Software as a Service (SaaS) is also often called the "on-demand" market. And what a hot market it is! According to Bradd Whitt, an analyst at RBC Capital Markets,in a recent report the on-demand market had an average growth of 38% year over year as opposed to traditional licensed “on-premise” software solutions which only grew 8% year over year. Stocks of “on-demand” vendors were up 33% in 2005, while stocks of premise-based vendors were down 12% for the same year. Another analyst, Jason Maynard at the investment bank CSFB noted "It is no exaggeration to say that traditional software is already dead,"(from his report "On-Demand: The Tectonic Shift in Computing)."

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What does SaaS have to do with Microsoft Project? Well let's go back to 1996, when I first met Marc O'Brien currently CEO and co-founder of Projity. At that time he was running a company called WebProject which later got acquired by Novient in 2000. Before that he was the head of North American sales for Scitor (a mainframe-based project management software company). In 2004 Marc started Projity and the software has just recently come out of beta test.

The Project Guy

Marc has projects in his blood, and like the guys at Kazaa and Skype he wants to disintermediate Microsoft project. Projity is much like Zimbra who is using AJAX and open source to take on Microsoft Exchange. Although Projity is not open source is it following the SaaS model and hopes though a low price point (Project Managers are $40/mo and team members are $8/pp/mo, with 1 PM and 4 team members this averages to $14/pp/month) to disintermediate Microsoft Project through the access model (SaaS), ease of use and price.

Unlike MS Project, Projity runs on Unix, Linux, Windows and Mac platforms. Although Projity is not Open Source, it has an eye on that community and especially other tools that are taking on Microsoft (Zimbra and Open Office). Although Projity just announced production code and is now open to the
public, we expect some partner announcements in Q2 of this year which will show us more of their strategy and direction. They currently have 100 customers (most of them hold overs from the beta program), and look at growing their customer list quickly.

Questions, questions, questions

I recently interviewed Marc O'Brien and peppered him with questions:

CS: What about both internationalization and verticalization?

O'Brien: One of the founders of Projity is French so we have an office in Paris already (as well as the HQ in San Mateo, CA). Projity is available in French and Spanish and will be available in other languages based on partnerships and demand.

CS: What keeps you up at night?

O'Brien: I don't understand how NetSuite ($499/user/mo.) and Intact ($400/p user/mo.)can get away these days with prices like this. They are using old software pricing even though they are using a SaaS distribution model.

CS: What do you think about open source, do you think it can compete with Microsoft?

O'Brien: I have looked at a lot of the open source offerings and feel that most of them are not yet robust enough for the enterprise. However, there is more willingness by the enterprise to look at well supported and robust open source solutions, especially in the last year.

CS: Where is Projity going in 2006?

O'Brien: Communication and collaboration figure prominently into our plans for 2006. I know that is what you wanted to hear, given your focus on collaboration technologies.

CS: Yes, but it is also an area where Microsoft Project is weak.

O'Brien: Agreed. Today in Projity there is some collaborative function in that there is a calendar with tasks on it and team members can keep it updated. Maybe that is more of a communicative function? However I can't go into detail about our product roadmap.

CS: I would expect that Projity will add in some sort of real-time chat or IM for team members, do tighter integration with Outlook
and e-mail (read Zimbra) and possibly even CRM (read Sugar CRM or Salesforce.com).

O'Brien: We will also continue to work on our infrastructure to make it easy to use Projity. For example, we put a lot of work into the billing module for Projity.

CS: What about Microsoft Office 12 that is in Beta now?

O'Brien: I have looked at it and I believe that the release of Office 12 is an opportunity for Projity because users will have to deal with a new user interface (UI) so why not switch then anyway?

CS: I remember once telling you (several years ago) that "He who has the most connections wins" do you remember that?

O'Brien: I certainly do, and took it as great advice. Although your quote is a bit tongue-in-cheek, I believe it is based on the fact collaborative tools are valued based on their content and what data they can connect to. We take that value very seriously and you can expect to see an API from Projity soon as well as many ways to connect to many other types of data and content.

CS: Speaking of APIs, what do you think about mashups?

O'Brien: I have been tracking the revolution in web development
through mashups, so don't be surprised to see Projity offering an API in that environment. However, Projity does not have a free offering like Google and Yahoo and most of the other vendors that offer APIs for mashups currently. But you can try Projity (Project On DEMAND) for free for 15 days.

CS: So where do you see the Project Management and PPM market going?

O'Brien: I see a lot of change in the project management and PPM software market, and for us this is great, as it gives us opportunities that have not been present in many years in the software market.

Look for more from Projity in Q2.