Hosting close to your customers

In pre-industrial times, flour mills were placed close to the points of wheat production and consumption. It was hard and expensive to transport the wheat and resulting flour too far. The technology was hard, but not impossible, to replicate.

In industrial revolution times, factories were placed close to the point of raw material sourcing, canning factories beside farms, since transportation wasn't fast enough to transport the material before it went bad. However once processed it could be sent to warehouses anywhere, using economic shipping methods, for later distribution.

Skipping forward, now we're in Web 2.0 land. Our customers are everywhere, but really we will have geographical hotspots. At least if I split the world into broad geographical areas you'll probably have North American, Asia, and European customers (these being the general areas of Internet user concentration presently).

Connectivity

See this map?


See all those cables in the Northern Hemisphere? Abundant connectivity, short direct routes.

So why would you host content that required traffic to route all the way to, for example, New Zealand? Isn't this the equivalent of shipping logs to Japan for processing into paper, something that is possible but inefficient? Akamai know this, and have provided simple content hosting for yonks.

Fast international connectivity is useful to provide access for a broad base of consumers and to provide content providers a way to distribute their content. However I posit that distributing the content means to get it from the point of production to servers close to the point of consumption. It does not mean you need to host it in the content producer's back yard.

If I had content application with a worldwide focus, then I'd host my test and pre-deployment servers next to my company; but the production servers would be designed to be geographically distributed and my first one would be in the USA. The reason is that the USA gets free international bandwidth (pdf) and this flows into hosting deals you simply can't say no to. 2TB a month for US$29 in my case.

Once the US base, with cheap reliable hosting, was covered I would then target the geographical hotspots. The reason for doing this is not cost since the cost is likely to be higher, but latency.

Latency

Latency hurts Web 2.0 content. We have moved beyond simple pages with a few graphics. Applications now have many many server to client roundtrips, a lot of them sequential.

With a simple page loading some images that allows a browser to use multiple parallel connections and pipelining will get content served very quickly.

A SaaS application that uses multiple XML request/responses, for example a search-as-you-type application, can not use any of these. Latency becomes very noticable.

A local example, from my home computer, gives about ~2oms latency to local content. US content is ~200ms. Ten times slower. Human perception of delays starts kicking in at under 400ms (cf. telephony G.114 standard), and at 200ms per roundtrip without any server processing delay that will be exceeded very quickly.

The result is that a locally hosted SaaS application will "pop" onto your screen and should seem as responsive as a thick client. A distantly hosted application will have noticable (and inconsistent: jitter) delays. Your customers will notice this and regard your product as inferior.

Faster Pipes and Servers Don't Matter
Laying more fibre to your centralised data centre will not solve the latency issue. There are some limited benefits you can obtain by organising more direct peering into other hot spots, but there are things as fundamental as the speed of electrons/light working against it. You can't control the rest of the internet routing.

Faster servers can reduce the latency due to processing the request, but these delays are independent of the geographic location of the user and therefore should already be addressed by local performance testing.

What is next?

PaaS providers, like Google, will probably do geographic hosting automatically for you. I've not had a chance to look closer at App Engine yet, but it is rumoured to auto-spread the load through the cloud. Auto-spreading across geography is the next logical step.

1place respond

Martin from 1place has replied to me personally with an apology although little explanation, but subsequently posted a good comment (scroll down).

It is good to have some feedback finally, well done to Martin for being open about it. I will keep watching for a while and see the improvements and see if they restore some confidence. They have implemented some of the things I wanted already, and the data backup feature promises to at least allow a migration strategy.

Remaining to be fixed is their SPF record. I mean

1place.co.nz. 3600 IN TXT "v=spf1 -all"

is supposed to mean they never send email with the consequence their mail only just squeaks through my spam filters. Badly configured SPF is quite a bit worse than no SPF.

SaaS and trust: a NZ experience

(or Why I Should Have Used Xero/Cashboard)

I recently discovered 1place, via Ben or David. It was cool, AJAXy, NZ-based, cheap ($10 a month) and almost exactly what my wife needed for her business. The owners were receptive to changes and there was a good probability that changes required for a quote-and-invoice services business, as opposed to a sell-products or bill-by-the-hour business would be implemented. They had screenshots of the changes and everything. A virtuous cycle of suggestions and responses ensued.

They even did GST returns and a cashbook.

I was suitably enthused so I set everything up, trained my wife, and started creating invoices. It worked well even without the changes. It was promising to simplify our accounting and invoicing significantly without any of the internationalisation issues from other products.

Then one day they disappeared. Completely and without warning. We hadn't paid any money yet, but this was clearly in violation of their agreements. SaaS also means that your data is no longer available, and notably there was no easy extraction/backup mechanism from 1place.

They were gone from the internet for about a month (I checked periodically, so give or take a few weeks). We'd only done two invoices and we'd saved the PDFs, so it was a lucky escape. It could have been a lot worse.

