Software as a service is alive and well in SA. One could even say South Africa’s progress is world-leading.
For one-time Royal Naval officer Rick Parry, the Damascene moment came around a decade ago: it made absolutely no sense to buy software through great big up-front payments. The risk, as he saw it, was all with a client, which would typically sign up for an application, with supporting database and fourth-generation language (4GL). These would be paid for in one massive, unyielding lump sum; then would come the development or implementation costs, and annual maintenance costs, with no guarantee that the software would work.
Rick Parry, MD of Progress Software
There had to be a better way, he reasoned, and some of his pioneering partners and clients agreed.
So it was that the MD of Progress Software South Africa introduced the concept of software as a service, or SaaS, to the South African market - and then it was subsumed into the rest of Progress Software worldwide.
Parry is relentless in his drive towards SaaS ... and a number of his partners (more than 30 of them in South Africa) have bought into his value proposition with great enthusiasm.
And so they should: it has allowed them to carve market niches that would otherwise have been excluded to them. Take the examples of MIP, Auto-Mate and Agri IT:
* MIP, with its risk-based billing model, has used SaaS to acquire business that would have been lost to it, and in the process grown faster than any other Progress partner, made inroads into the Sanlam account, won two international awards, made itself a major player in the financial services software market, and directly impacted the strategic direction of its clients. It has also made a significant impact on the billings of Progress by boosting its annuity revenues, which now represent 60% of its annual billings.
* Auto-Mate, despite the presence of a number of predatorial competitors, continues to grow its annual revenues through the flexibility SaaS gives it. As a consequence, it is and successfully defends its position as South Africa's leading supplier of IT systems for the automotive dealership market.
* Agri IT, which provides IT services to Kaap Agri, the commercialised Malmesbury-based agricultural co-op, has grown its number of Progress seats from 500 to 1200, winning contracts in the Boland and Namibia due to its SaaS approach.
Progress Software South Africa is also unique in its marrying two related, yet separate service-based approaches to software applications: software as a service, and service-oriented architecture (SOA).
As a company globally, Progress has committed itself irrevocably to the SOA paradigm; as an example, its Sonic enterprise service bus (ESB), credited by Gartner as the original ESB worldwide, is marketed as the underpinning for SOA, providing as it does a rigid and consistent backbone for connecting disparate, widely distributed and often technologically incompatible applications and components.
"SOA represents the most elegant and cost-effective way of delivering software today," says Parry. "It means companies for the first time can re-use existing applications and functions using open standards. It also opens the way for partners to collaborate using their previously standalone applications and functions."
The combination of SOA and SaaS is proving irresistible. As an example, partner MIP has long been writing all its applications in the SOA paradigm, even before it was known as such.
SOA is the latest incarnation of an iterative development evolution that began life as object-oriented development, evolved to components, entered adolescence as Web services and is now known as SOA. At its heart is the desire to re-use work already done, and to bring programming code closer to the data against which it operates. SOA is also a more accurate representation of the way in which business operates, and it is inherently web-aware.
"Years before SOA became a buzz phrase," quips Parry, "we were pushing towards this method of developing and delivering software. It is good to see the rest of the world catching up."
Progress began life as a company marketing a robust database which was tightly coupled with its own fourth-generation language (4GL). This database and 4GL gained fame as being highly reliable and low-cost in terms of their administration, compared to some market leaders. The combination of low cost and reliability made Progress an obvious candidate for an embedded environment, and very soon Progress was the world's leading embedded database.
Today, Progress, into its 26th year, trades this database and 4GL as OpenEdge, and most of Progress South Africa's partners have built their revenue streams on it. In addition, many of South Africa's largest enterprise applications run on it, and OpenEdge applications touch millions of people's lives every day, even if they do not know it.
Now, Progress's challenge is to take its loyal and committed partner base into the new world - where in the past they may have sold into medium-sized businesses, they must now target the largest organisations in South Africa. It might not be possible, and to this extent, Progress has had to create its own direct-selling salesforce.
"Our partners are our lifeblood," says Parry, "but the new products we have in our catalogue through the acquisitions and research and development activities of our principal might not be appropriate for some of our existing partners. That is a reality, and as we seek to provide the returns the market demands, we have to evolve our strategy."
The new products are compelling:
* Sonic, as mentioned, is the market's leading ESB - rated number one by both Gartner and Forrester - and has over 300 deployed sites worldwide, more than 20 of them in South Africa.
* Apama, the most sophisticated event stream processing platform on the market, is able to track millions of events, find patterns and report on them, all in realtime. Its applications are self-evident in telcos, crime control and prevention and financial service markets.
* Actional provides visibility, control, security and runtime governance, all of which are critical in SOA. Without this, SOA can spiral into chaos, being as widely, even infinitely distributed as it is. Actional is in the lead within Gartner's magic quadrant.
* DataDirect, which provides data connectivity components that use industry-standard interfaces to connect any application running on any platform to any major database.
* ObjectStore, the leading object data management solution, which enables users to store C++ and Java data up to 100 times faster than with a relational database or file-based storage system. In essence, ObjectStore allows organisations to resolve the inherent disconnect between relational and object data types.
* EasyAsk, which provides natural language search and query capabilities that empower business and consumer users to quickly find and retrieve critical information from multiple enterprise data sources.
"If it seems impossible for all of these technologies to be deployed together, think again," says Parry. "BGN, the Netherlands' largest bookseller, combined all of them to create the world's most compelling customer value proposition. It demands replication elsewhere in the world."
By way of example, BGN developed its core systems on OpenEdge. It applied third-party RFID tagging technology to track every book delivered by all publishers across the Netherlands through the retail process, from publishers' warehouses to customer requests.
"BGN was able to optimise its supply chain, enhance its customers' experience and achieve competitive advantage, relative to its online competitors," says Parry. "It has trimmed manual inventory steps, reduced the opportunities for error, and dramatically improved management of its supply chain process. In addition, EasyAsk allows shoppers to search dynamically for books using natural language, both online and in-store.
"This selfsame competitive advantage is available to retailers of every shade," adds Parry. "There is nothing stopping any company from combining these technologies to take the leap forward."
Anticipating a new world, Parry appointed Kerry Evans, formerly of SAS Institute, to head up sales. It is a long, laborious process to sell at the enterprise level, but Parry is very heartened by all current indications.
"We have made significant sales across many industries in the last six months and our pipeline is healthy. Having introduced the Sonic ESB and Actional into the market last year, we will be launching Apama and Easy Ask during April 2007. We believe the combination of our offerings, the commitment of our partners, the flexibility of our approach, and the durability of our and our partners' solutions, will ensure Progress's success for many years to come."
Progress Software at a glance
* In business for 25 years.
* Products in use at more than 60 000 organisations in more than 140 countries, including 90% of the Fortune 500.
* 2500 global partners deliver more than $5 billion worth of Progress technology.
* 2006 revenues of $447 million, up 10% from $405 million in 2005, with operating income of $40,9 million.
* Progress Software South Africa has been profitable in every year since launching in South Africa, after buying out former distributor RealTime.
For more information contact Rick Parry, Progress Software South Africa, +27 (0)11 254 5400, firstname.lastname@example.org