New Poll on Challenges of Building SaaS Applications

New Poll on Challenges of Building SaaS Applications

http://polls.linkedin.com/p/14780/rljlo

The next poll question may be:

SaaS models, SaaS platforms, SaaS architecture.

Outsourcing in a Troubled Economy

In some of my posts and questions here and on www.linkedin.com I am finding some interesting comments about the demerits of outsourcing to another country when the US economy is in shambles and a record number of US worker are unemployed. (Although look specifically at computer and high-tech jobs at an all time high in the US, which debunks the myth that outsourcing was destroying US job opportunities. This needs to be investigated to truely understand the numbers.)

I completely understand US employees concerns about job loss and why should companies outsource more jobs when so many are unemployed, right?

One thing that seems to get missed, and as a former business owner, I recognize.

Companies choose vendors / partners with skills and resources that fit their budget and constraints. Not all companies are looking to cut their US labor force and replace them with overseas contractors. Some companies, also concerned about their own survival in this economy, dont want to take on new employees when they can hire a contracting partner which can be "downsized" with a lot less pain.

So they choose to hire a contractor. Most Americans wouldn't argue that contractors are another form of outsourcing. Now, when the contractor is in another country, then some people get upset. I understand. I've been there. I used to work in IT outsourcing in the US and was easily replaced by eager Indians who were willing to work for half my salary and twice the hours. How do you compete with that?

What I'm saying is that some companies want to expand, cant afford the risks and costs of US labor and choose to accept a partner in another country. when the project is up, the company simply tells the vendor, "good job, thanks, and maybe we will see you again."

No firing, no downsizing with severance. Trust me, business owners DO WANT TO CREATE JOBS. This is a source of pleasure. But closing the business due to non-profitability, and firing people is a source of pain for business owners and it wouldnt do anyone any good, especially the workers who get laid off because the company closes its doors.

Does this make sense?

Agile Development in Mexico

Here is an Agile Development Group on wwwLinkedin.com for the Mexican development community.

Agile Mexico

The Global Outsourcing 100

The International Association of Outsourcing Professionals™ (IAOP™)
announced 2008’s best outsourcing service providers – The Global Outsourcing 100

Most of these are fairly large companies but it is a decent list.

Indian Companies Recognize the Value of Nearshore

In this article, several indicators suggest that nearshore to Latin America and Mexico will continue to grow as an outsourcing alternative for US companies. Particularly for small and medium size companies that have moderate IT outsourcing needs.

http://www.nearshorejournal.com/2008/11/25/latin-america-emerging-as-outsourcing-alternative/

Mexico for IT Outsourcing And Team Augmentation

Mexico is an Excellent location for IT Outsourcing and Team Augmentation

Have you heard this yet? Is that news to you? It was to me just 6 months ago and I was part of the IT industry. (See my profile on Linkedin.com)

Mexico has been a on the offshoring / outsourcing radar for at least 4-5 years now. Many have written about it. It seems to make a lot of sense - close cultural ties, close proximity, similar time zone. See what others say:

Accelerance is an Outsourcing Consulting company. they help companies decide who amongst the many should be your partner.
http://www.accelerance.com/outsourcing/mexico.htm

CIO.com has several articles about the topic.
http://www.cio.com/article/151704/Outsourcing_Vendor_Genpact_Makes_Mexico_a_Passage_to_India

Some say US companies are choosing Mexico over India.
http://www.bnamericas.com/news/technology/Praxis_CEO:_India_facing_increased_competition_for_IT_outsourcing

Computerworld spoke of the trend in 2003.
http://www.computerworld.com/managementtopics/outsourcing/story/0,10801,84829,00.html

SourcingMag obviously has opinions.
http://www.sourcingmag.com/blog/archive/outsourcing_to_mexico_a_frank_appraisal.html

Offshore Experts posts several options
http://www.offshorexperts.com/index.cfm/fa/map.outsourcing_mexico

Again, the major players in outsourcing are easy to find
http://www.businessweek.com/magazine/content/06_05/b3969412.htm

Here you can find a list of Gartner events, specifically those around outsourcing summits
http://www.gartner.com/2_events/attributes/attr_58627_519.pdf

