Did Splunk Just Surrender on SaaS?

 

Today, it appears that Splunk has thrown in the towel on Software as a Service (SaaS) and replaced Splunk Storm with a hosted software model.  We were always skeptical that a company with such a phenomenally successful enterprise software business would disrupt its own business with a serious SaaS offering.  And with today’s announcement of Splunk Cloud now it seems that the doubts were justified.

Splunk Storm always seemed half-hearted with many features from the popular Splunk software product missing and marketing of the product always seeming to be at half-mast.  We heard reports that Splunk sales execs would often steer customers away from Storm for reasons including issues with scale.  And Storm was introduced so close to their IPO that you had to wonder if a part of its role was to mollify analysts who urged them to make a SaaS offering to defend their flank from companies like Loggly and others.

Now Splunk Cloud takes up the main role as the services offering while Storm is left as a “free entry level product” which I would take as code for dead-end with no new features planned.  The Cloud product is basically a hosted version of the Splunk Software which means that it does not compete with the mothership product.  In fact, it might well be more expensive.

And while that may sound the same as SaaS, it is not and never will be.  SaaS is disruptive to traditional software models for many reasons including:

  • Shared multitenancy enables a cost efficiency that no dedicated system can touch

  • Elasticity (up and down) is natural and easy whereas any dedicated hosted model will necessarily impose friction to such changes

  • Speed of feature evolution – SaaS products are typically built in an agile framework allowing new features to be continually deployed without customer disruption.
    For example: Since launching our Gen2 service on September 3, we’ve already had over a thousand new signups, along with two major releases with a number of new features.  One would expect Splunk Cloud to now follow the slower release cycles of Splunk Enterprise.

  • Self-serve marketing & sales keeps costs low and provides easy on-ramps at any level in an organization.

So our position as the most popular cloud-based log management service is strengthened and we’ll continue to lead the disruptive change focusing strictly on logging in a SaaS model.


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