When not moonlighting at Chaotic Flow and Cloud Ave, I’ve been toiling away at Xignite for the better part of the last three years, and I’m happy to announce that the company has successfully closed $10 million in B round funding. The round was led by of Starvest Partners‘ Deborah Farrington who is #77 on the Forbes Midas List and was the lead VC for Netsuite, and John L. “Launny” Steffens, former vice chairman of Merrill Lynch. Previous investors Altos Ventures, Startup Capital Ventures and Peter Caswell, CEO of Netbase and former CEO of Advent Software, also participated.

While most of the public Silicon Valley buzz in recent years has gone to B2C startups like Facebook, Twitter, Zynga, and the like, I believe we’re at the beginning of a B2B renaissance led by a prominent list of rapidly growing cloud plays like Xignite. B2C startups tend to happen very fast or not at all, and consumers will often forgive their growing pains, even if they’re posting the fail whale on a daily basis. Not so in B2B. B2B startups spend their A rounds very carefully to make sure their offerings are rock solid before they scale. When I joined back in 2008, Xignite had about 150 clients. Today it has more than 900 customers in 47 countries.

The Financial Market Data Cloud

Market data is the life blood of the financial markets and is essential to every financial technology from algorithmic trading to iPad portfolio apps. Unfortunately, every year the financial markets create more of it. A lot more. In fact, the amount of data spewed off by financial markets has increased 10,000% in just the last 5 years. Plus, redistributing that data globally is getting harder with the increasing number of applications, particularly mobile apps. Xignite relieves that burden by pushing all that big data and associated infrastructure to to the cloud. The Xignite market data cloud platform transforms financial market data infrastructure into a utility just like electricity, allowing companies to build financial applications on top of enterprise-class cloud APIs. No fail whale allowed!!

Democratization of Financial Market Data

Before the cloud, only the largest firms could afford enterprise-class applications. Today, anyone can sign up for Salesforce.com and get the same application used by Dell, Prudential Financial and Sprint. Just as SaaS democratizes access to applications, the Xignite platform democratizes access to financial market data. This isn’t just great for the little guys. Big banks, hedge funds and money managers can significantly lower their costs by eliminating on-premise infrastructure. Exchanges and trading venues that put their market data onto the Xignite private-label cloud platform, such as NASDAQ OMX and CME Group, achieve immediate, global distribution through new online channels and superior market transparency as demanded by many of the new regulations resulting from the recent financial crisis.

The funding will be invested in sales and marketing to continue Xignite’s strong growth trajectory and to accelerate the addition of more data and more private label partners onto the Xignite platform. In particular, the company will be opening offices in New York City and Chicago and will be significantly expanding it’s Silicon Valley and China operations. So, Xignite is hiring!!

Recent weeks have brought a bewildering number of competing claims around SaaS and cloud computing. On one hand we are debating whether the SaaS experiment is over, IaaS is just an incremental advance in hosting technology, and the cloud is just hype. While on the other, Gartner estimates SaaS is now 10% of the enterprise market, Amazon AWS is a $500 million dollar business and Jim Cramer is picking his favorite cloud stocks. What’s a person to think? I for one think that recent reports of the cloud’s death are greatly exaggerated, and here is why…

The Cloud is Real. The Cloud is BIG.

It’s absolutely true to say that the cloud is simply the next evolution in computing, but saying it is an incremental change and isn’t all that different from traditional hosting or time sharing is like comparing the Internet to a T1 line. There are lot’s of new technologies and standards, big and small, that go into the cloud. And, there will continue to be others added as it matures. But, you shouldn’t allow the technology to cloud your thinking. The cloud, the REAL cloud, is about bringing any and all of the computing resources available on the Internet together to create Inter-networked applications and computing infrastructures. Consumer mash-ups perhaps being the simplest and earliest of these, but it isn’t that hard to imagine much bigger iron, mission-critical business applications running the same way. Most Internet innovation to date has focused on users and content, and has been strangled by a lack of bandwidth and integration standards. As these constraints erode, the cloud will continue to emerge. The cloud is about the machines. It is as big as all the computers connected to the Internet.

The Cloud is Hard

Security is and will remain the most difficult problem of SaaS and cloud computing, with reliability following close behind. But, this is more a matter of proliferating standards and best practice than technology. The problems are completely tractable. In the end, public standards and SLAs backed by SaaS, PaaS, and IaaS professionals working in their own areas of expertise will ultimately outperform all but the largest and most sophisticated internal IT departments. Most companies hire security firms to handle their physical security, why would they do any different with their IT infrastructure? Specialists do it better.