1place have now reappeared. They did not respond to my contact form email asking them where they'd been and why I should continue to use them. I was polite but I guess they don't want to answer. I've not bothered calling them, if I didn't have the invoices already I'd be annoying them daily though. Their blog is noticeably silent.

Looking at the companies office details it looks like the guy I was talking to, Bevan, is now no longer a shareholder. That event and the website shutdown would appear to be related, but the lack of consistency, communication, and disclosure mean that I cannot trust them with our data ever again. Nor should you, IMO, without at least a way to get your data out at regular intervals.

I have waited a long time before writing this entry as I really wanted to give this product and company the benefit of the doubt and a chance to succeed; it fills the gap below Xero and is completely NZ focussed, and they were reacting to my requests. But this is a betrayal of trust, and this is something that I will look closely at before using any similar SaaS product (hey: it's a service that's a product) again.

Hopefully they will respond to this public review and you, dear reader, can make up your own mind. If nothing else this is a lesson to be learnt by SaaS providers and users. It can happen with off-the-shelf products too, but at least there is a lower probability that you'll be prevented from accessing your data on your own terms.

Bruce's new list of SaaS requirements:

1. Decent price
2. Decent service
3. Decent uptime
4. Decent way of getting the hell out of dodge (added).

I am disappointed to be in the position of chopping at a NZ poppy.

Online accounts, estimates and invoices. A NZ-based review as at August 2007

Okay, this one is a long one and has taken me a while to write. I'm happy to correct this and/or revisit this at a later date based on feedback; but these are my views of the various sites (I know I'm criticising people's babies).

I have been looking for a nice, self-contained, at-least-invoicing setup for Latam Design (free plug for my wife). I can't face MYOB or QuickBooks or anything of that genre. Every time I look at (non-SaaS) accounting software I cry internally "I could do better than that with my eyes closed, lets code one up in Erlang/Yaws and take-over the world". The reality is that:
a) I'd get dead-bored before I finished a proto-DB schema, let alone the core or the interface.
b) It is pretty nasty hard-core work that requires more than my cobweb-laden understanding of accounting.
c) It is boring. Oh I mentioned that. I like real-time millions-of-customers "you're down and you're dead" systems.
d) I don't need to be supporting this kind of stuff in my spare time.

So off I go, inspired by Rod's Xero Marketing (heh) to see what's on offer. While I was on holiday in Peru I discovered Cashboard. If you haven't tried any of these, I'd suggest you register for at least a couple to get the idea of what you can do.

Cashboard

Cashboard is pretty funky. All Web2.0'n'everything. It does estimates, invoicing and timetracking, and it can accept payments as well* . The MacOSX (grrr, StuDlyCaPs) widget for logging time is a nice touch, esp. given that side only uses Macs.

It didn't initially do NZD, which was a problem, but the owner added that pretty much instantaneously for me and gave me a double-your-grace period coupon. Great response, but it was the tip of the i18n iceberg...

You can create estimates very easily, although if you want to base them on effort but not disclose your hourly rate it becomes more tricky. If you have a paid account you can customise the format of estimates/invoices and send them as PDFs or links to the site. Nice. You can then turn the estimates into invoices, adjusted as appropriate, and auto-email the client (if you want).

It all works swimmingly from my two brief attempts. Adding new clients while in the invoicing process works just as you'd hope -- you can add them in situ without breaking your workflow.

Cashboard give you a .cashboardapp.com domain when you create your account. A nice touch and great for your customers should you provide them access.

The real problems come around the i18n side.

• US date formats everywhere, and I can't see myself sending invoices to clients (or showing them to the IRD) when 1/6/2007 means January not June. Confusion is not something I want to cause when I'm asking people for money.
  
• NZD is supported, although it helpfully says NZD everywhere. I just know someone is going to look unkindly on that...
  
• The only way to get my GST number onto an invoice is via the "notes" feature. This is the recommended way of doing it...
• I need TAX INVOICE on my Tax Invoices. This also has to go into the notes field.
• At the time it didn't do Timezones. It does now, which is helpful since auto-emailing clients with yesterday's dates wasn't appealling.
  

I know that Cashboard is developing quickly and has taken my/NZ i18n requirements on board, but the frustrating thing is that it is not usable for New Zealand until they get around to implementing most of them. I was quite prepared to pay for it, their rates are extremely good for what you get, and the ability to up/downgrade based on your success is fantastic.

* at least for USA'ns. The cascading requirement is that you must be able to accept CC's via a CC processor, which means you need a US bank account, which means a US address. This all ends up meaning "no, non-Americans can't". It just takes longer to work this out.

Xero

I would be remiss if I didn't mention Xero. I might disagree with Rod about what is holding back NZ from being the next Finland/Ireland/China^D^D^D^DHong Kong but I can't fault their product even at this early stage.

