Most of all we would not want to turn the Answers announcement into advertising. Instead, we decided to share our thoughts about two kinds of software – subscription based and the one you can pay for once and own, and specifically about web applications. As a rule, web apps are not to be for personal use, and to work in peer groups, like school teachers, employees, software developers. Then we actually explain how and why an idea was born to create some downloadable web applications. You don’t think we made Answers just because we didn’t want to use existing SaaS? Excellent! Then tune in to the philosophical mood (pipe, rocking chairs, a fireplace, and Sherlock Holmes nearby are highly recommended).
Because the whole internet world creates web services with monthly subscriptions (with some variations) and sells these services for a lot of money to the end user, we, at Deep Shift Labs, believe that there are still fans out there who like the concept of buying and owning a piece of software. System administrators are not yet extinct, they are the heroes, who are able to maintain the server software without spending hours on it, because they are professionals in their field and as a result are efficient and valuable.
For some strange reason, even the world of traditional desktop applications now also wants to sign you in. Adobe (picture) and Microsoft (picture) offer you to use their products with a monthly payment. Even AutoDesk (for free, as we understood – the picture) offers to view and edit your drawings in a browser and on mobile devices. Vendors of web applications are moving in the same direction. Products such as Kayako, Atlassian, and even the smaller, not so well known, open source CMS – Matrix (picture) are moving to subscription based services.
Time will show how successful these efforts will be. Perhaps, in the near future, we will all become accustomed to the fact that the software is available only by subscription – by month (subscription), by a user (per seat or named user license), by size (volume license) or their combination. We do not want to believe in it, and even somehow want to resist.
We are not talking about social networks, where they themselves are the product, and exist as a single copy to make sense. We are talking about systems that solve a particular problem; a real problem for your company or your personal one.
The list of web applications which can be purchased and installed is getting smaller and smaller. What types of licenses can we find here? Perpetual – our Answers, as an example – a one-time payment. For the named account – Atlassian and Kayako. Recurring revenue in this case is coming from the sale of support and providing access to new versions of the product for a fraction of the full license fee.
Fig. 1 Kayako
If you do not need support and do not care about upgrades, you pay once for a perpetual license. Enterprises do not do that but small businesses and startups can. With per seat licenses, you only pay when you have crossed the threshold of license restrictions (for example, Kayako and Atlassian license registered accounts).
10 staff $599
20 staff $1099
10 users $10
25 users $1,200
Splunk gives us an example of volume licensing. “Splunk Enterprise pricing in North America starts at US $ 6,000 for a 500 megabyte-per-day perpetual license, including first year support, or US $ 2,000 per year for a term license including support.” Here we see a rather unusual approach of using term licenses – in essence a subscription for locally installed software. That is, we pay 6K we own Splunk, but only if the volume of logs per day is less than 500MB. When you pay for a subscription, you pay every year, and are also limited to 500MB per day. I think we can find a similar approach amongst the monsters of the server software – Oracle, Microsoft, SAP.
Subscription services want to buy clients by giving them an option not to find/buy hardware, install, make updates, do backups. All updates are available immediately to all their users. Let us try to formulate the arguments of those who creates SaaS and those who do not want to buy or purchases subscription based services in the absence of other alternatives?
On the one side we have SaaS vendors:
- Cash flow comes regularly every month
- Not too much testing is required – release, monitor errors and quickly fix them on the server. No patches and updates to ship and headaches to support their rollover.
- Site hacked, passwords stolen, outage – apologize to users.
- Easy to sell the business. If the new owner will break the product, or close it; what will the end users do? God be with them. Here are just a few services we accidentally found while writing this post – Snip.it, Connotea, Qualaroo.
- Decide to raise prices or change plans – no problem.
- Remove some features and added another ones – well … some clients will be upset, some will even leave. The main idea is that more should come.
- Want to use your data? Learn our API and get what we provide and in the way we provide it. There are a few services which allow you to walk away with your own data. When such option is available – it is often AWS S3 bucket. Is this the only place where you can store the data now? Here are some examples – Loggly and Kissmetrics. In both cases we are talking about the log files. We found these SaaS companies which provide data export – DeployHQ and Sifter. Did you meet SaaS companies who providing database dump? Tell us in the comments.