Cloud Adoption will be Gradual and Inexorable

The cloud is fundamentally an enterprise phenomenon, because it is about building applications and infrastructure. This is the business of businesses. And, like all things enterprise you can be sure of two growth characteristics. One, it will happen cautiously, slowly and gradually. Two, it will follow the money. The economics of the cloud are as simple as commodification, specialization and scale. Each year, more applications and infrastructure that have historically been hand-crafted on-premise by generalist IT departments becomes available online as specialized commodities. The movement from centralized generalist application deployment to distributed specialist application delivery is made possible by the Internet, and will continue to gain momentum as bandwidth and standards allow more sophisticated applications, data and computing power to be delivered over the public networks.

Cloud Fatigue is Unavoidable

So here we are. The cloud is real, the cloud is big, but the cloud is slooooowww. Salesforce.com has been preaching “no software” since 2000, and has taken a decade to build a billion dollar business, while consumer apps like FaceBook reach 500 million users in just a few years. It’s no wonder we’re tired of waiting already. All we are really seeing is that the cloud excitement is outstripping the pace of cloud adoption. And, this is likely to remain the case for the decade to come.

I’ll say it again: SaaS is NOT cloud computing. As the industry rushes to embrace cloud computing, too many SaaS experts and vendors are simply updating their marketing messages with cloud buzzwords. This is not enough.

When I started this blog, the biggest challenge faced by SaaS vendors was getting our heads around the new lightweight paradigm for marketing and selling an on-demand Web application versus the heavy-handed direct sales approach of traditional enterprise software.

Today, a new challenge is arising. However, this time the threat comes not from the past, but from the future. Just as SaaS vendors have found their Internet footing, cloud computing is destabilizing the very ground beneath our feet. Depending on your SaaS business, cloud computing could impact everything from application architecture to channel strategy. Or, it may not affect you at all. Either way you should know. What is your cloud computing IQ?

The Cloud is the Computer

John Gage’s prophetic remark “The Network is the Computer” beautifully highlights the difference between SaaS and cloud computing. While SaaS applications provide on-demand services to millions of users across the Internet, cloud applications provide on-demand services to millions of other applications across the Internet. The network really is the computer.

Why should this matter to SaaS experts and vendors? Two reasons. First, because most SaaS applications today exist as silos that only solve a piece of a customer’s puzzle. Second, because cloud computing enables new economies of scale through shared infrastructure that properly designed SaaS applications can leverage to further drive down total cost of service.

SaaS Model Economics 101 states that SaaS competitive advantage comes in two Internet-enabled flavors: network-based differentiation and lower cost from economies of scale. Cloud computing creates new opportunities for SaaS vendors to extend their competitive advantage by opening their applications to the cloud through Web services and further driving down costs by running on shared cloud infrastructure.

SaaS Silos vs. Cloud Platforms

SaaS Do #9 – Open Up to The Cloud encourages SaaS vendors to reach out to complementary applications on the Web through open, standards-based APIs. But opening up to the cloud is not just about easy integration. Comprehensive Web service access will transform your SaaS application into a cloud computing platform. Virtually everyone today knows about Facebook. But, what not everyone in the SaaS community knows is that the fundamental reason Facebook kicked the crap out of Myspace and all the other wannabees vying for social network dominance was the introduction of the Facebook platform that allowed independent developers to create Facebook applications. Platform-as-a-service (Paas) opportunities are not limited to pure play PaaS companies making cloud development and deployment toolkits, PaaS opportunities are open to every SaaS vendor that thinks beyond the browser and is willing to expand its definition of “user” to include not only people, but other applications as well.

Have SaaS, Will Travel

It’s hard to believe, but we already have a “traditional model” for SaaS application architecture based on database multi-tenancy and a vertically integrated delivery infrastructure. This architectural model is the foundation of the SaaS cost advantage. However, it originated in a pre-cloud computing world based on the pre-cloud computing assumption that the SaaS application would run on a static host infrastructure.

