I’ve been doing a lot of research of late around the future of the Cloud, what of the hype is real and where the market dominance will be for Internet based applications delivery. I read a piece by one of the analysts I follow and he gave some sage advice about not getting drawn into the herd of marketers who are using Cloud as a platform to sell anything in their portfolio by renaming it “Cloud -X”. Another analyst I follow put together a great map of the differing technologies that make up Cloud Computing and one of the huge foundational pieces is that of Software-as-a-Service. In fact both of these analysts would say that SaaS is absolutely not hype and is one of the pieces of Cloud that will not only emerge, but flourish in the process.
In my research, I’ve been trying to assess the total number of Windows based applications that are in market today. The purpose is simple. To determine the total market opportunity in the SaaS space you first have to determine who is playing in it, what the applications are and who will subscribe to those applications. SaaS is defined as “a model of software deployment whereby a provider licenses an application to customers for use as a service on demand” and there is no distinction between Windows based applications and Web based applications.
Since Windows still enjoys over 90% market share in the operating systems realm, it also makes sense to extrapolate service offerings based on what businesses are currently using… which happens to be Windows based solutions. The difficulty in making an assessment for the total number of Windows based application in market today is nobody wants to talk about it. Microsoft got in hot water in 2000 with the DOJ because of the volume of Windows applications in market creating what was being called a “barrier to entry” for developers of other platforms. As a result, Microsoft doesn’t publish this information. And the forums that support Windows developers are only microcosms of the larger eco system.
Third parties make attempts to extrapolate the total population of Windows based apps, but we don’t often see real data to support it. To add to the problem, some support programs for Windows based apps are considered applications themselves. Some estimates have the total number of Windows based applications in the 100,000 range and above. In 2008, Windows Mobile apps alone totaled 18,000. Even if we take a fraction of these estimates there are still a huge number of applications to consider. For purposes of this blog, let’s take a total number of 120,000 and divide that by 1/2. That would leave us with approximately 60,000. If we cull that number by another 50% to delineate only business applications we get a total of 30,000 applications. If we use an equal distribution of applications per business segment (Finance, Gov’t, Healthcare, Communications and Services) we have 6,000 applications per segment.
That means that there is an opportunity for 6,000 Independent Software Vendors (ISVs) in each major business segment to expand their base by offering a different route to market. Many of these ISVs have been stifled in their growth because of their current sales motion and distribution channels. Also, servicing their existing customer base is expensive because upgrades must be done through expensive marketing, downloads and retail shrink-wrap sales. Up to now, there has only been one alternative… re-engineer and re-code to a web enabled browser based application. This is a very, very expensive approach. But what is an ISV to do? If he wants more revenue through expansion of his base of customers, is there any alternative?
Well the answer is yes but I continue to be dumb founded that more ISVs don’t look to Citrix when they begin this analysis. When Terminal Services was in its infancy, Citrix was solving the problem of remote access even before the Internet reached the masses. The identical technology can be used today to solve the dilemma of ISVs in the SaaS space. Why re-code when you can host the application just as it is and give users the same experience as being loaded locally? The question is will the ISV of today be savvy enough to choose the Citrix path before spending millions on re-engineering the code? Time will tell.
I’m willing to bet that any Windows based ISV who does adopt Citrix technology to expand his base of customers through SaaS will be miles ahead of his competition who are spending money on re-engineering instead of capitalizing on additional subscriber growth with the same code.
By the way… if you’ve got a better assessment of the total number of Windows Application in market today I’d love to see the comment!