- Do you have more traffic, customers, and employees? Excellent – you need another subscription plan. Yes – it is more expensive as this is our pricing model. That is, the additional resources that are often worthless are now used as an argument for a greater payment. In fact, you are already using their service, your data is already out there in a strange format and the cost to go to another service/product is significant. Argument is – you use it more – you have to be able to pay more. The real situation does not bother anyone.
- You can sell the impersonal data ( or not) that only you possess – the owners of the service, or use them to add functionality in the premium subscriptions. That is, data is created collectively by all users and sold back to them.
On the other hand the position of those who want to buy and install web applications:
- I want to buy a web app and own it. I see a fixed price and its functionality suits me as is. The purchased product becomes an asset of the company, not an expense.
- If the price depends on the number of users – not a problem. When, for example, the help desk department will have not 2 people, but 22, I am happy to pay the additional license cost as it is a one-time fee again.
- If an update is released and I need it – I can upgrade to it, or even pay 30-50% of the initial price.
- Do not worry that something you desperately need will disappear from a service you use, and something that is not necessary will pop up. You are in control and you decide to upgrade or not.
- My company has a system administrator, and he can install all correctly, make sure all is secure and set a backup. Or … my company is serviced by an on-call system administrator. The same system administrator knows how to provide continuity of critical applications you need – raid, failover cluster. Here’s an example – KissmetricsKissmetrics at the time I wrote this post (possibly analytics collection service worked). Guys from SemaphoreApp (picture) – are still happy to run client sites in Heroku, but migrated their service elsewhere. With their application it is not a problem. The problem is when you cannot pick up your stuff and go, because your data is in this particular application, and businesses cannot wait until you get the data from one provider and find a way to import them to another without loss. It is virtually impossible, and therefore makes you dependent on your provider.
See ScriptRock’s blog post – disruptions in 2012 at AWS, Azure, Skype, Google – companies with multi-million dollar budgets and thousands of employees. More recently in 2013 – GitHub and Office 365 with Outlook.com. People already calling it Office 364 after this incident.
- All the data is in my database – you can do any reports, integrate with other applications – no restrictions.
- Even if a vendor of the system does not promise to supply the source code in the event of business cessation, for some reason, we can always continue to use our web application. When you need to convert data into another application, if it is also not a web service, it is not a problem, because we have access to both databases. If the source code was not protected – even better, because we can make changes and possibly avoid migration to a new vendor.
Of course, there are SaaS that charge for usage. We pay Skype $16, use it and if we do not want to use Skype we will simply not pay any more. By the same principle, we created Nerrvana – no monthly subscription plans. We do not know how much testing time we will need this month and how much in the next, and so we assume that you do not know too. You can buy $50 worth of credit and use it in 3 days or 3 months. When it runs out – buy more credit or set up auto-recharge. Tests Nerrvana runs do not require major changes, which means you are free to leave at any time. There’s nothing holding you, and you do not pay for what you do not use. Both, Skype and our Nerrvana – SaaS. It is almost impossible to assume that you can buy, install and maintain such services yourself. They are both quite easy to replace if you are a business relying on them too. Project management, analytics, technical support systems, bug trackers, feedback collection, questions and answers portals – completely different. All of these systems can be downloadable and installable products.
Of course, if the company does not employ a system administrator, but needs a web service to operate and it is so good that you are willing to pay for it every month for as long as you will use it there is no alternative to SaaS. Somehow, it turned out that most companies do use them, and it is sad.
As you understand – we are primarily talking about things which lock you in and are hard to pick up and move. Moving a server from AWS is easier than an accounting system. If your site is for geeks, a simple loss of data will not be as critical as if you are tight with strict SLA with your clients and the clients may ask you to compensate for their losses.
As Steve Wozniak said: “With the cloud, you don’t own anything. You already signed it away. I want to feel that I own things. A lot of people feel, ‘Oh, everything is really on my computer’, but I say the more we transfer everything onto the web, onto the cloud, the less we’re going to have control over it.”
