivery. Hopefully the open source code has been used by more than just me (by definition), so therefore it will likely be more robust (fewer bugs) than writing from scratch. I still have my job security as a programmer, because it is still custom code developed, adapted and maintained by Mega Corp USA (expensive).
3. Utilize a SaaS component - Once the interface is written to incorporate the component within the corporate infrastructure, I can use the component immediately, multiple users are using the exact same version of the code and so therefore there should be fewer bugs. There is a quote somewhere that states something along the lines of “No bug can withstand the stare of 1000 eyes” - in other words the more people that use a program the more likely it will be bug free. The vendor is responsible for upgrading the component, and here is the really good news: Since you have a well defined interface, the upgrade will be completely transparent to Mega Corp USA. Rather than a spider’s web of interfaces that cause upgrades to take years and cost a small fortune, SaaS upgrades should be completely pain free. As an example of this in action consider Salesforce.com. I may have all of my sales funnel information in SalesForce but every time they upgrade their code it will have NO IMPACT on my organization.

I believe that the case for software components are sufficiently compelling that Corporate America is being forced to sit up and take notice. It’s just a matter of time before components are widely utilized.
One of the major hurdles to be cleared before this becomes reality however is the other items from my “it Depends” list above, i.e. It depends upon who else is using the component, what the other users think of the component. That is exactly the problem that TENXCO is solving. A search, ranking and rating service for Web Services and SaaS components.

After all, an application is simply multiple modules communicating with each other via procedure / method / function calls. Each module probably reads / writes/ edits / deletes from a database and passes variables of information between each module utilizing well understood interfaces.

What’s to say that the next company making decisions regarding their deal capture, contracts or counterparty system shouldn’t use a service made available by a vendor that has made modules or even individual screens available as a services?
The vendor would specify the interfaces to the service, just like web designers do with google maps today, and effectively embed the screen into the company’s IT infrastructure. For an extremely simplistic view of what I’m suggesting here it is worth considering two very different applications Google Maps and Craigslist

. Google Map

Paul Rademacher creator of Housing Maps.com

These are two very different web sites. One provides a web map of a location and the other provides items for sale and / or rent in a location. Combine the two and you get Housing Maps. HousingMaps is the creation of Paul Rademacher which is a “Mashup” of Google Maps and CraigsList. The result is an overlay of houses and apartments available for sale or rent on top of a Google Map of the area searched. For more on the creation of housingmaps.com see this article.

After reflecting on the consequences of this for a while I started to realize that there is a huge opportunity for corporations worldwide to run with this concept.

So why would a company do this?

There are multiple reasons:

• Reduced upgrade costs - the vendor of the service can upgrade functionality without it affecting the internal infrastructure within the company
• More flexibility in how vendor solutions are utilized within an organization
• Better quality software - Easier to test, more users should mean fewer bugs
• Componentized software - more agile solutions for the business

I was recently discussing these ideas with Perry Young who is President and CEO of Palm Tree Business Solutions Perry’s response was exactly the response I was hoping for: “Yea why not?”

To reach new levels of functionality and maturity, companies need to know where the risk is, how to defi ne what’s wrong and what tools to use.”… Hmm interesting.  I’ll be looking into this some more.