To fully realize the cost advantages available on the Internet, the next generation of SaaS applications will not only be multi-tenant, but will be multiple tenants in their own right on shared cloud infrastructure. Monolithlic, vertically integrated SaaS applications will be broken up into loosely coupled, multi-layered Web service components that can be dynamically deployed to multiple cloud platforms in order to meet production requirements. This trend is so visible to the VC community, that the folks at Bessemer promoted it to the #1 spot of their recently revised 10 Laws of Cloud Computing and SaaS.

Blooming Channels

The inadequate grasp of cloud computing in the SaaS community was highlighted for me by some of the reactions of my fellow SaaS evangelists to this recent post of the emerging PaaS channel opportunity. As if the emergence of the PaaS channel somehow devalues the “pure” SaaS channel. This is not the case. There are fewer “pure” SaaS channel partners simply because SaaS vendors are doing a good job of making their applications easy for people to deploy and use. This is a good thing!

The fact that there are fewer “pure” SaaS channel partners does not in any way discount their value. SaaS channel partners have naturally gravitated to very high value services such as business strategy, process design, requirements definition, vendor selection, and training. However, from the SaaS vendor’s perspective these types of channel partners are gatekeepers. They don’t move product. And, anyone who has spent any amount of time in consulting will tell you that while a strategy project may net you $100K in services revenue, a development project can net you $1M. So, I’ll say it again. Cloud channels will follow the money.

This is not to say that we’re going back in time with the PaaS channel reliving the custom development glory days of enterprise software VARs. PaaS channel partners will be leading the charge into a new paradigm of cloud-based application development, sewing SaaS applications and Web services together into flexible mash-up cloud applications and application suites that are dynamically deployed across the Internet. The retooling required of traditional software VARs to deliver these services is no less daunting than the shift required of enterprise software companies to deliver SaaS. (How long did it take SAP and Oracle to get with the program?)

SaaS vendors with high cloud computing IQs recognize the cloud as the new channel. They will transform their applications into cloud computing platforms and will see their PaaS channel opportunities bloom. Whereas today’s “pure” SaaS channel opportunities are largely limited to marketing referrals from trusted advisers and affiliates, tomorrows PaaS channel partners will redistribute SaaS applications over the cloud as components, complements and containers of other applications. They will extend both the market reach and product capabilities of SaaS vendors that embrace PaaS the same way they have already done this for Salesforce, Facebook, Google and Twitter. The network is the channel.

SaaS channel partners have definitely received the short end of the stick compared to their software channel counterparts. With a few notable exceptions like Salesforce.com, Netsuite (and largest, but least recognized as SaaS, Google AdWords) there simply have not been enough customers or enough work to engender a thriving ecosystem of SaaS channel partners, at least not when compared to the sprawling extent of enterprise software channels. I think this is about to change.

Channels Always Follow the Money

There is one universal law that governs all channel management: CHANNEL PARTNERS MUST MAKE MONEY. The biggest channel mistake made by many a SaaS start-up CEO is to fall into the fantasy that SaaS channel partners are there to help your business. They are not. They are there to help themselves. And, how much money they can make boils down to a very simple formula.

SaaS channel money = SaaS channel value-add x SaaS application customers

And right here is the rub. The self-serviceability of many SaaS applications from customer acquisition through deployment significantly reduces the value-add for SaaS channel partners. In fact, if all SaaS vendors embraced SaaS Top Ten Do #3 – Accelerate Organic Growth, then the SaaS channel situation might be even more dire. Moreover, the number of SaaS applications with enough customers to drive SaaS channel development can be counted on your fingers and toes.

Unfinished Business is the Business of Channels

The work required to realize the benefit of your product is the same whether you do it, your customer does it, or a channel partner does it. Channel partners add value by finishing the unfinished work that you and your customer start, but for business reasons can’t complete. They simplify and speed adoption by shouldering tasks that they can do better, cheaper and faster. The greater the gap between your service and your customers’ ultimate needs, the greater the value delivered by the SaaS channel partner and the greater the SaaS channel opportunity.

SaaS Total Cost of Service – Visualizing the SaaS Channel Slice of the Pie

I like to visualize this as the cloud channel partner’s contribution to total cost of service (TCS), because the success of your cloud channel strategy will always hinge on a) your cloud channel partners’ ability to make money and b) your customers ability to realize value that exceeds total cost of service, including the money made by your cloud channel partner.