To summarize we would like to wish:
- SaaS vendors to adopt a standard of providing data export. Not API but the bulk data dump. It seems to us that the export must be in some kind of universal format, for example, XML. It can quite easily be imported into any modern database. We found a few good examples and it would be great if this approach will evolve into a standard for SaaS solutions.
- Downloadable web application vendors to ensure the provision of source code in the event of business termination or closure of the company or a change in business. Unfortunately it is hard to get going since there is no organization promoting this approach, which vendors can just mention they support. No one wants to sound pessimistic.
This will benefit customers but such openness is not yet achieved.
You can douse the fire and tell Sherlock Holmes to go clean his pipe – we finished our philosophical part and now further explain the idea of Startyco, where Answers is a first product.
So, when we were working on Nerrvana, being about half way in 2010, and not obviously knowing that it is only the middle, we wanted to make it easy for our users to collaborate and talk to us. We needed to find out what else we will need for our future users. By that time, we were well aware of the systems we needed, and wrote a series of articles – “Own Web analytics for startups” (the timestamp proves my point – 2010. We started building Nerrvana in 2008 and finished in 2012).
It was already clear that in addition to your product or service you at least need a marketing site, and then depending on the focus of your business, you’ll use a combination of the following systems – a blog (example WordPress), forums (example phpBB), customer support (example ZenDesk), ideas (example GetSatisfaction), questions/answers (example StackOverflow). Each company will use some combination of these systems, if you want your users to feel comfortable and important. It is true that in our articles we talked about web analytics only. It seemed to us, that it is impossible to obtain all the necessary data without integrating these systems and having access to the web analytics log files. Now we can say that our opinion has not changed. Log files access can be provided only by installing such systems on a server you can control. With SaaS solutions you do not have access to log files and even more – you cannot change the format, even if the logs will be provided to you. As a rule, you can add Google Analytics, which you cannot use to track individual visitors. It is even more complex when you use many different SaaS. In order to have a single session you not only need all systems to be on the same server but they should be pluggable. They should become a part of your system.
Logged in Nerrvana users can post feedback or answer questions, even view their own tickets in support system – no more registrations and separate logins. If it is not a Nerrvana user but just a visitor, it is natural to authorize via Twitter or GitHub. Such a visitor may, for example, ask a question on the Q & A site. That is, clients can do everything, visitors – not everything, and with the authorization through the social networks via oAuth, but still without registration.
We will illustrate our point with an example. Visitor (a person who does not have access to our application – www.nerrvana.com) may write an email to our support. Then, if he wants, he will visit the Answers (answers.nerrvana.com) and login via Twitter. If he used the same browser, it will allow us to relate its mailing address with his Twitter’s name. That is, in fact, the information is collected about all visitors and is stored in a single table in the database. For example, access for visitors and users can be expressed this way:
When a visitor registers in Nerrvana, his access is expanding, but we already know from where a user came from, what questions he or she asked using their Twitter or GitHub account. There is much more opportunity for analysis and, as a result, there is a chance to provide a better and more customized service to a particular client.
At first we went the simple way. We used our free time and realized that Ideas and Questions/Answers can be implemented inside the forum (we took phpBB). Then there will be only one step to integrate phpBB with Nerrvana. But if you see the admin panel in phpBB, you will realize that its integration with anything else is possible, but it will be a half-measure. It is too complex for what we need. We managed to implement two special types of forums in phpBB (type is specified when you create a new forum in the admin UI). One type – Ideas, the other – Questions and Answers. In Ideas forum, users can vote up or down, and leave comments. Each forum’s topic is a new idea. The administrator can set the status of the ideas – completed, in progress, duplicate, rejected. In Q/A forum each topic is a question and the posts in the topic are the answers. A person who posted a question (the questioner) can mark one of the posts as the answer. Voting for answers as in StackExchange is not implemented as we wanted to keep it simple. Finally we decided not to launch the Ideas and Questions/Answers in phpBB. It happened because we understood that it will be hard to support and customise.