Gartner's Criteria are as follows:

1. Language
2. Government support
3. Labor pool
4. Infrastructure
5. Educational system
6. Cost
7. Political and economic environment
8. Cultural compatibility
9. Global and legal maturity
10. Data and IP security

This CIO article quotes Gartner:
"The seven countries from the Americas are becoming or already are attractive destinations for U.S. companies, but a lack of government support is restricting offshore development. Only Mexico rated "very good" in this area, followed by Canada and Uruguay."
http://searchcio.techtarget.com/news/article/0,289142,sid182_gci1286775,00.html

Here's the original Gartner press release
http://www.gartner.com/it/page.jsp?id=565107

Indeed, TechBA is supported by the Mexican Ministry of Economy and suports the export of IT services from Mexico to the US.
http://techbasv.com/joomlamain/index.php?option=com_content&task=view&id=41&Itemid=72

Stephanie Moore of Forrester has a good article about Mexico and nearshore development, although it is primarily god posture for Softtek, another large company.
http://www.forrester.com/Research/Document/Excerpt/0,7211,40995,00.html

Whole article here:
http://www.dataskill.com/no-shore/pdf/Forrester.pdf

More About Gartner's Summit
http://www.psia.org.ph/LinkClick.aspx?fileticket=VHcscQa9cFo%3D&tabid=56&mid=424

This blog goes into great details about the outsourcing considerations.
http://pragmaticoutsourcing.com/2008/10/24/pragmatic-outsourcing-vs-gartner/

Another good article from a product marketing company
http://www.phaseforward.net/news/Mexico%20Outsourcing%20Article.pdf

Choosing a Nearshore Application Development Outsourcing Partner

Application Outsourcing for Small to Medium Size Businesses



Ok, so your not big enough to even show up on the radar of Accenture, Bearing Point, CSC, EDS, Tata, Infosys, or Wipro, but you have a great vision, sound expansion plans and significant development needs. Where do you turn for Application Development assistance?



This is where it gets tougher. The small to mid size application outsourcing firms in the nearshore market like Scio, Softtek, Neoris, Nearsoft dont show up on the analysts radar either. There is no rating system for them. So you will have to do your homework. Below are some criteria you may consider when choosing a nearshore application development outsourcing partner.



1. Cultural fit

2. Company size

3. Number of resources with the tehcnical skills you seek

4. Bench size

5. Project history

6. Number of references from existing and past clients

7. Cost per hour for resources

8. Additional services offered beyond labor arbotrage

9. Executive management accessability

10. Communication Tools Used

11. Experience with Agile Development

12. Domain Expertise

Rapid SaaS Development Alternatives

When considering the application development aspects of building a SaaS business, independent software companies (ISV) have, as always, many options. They can use a Platform as a Service (Paas) to build their applications, which is a good and quick SaaS development solution for simple applications where the ISV is not concerned about 100% flexibility. Another alternative would be to leverage open source development platforms such as in a Java environment, which would allow for complete customization but would require more resources and for agreater length of time. The hosting options vary as well as companies such as Savvis and OpSource offer application management services beyond simple hosting facilities.

The decision to use a PaaS of build custom applications should depend on a few variables:
1. Who is your target market - Is it the SFDC clientelle? If so, you should consider developing on the force.com platform.
http://www.salesforce.com/platform/application-development/

2. Is time to market more important than customization and fleixbility? If so, you could consider platforms such as Corent, Servoy, Parallels, etc.
http://www.parallels.com/news/id,12436
http://www.corenttech.com/
http://www.dbflex.net/?gclid=CKTs1Lbln5cCFQquGgodUhRwSA

3. Will you develop in house or work with an outsourced product development company that specializes in SaaS product development?
http://www.sciodev.com/index.php?option=com_content&view=article&id=49&Itemid=139

4. Do you have the SaaS business expertise in house or will you work with a consultant?
http://www.thinkstrategies.com/
http://www.sciodev.com/index.php?option=com_content&view=article&id=51&Itemid=128

Obviously there are a plothera of SaaS Blogs to help product managers determine their technology and business options.
http://www.saas-development.com/what-is-saas/
http://buildingsaas.typepad.com/blog/development_processes/index.html
http://www.saasblogs.com/2007/01/25/it-costs-more-to-be-a-saas-company-how-platforms-may-fix-that/

Conclusions: You draw your own.

