Host your own SaaS with Open Source – the potential of Mosso

Show me a profitable business application-as-a-Service (SaaS) company.

There is a lot of trade talk about the success of Salesforce.com. Here is a company with a $3.2BN market cap as of Oct 26, 2008 currently trading at 24 down from 72, 5 months ago.

In 2007 – SF.com  posted a net income of $480K on revenue of $497M. Compare this to BMC Software,  a software vendor that provides system and service management solutions for the enterprise. BMC has a current market cap of $4.2BN, trading at 23 down from 39, 3 months ago. In 2007 – BMC Software posted $215M net income on $1.5BN in sales.

In plain language – Salesforce.com does not or cannot charge high enough prices for their services to sustain long-term profitability and growth.   At low price points; Free Open Source on inexpensive hosting becomes a highly-competitive alternative, especially for an SME.

Five years ago – the barrier to entry was application functionality but today, Free Open Source line of business applications like Sugar CRM Community edition are mature, full-featured applications with very little, if any, missing features and some unique advantages that Open Source offers.  Salesforce.com imposes a unique IP address/user constraint which can be very annoying. In SugarCRM, if you get User logged out when IP dynamically changed, just change 1 line in config.php

‘verify_client_ip’ => true, to false

Suppose you need a CRM system (if you’re a large shop, you already have one – like Siebel). We’re a small group of 5 guys – and we were using Salesforce.com with one of our business partners and wanted to use SF.com for our own business. The cost is $325/month or almost $4,000/year for 5 users. You can get 90% of the functionality from Sugar CRM for the cost of a onetime installation (which will take less than an hour of your time or about $150 if you pay someone) and $15/month for the hosting (if you use dreamhost.com, like we do). That’s a net savings of $3,000 / year.  dreamhost give us 700GB – more than SF.com, and the response/time is at least as good.

I know you’re saying that dreamhost.com at $15/month can’t compete with the scalability, reliability and service levels of SF.com. Maybe,  maybe not – but if you want muscle – consider Mosso.

For $100 per month, Mosso will sell you 80 GB of SAN storage, 2000 GB of bandwidth, a control panel to create sites, email accounts, databases, etc. and customer support.

Mosso says it takes radically different approach to Web hosting, using enterprise-level architecture. It deploys each website across clusters of servers, so when a server crashes or a hard drive fails, the other servers in the cluster pick up the slack without downtime. Their promise: for every 1 hour of downtime, they will reimburse you for 1 day off your bill.

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7 thoughts on “Host your own SaaS with Open Source – the potential of Mosso

  1. SF.com’s prices are rediculously high… You would think considering that most companies that would even be interested in crm software would be small businesses how would be less-likely to pay that much anyways.. There are a lot of good crm systems out there, just takes you finding the right one that fits your needs.

  2. Thomas,

    Totally agree. I was initially inclined to use SF.com for my business but the prices and basically crappy response-time outside the US (we’re in Israel and Poland) convinced me to look around. We host on dreamhost.com and the latest SugarCRM install was a snap (granted we’re techies…). SugarCRM is good, with a few neat features that make it a better fit for our needs. I took a look at Concursive – and found it too slow and clumsy. The fact that SugarCRM has a very active community and is so similar to the way SF.com operates made it an easy choice for us.

    Personally, I’m in favor of applications that can install easily on hosted infrastructure and many of the Java-based apps don’t really do that.

    Danny

  3. Some more details on the installation

    I installed the latest version Version 5.1.0a (Build 4837) this week on dreamhost.com and in general it was a snap. The instructions regarding directory permissions in general and in relation to .htaccess in particular may be confusing to people unfamiliar with Apache.

    An installation on my Ubuntu 8 workstation in the office went fine using this scheme:
    # Set SugarCRM privileges
    sudo chown www-data -vR crm/ # Ubuntu/debian
    cd crm
    chmod 766 config.php
    chmod -R 766 custom
    chmod -R 766 data
    chmod -R 766 cache
    chmod -R 766 modules

    On dreamhost – I followed the same procedure without changing ownership of the crm directory. FWIW – these are the recommendations from the SugarCRM Community Edition Web site.

    However – a number of bugs appeared – I could not update the custom logo, couldn’t update the scheduled call date in call tasks and the studio application wouldnt work at all.

    Looking at the Apache log files I saw a
    Permission denied: /home/user/htdocs/test.html/.htaccess pcfg_openfile: unable to check htaccess file, ensure it is readable
    message appearing on almost every page operation.

    This error message means that Apache is unable to check whether an .htaccess file exists. This is often caused by too-strict file-system permissions on the directory (as shown by the (13)Permission denied part of the message).

    The solution in our case is to chmod -R 755 crm – where crm is the parent directory of the SugarCRM application.

    This solved all my .htaccess issues.

    Hope it helps other people also.

    Best regards
    Danny Lieberman

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