We also postponed the blog and forum integration, as we had to create a forum and a blog that would be visited first. This is a task much more difficult than integration. The idea of a blog and a forum integration was that Nerrvana’s authorized users can comment in the blog without re-entering email. New blog posts will create a topic in the forum. Forum comments in this thread created automatically when a blog post is published will be visible in the blog on one side and the comments under the blog post will be visible in the forum. A year later, we saw a similar integration with WordPress in VanillaForums.
Around the same time, we needed to install a help desk system to support our big client in Australia. It was clear that we needed a single system to support clients for projects we do and for our own products we were going to launch. We published our requirements in a separate blog post. We looked at ZenDesk with “Multi-brand management”. To make a few portals for different products would cost us $99 a month for a single agent (the agent – the one who responds to requests from clients). We have four team members. Count yourself. 400$ per month. But even with this price tag we will end up with “Remote authentication/SSO” – users will log in with Nerrvana credentials, but they still need to enter a user name and password. We will not have access to web logs for our analytics as ZenDesk does not provide them and all the data is in their database. I will not repeat myself again; same problems. Finally we settled with Kayako as nothing better was found. It took a long time to set and customise, a lot of bugs, not built for easy integration – the user has access to the profile page in Kayako and can change the mailbox and password. There is a SSO option but how would you serve potential Nerrvana users who do not have a Nerrvana account yet? For some reason, every company considers its system to be in the center and do not even think that it can be made pluggable into another higher-level system. We managed to work around some problems, but again, the situation is painfully reminiscent of our attempts to integrate with phpBB.
Thus, our dissatisfaction with the existing state of affairs (as often happens) prompted us to create Startyco – a family of products that are not intended to be dominant, and were originally designed so that they can be easily integrated into your main application. That is, you select only those Startyco components, which are needed and plug them in one hour. Put custom styles so that the applications stylistically become a part of your main application and forget about it. That is – purchase, install, integrate and enjoy. Customers are happy, you do not waste time searching for solutions and integrations. Clients do not authenticate ten times, actively ask questions or talk to each other; the data is in your database. Since Startyco is not open source – bugs should be
To fill the gaps between working for clients and creating Nerrvana, we created Answers. They do not have all the functionality we wanted but we are actively working on it. We seem to have achieved the ease of embedding. For example – it only took one hour to embed Nerrvana Answers (answers.nerrvana.com), including CSS customisation. You can register to Nerrvana, go to Answers and see that you also already have authorised in Answers. You can logout from Nerrvana, go to Answers and click ‘login’ – you will end up on the Nerrvana login page. After authorization in Nerrvana you will be redirected to Answers, because you came from there.
For now Answers can be integrated only when the main application is also written in PHP and if your main product is built with MySQL or PostgreSQL. To test, I integrated the Answers with WordPress (MySQL) and Mantis (using PostgreSQL). Given that I had to integrate with products I haven’t built – WordPress and Mantis, integration process took not more time when we integrated Answers with Nerrvana. We assume that it will take less than an hour if the development team which built your main site/service will plug Answers in!
In the next version we will add WYSYWIG, to make it possible to have basic formatting, inserting of code snippets into your posts, inline images and attachments. Also in the new version you will be able to set Answers as a standalone application with own registration and authorization. That is, you can simply create a niche questions and answers site, for example, for Robocode players, and not worrying that your passion will not be drawn in Area51 of StackExchange.
While post was finally finished we actually added three new modes to run your Questions & Answers site. You can now use Answers in four different modes:
- Plug-in (your web app + Answers)
- Plug-in + oAuth (your web app + Answers + participation from visitors logging from social networks)
- Standalone (your niche Q\A site with registrations within)
- Standalone + oAuth (your niche Q\A site with registrations within + participation from visitors logging from social networks)
We will show how it works in a separate post.
Soon after this update we will launch Ideas – customer feedback/ideas collection or roadmap shaper for your main product or application. Then, quite obviously, we will stop using UserVoice for Nerrvana and other products we will have by then.
Tell us what you think!