Outsourcing Silverlight Development

Silverlight, Microsoft's answer to Flash, Flex, AJAX, and other rich Internet applications (RIA) arrived with a bang. Silverlight 1.0 manipulated its multimedia-savvy, WPF (Windows Presentation Foundation) user interface using JavaScript. Silverlight 1.1, which added support for compiled .Net languages and supported more of the .Net API, was available at that time only as an alpha test. Now project requests are popping up for Silverlight development on project boards such as http://www.guru.com/ and http://www.elance.com/
There is even a proper Wikipedia page for Silverlight.

Scio Consulting is launching its Silverlight Partner page and is buys creating silverlight applications for small clients and internal project, such as the Total Cost of Engagement calculator used for determining the cost benefits of near shore application outsourcing vs inhouse, onshore, and offshore.

My guess is that as the cost of development rises in India, and more and more IT executives tire of traveling and conferencing all hours of the day and night, more people will see the benefits of nearshore application development outsourcing.

This Blog's For You!

This blog is for you if you are:

• An on-premise software company planning to create a SaaS version of your software
• An entrepreneur planning to launch a new SaaS product
• A vertical market expert with a SaaS product concept, exploring how to quickly build and go-to-market
• An established company in need of modern web-based information systems that leverage the investment in your legacy enterprise software

Mexican Nearhsore Development Companies

Scio Consulting
www.sciodev.com
Morelia, Michoacan
SaaS, Product Development, Agile methodologies, SCRUM, Java, .NET, C/C++, Eclipse Framework, Business Intelligence

Why Nearshore Software Development to Mexico?

Over the years many people have advocated the outsourcing of software development and manufacturing to lower cost countries such as from Japan to China, US to Mexico, Italy to Romania, and so forth. Obviously India and China have made great strides over the last 15 years. India in particular has made a name for itself in software development, application maintenance, and call center management. Those that would oppose such outsourcing, are typically those concerned about their jobs. Clearly they are most directly affected.

I would like to point out the direct and indirect benefits of offshoring software development to a nearby neighbor of the US, Mexico. I think most that consider the opportunity would agree it is easier to manage a relationships with a critical application development partner when they are in the same time zone, and only a 2-4 hr flight away from places like Chicago, Houston, LA, San Jose, etc. Certainly the cultural differences are smaller than those between India and the US.

I suggest we take a more macro look at the practice as a whole by looking beyond a company's decision to expand with a nearshore development partner rather than hiring internally, or elsewhere in the US.

Perhaps some of you reading this are familiar with illegal immigrant issues in the US and the discussions of building a wall between our two countries. You may remember back several years when maquiladoras (or factories) in northern Mexico provided good jobs to Mexicans. More Mexicans in the blue collar labor force were able to get decent jobs producing goods for US customers. Then suddenly China came into the picture and companies that were determined to improve their bottom line, cleverly figured out 1) how to produce widgets in China and 2) then ship them by sea to the US all for less than it costs in Mexico. While personally I find it hard to believe this to be possible given the rising cost of petroleum, I will accept it for now.

But let's back up. Where do these Mexicans now search for work when their local factories pack up and move to China? Thanks to the expansion of Cable and Satellite television, they have the American Dream pumped into their TV sets on a regular basis, so it seems an obvious choice to travel North, across the border.

So now we have an illegal immigration problem because unemployment is up in Mexico and so we pump up our border patrol to deal with illegal crossings, increase our immigration staff to deal with applications, and spend time and money debating the issue in the State and US Senate so we can build a wall or whatever.

Fortunately, it appears that through Mexican government cooperation and exhaustion from traveling to India and China every few weeks to improve coordination for the team, many are now considering acquiring a software development partner in Mexico, thus creating the nearshore software development industry.

Forrester is elaborating on the benefits of this new playing field while even the very adaptable Indian outsourcing companies are setting up shop in Mexican cities.

All good news for Mexicans. Happy to see our neighbors doing well. Hopefully they will enjoy the same epic success as India and China over the coming years.

Adios for now