OpSource Says "Get On The Bus"

If you are at all involved in the software-as-a-service, hosting or MSP industry, you've likely heard of Internet startup OpSource. Headed by co-founder and CEO Treb Ryan, a former Metromedia Fiber Network exec, OpSource seeks to be the operations services company for others looking to get into the SaaS game.

Last week while attending the SaaS Summit 2008 conference put on by OpSource, I had the pleasure of interviewing Treb Ryan. Treb was kind enough to sit down right before the VC panel discussion and talk about OpSource and the announcements made during the conference.

I think you'll enjoy the interview with Treb who is an excellent communicator, spokesperson and representative of his company OpSource. Also note that Microsoft was a major sponsor of the SaaS Summit conference, and while Microsoft didn't make any major announcements at this conference (they just launched Windows Server 2008 the day before), they did have a significant presence. You might also be interested in checking out my interview with Microsoft's Michael van Dijken.

Note: In the interest of full disclosure, that same week one of my companies Absolute Performance became an OpSource partner, and attended the vendor Expo portion of the show. I ended up attending the SaaS Summit conference both as a blogger (my original plan) and as a representative of Absolute Performance.

Let's start by hearing about what OpSource does and how Treb and his co-founders got the idea to start the company in 2002.

Compliance, reliability and end user adoption is what Treb calls "application operations". Treb also describes their 2007 addition of what he calls "Business Operations", or OpSource's Analytics offering.

Literally weeks before the SaaS Summit show, OpSource bought the small SaaS based billing company, LeCayla. Here's Treb's description of why this acquisition made sense for OpSource.

And now, time to "get on the bus", the OpSource Services Bus. These are the web services offered by OpSource, integrated with OpSource partners and software. Clearly, the focus is now on integration, connecting SaaS software applications with other online services and also with enterprise systems in the customer's environment.

Is SaaS now being sold to IT instead of the business units? No, but enterprise IT organizations are now being brought in to get SaaS services working with other internal applications. This ties into OpSource's announcement at the conference, OpSource Connect and something called OpSource Sockets, pre-built connectors to other third party SaaS applications.

 

Next, we talk about the process a SaaS application vendor goes through to become part of OpSource Connect and participate on the OpSource bus. The process goes much quicker if your application already exposes web services for integrating with your software.

Lastly, we wrap up with OpSource's focus for the next year and beyond. Clearly, again integration is important but Treb raises an very challenging question; Can you run a reliable, scalable web services based business? This is what OpSource is attempting to do.

SUMMARY

This interview was a fascinating one for me given the work I do in On Demand software, networking, security and entrepreneurial businesses.

OpSource is an unusual VC funded startup company because they position themselves as a service company, an extension of the ASP and MSP business model. But in this case, OpSource is working to be both a one stop shop and an integrator of SaaS software, back office business applications, and enterprise software appls. VCs are more cautious about investments in services and integration companies because the valuation multiples aren't as high as they are in other startup software businesses.

I think OpSource is pioneering a move to a much stronger services-based model (beyond just On Demand or SaaS Software) and it's important for our industry to value this approach in the era of SaaS business models. This could have a profound impact on how we view and value other MSP and ASP service providers.

The OpSource services bus and corresponding Connect program make sense. As enterprises favor more and more SaaS applications over traditional embedded software products, the importance of integration increases. Frankly, most of the work in enterprise IT organizations is integration work. But I can tell you from personal experience, selling integration software and services is no cake walk. First, it's like billing, support or other back office type software -- it's not sexy and doesn't directly move the needle for most business units. Which is why they like SaaS over internal IT applications in the first place. While not impossible, I think the integration story will be a bit of a tough sell.

Beyond integration, this could signal a unique position for OpSource, as the interface broker for web services to/from SaaS applications, like the ATM networks of the 80's, interconnecting financial institutions' ATM machine networks. That in and of itself could be a significant enabler, as part of the transition to SaaS.

FULL INTERVIEW

Here's the full, unedited interview.

Like this? Here are some of Mitchell's recent posts.

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Michael van Dijken on Microsoft SaaS and Windows Server 2008

On Demand Outlook & Sharepoint - Finally

SaaS Spawns Entrepreneurs

Check out Mitchell's Converging On Microsoft Podcast. Also visit Mitchell's personal blog The Converging Network and SSAATY Podcast. Visit Microsoft Subnet for more news, blogs, opinion from around the Web. Sign up for the bi-weekly Microsoft newsletter. (Click on News/Microsoft News Alert.)
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Copyright © 2008 IDG Communications, Inc.

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