Xero aim to provide a complete MYOB/QuickBooks replacement. They're certainly well on their way to providing this although there are some rough edges. I was, for example, surprised to see that we tagged their emails to clients -- free advertising for them but it shrieks of Hotmail. To their credit they are looking at fixing this. The accounting side seems to be a little rough too, sure everything can be done by posting amounts around manually but remind me why we have computers again?

Xero have just reframed their pricing slightly but is still both expensive for small businesses at $50 a month ($600+GST a year for the math challenged), and probably too cheap for larger businesses as the same $50 a month. I'm struggling with the rationale behind this plan; either they don't want the micro-businesses (why not?) or they figure they have something compelling enough for these enterprises to spend more than they do today on accounting software/services.

The integration with local accountants is a clever strategy. The system is admittedly great for accountants that know it (and who will presumably recommend it because of this) as they can easily see the current state of their clients' businesses without leaving their desk. Less boring work for everyone is always good.

If Xero was cheaper then I'd take it by default as it is launching with the NZ-focus and NZ-bank integration. Yes I only care about i18n when it impacts me. Colour me selfish.

Freshbooks

Freshbooks looks like a direct competitor to Cashboard. I only recently discovered it (last week) but it has excellent i18n support and has been around a while . I feel these two things are related...

Freshbooks provides much the same estimating, invoicing and time-tracking capability as Cashboard. It can accept payments, using a wide variety of payment processors, but as far as I can see I'm limited to using Paypal as that's the only one I can get a non-US account from. I'm not asking my customers to use Paypal...

Freshbooks also give you a custom (.freshbooks.com) domain when you create your account. A nice touch and great for your customers should you provide them access, and Freshbooks also allow you to logo-ise this interface. Nice touch.

Freshbooks have an innovative option to send physical mail using an external provider. The cost and delivery time of this option for a non-North American business would appear to make this of little utility. Significantly they do not offer PDF, although you can format for printing (locally) or have them email your customers with an access link so they can see/ad

I really liked that your customers can comment on estimates and dispute invoices sent to them. I'm not so sure I like the focus on doing this all on-line, a number of our customers really need paper copies and I'd rather send them one and have it processed than have our automatic email lost/forgotten and not be paid since "we hadn't send an invoice".

Freshbooks does have a "free" option, eriely similar when compared to the equivalent Cashboard free plan but it appears to ramp up to become significantly more expensive at the high end.

Saasu

The Australians have arrived. It really looks like a traditional accounting package with a web interface. These guys have apparently been doing SaaS since before there was an acronym for what they were doing (1999!). Stability in your provider can only be a good thing...

Saasu NetAccounts is a fully featured accounting package, as a SaaS offering. They also have, listed separately but somehow part of the same system, NetInvoiceIt which is the invoicing only part. This seems to be placed as a bit of a teaser to compete with the other invoicing-only solutions above and also as an easy entry to the whole-of-business system they have.

Non-Australians are allowed to use this now although we are warned that NZ is only in Beta. While the NZ currency and stuff are there there are still an awful lot of country specific (and I mean Australian-specific) things in there too. At least they use G.S.T., but there are many exceptions and rates in Australia and these are reflected in the interface.

Two NZ banks are supported. The rest may be addable, I'll admit to not trying their BSB, but certainly were not in the dropdown lists. Still, two NZ banks are supported. This is far more encouraging than 0. No I'm not going to type Zero, or Xero.

I'm still trying to work out the pricing scheme. It's free unless you want to use it too much, although "too much" has some sort of point system based on the number of things you're doing. 5 invoices with payments, or 10 invoices by itself per month max based on my reading.

The sorta-flat-rate plan is A$228. It's not clear to me if it is a one-off payment or yearly (either way still cheaper than Xero). Ah, I see now (in the browser title); it is annual. Still, fairly good given the broad coverage. It would appear to my non-accountant eyes that this is a complete replacement for MYOB, but it is almost as ugly in places. Not much Web2.0 going on here.

Conclusion

None of these fit the bill at the moment. I was dead keen on Cashboard, and we may return to that if they can just redo all the date handing. They've only been live for 4 months so I'm being understanding.

In the meantime we're evolving our requirements for Latam Design. I think that the more we see of Xero and Saasu, the more we realise that perhaps we do need a little more than Estimates and Invoicing.

It is becoming clear to me that once you start using one SaaS provider then you may not be stuck (you can typically extract your data) but you, your users, and your customers will be slightly shaken if you have to start telling them to use the old system for the old invoices and the new one for new invoices. The retraining alone means that choosing a SaaS provider once is easy but changing mid-stream is much more complicated. The more you push the system out beyond the typical boundaries (e.g. to your accountant, to your customers) the more locked-in you get.

Comments and feedback are welcome, as of course are corrections and constructive debate :-)