Developing in the Cloud: The Emerging PaaS Channel Opportunity

The problem with SaaS channels to date is that there simply has not been enough for them to do. I think this is about to change, but I also think it will happen one layer down in the cloud technology stack. If you examine the raison d’etre for the vast array of enterprise software channels it comes down to the fact that enterprise software is delivered in an unfinished state, leaving plenty for enterprise software channel partners to do and lots of it requiring very specialized technical knowledge with which customers simply don’t want to bother.

These attributes are also present in the emerging platform-as-a-service space (PaaS). Whether it is building, deploying and managing a new application on Amazon AWS or simply extending and integrating existing SaaS applications using the ever expanding pool of Web services APIs, the number of opportunities for pure cloud-based development is increasing and is sure to grow to a scale that rivals enterprise software. Unlike SaaS applications that are designed with the business user in mind, PaaS and IaaS offerings are designed for developers. They are by their very nature brimming with potential value, unfinished and highly technical–making them ripe for channels.

Whereas SaaS providers have struggled to develop the interest of potential SaaS channel partners, IaaS, PaaS, and PaaS tool vendors are likely to find their businesses increasingly dependent on cloud channel partners focused on pure-cloud application development and deployment. Moreover, you can expect these cloud channels to spark a proliferation of home-grown development, deployment and monitoring tools that will ignite and accelerate the already hot PaaS tools sector as cloud channel partners product-ize their home-grown systems and take them to market.

So, if you are an enterprise software channel partner and have been scratching your head for the last few years trying to figure out how to jump on the cloud channel bandwagon, then think PaaS channel not SaaS channel. And, get started already or you may miss the boat.

SaaS Do #8 Enable Mass Customization is a core principle for building SaaS applications. Salesforce.com, for example, has taken it to new heights with offerings such as the Force.com platform. However, do SaaS-based development platforms such as Force.com represent a fundamental shift in application development, or are they simply the SaaS equivalent of Microsoft Visual Basic for Access? How do they stack up against cloud computing platforms like Amazon Web services? This post examines the potential for competitive advantage through mass customization in cloud computing vs. SaaS.

The short answer is this…
Mass customization in cloud computing is more natural, more flexible, and offers more potential for competitive advantage than in the wildest dreams of SaaS, because cloud computing is built on Web services that are a) inherently abstracted, b) independent components and c) accessible at every layer of the technology stack.

Note: In a previous post, I claimed that the salient difference between SaaS and cloud computing is that SaaS has largely been about Internet applications used by people, whereas cloud computing is about Internet application components used by other computers. More succinctly, Websites vs. Web Services. Although everyone seems to have their own definition of all the cloud buzzwords, I’m going to be rather specific and equate them as such: Cloud = Internet, SaaS = Websites for human users, Cloud Computing = Web services for computer users. My intent is not to debate or define the industry terminology, but simply to keep track of what the heck I’m talking about here at Chaotic Flow.

The Role of Meta-data in Mass Customization
Mass customization in SaaS is achieved by converting hard-coded application functions into meta data configuration settings.  For example, multi-tenancy converts hard-coded deployments of multiple customer databases into a single database infrastructure where each customer deployment is identified by a unique customer ID. All the technical miracles that distinguish one customer’s data from another customer’s data are abstracted to this single piece of meta-data to enable data-driven functionality like Customer[1].Name = “Company X” and “Customer[2].Name = Company Y”. Voila!  Mass customization = meta data abstraction of functional capability.

More Natural – The Inherent Abstraction of Web Services
Mass customization is more natural to cloud computing vs. SaaS for one simple reason: meta-data abstraction is inherent to Web services, but it is optional for websites. SaaS applications must be carefully architected to enable mass customization at all, i.e., it is a matter of good SaaS application design discipline to employ a multi-tenant database, configurable security settings, customizable page views, etc. In contrast, every function of a Web service is inherently abstracted to meta-data in the XML inputs and outputs of the API.

The Xignite stock quote Web service can return a wide variety of information
such as the current stock price, an intraday stock chart, and financial news
that varies by the stock symbol (meta-data) supplied to it.

For example, given a particular stock symbol (meta data), the stock quote Web service above can return a wide variety of information about a company such as the current stock price, an intraday stock chart, and financial news. Let’s say Company X above is a manufacturer that uses this Web service to create a website with detailed, current financial information about the company for potential investors. Now let’s say Company Y is a Web publisher that uses this Web service to create a widget that provides in-line stock quotes for companies discussed in its news stories. Here we have two completely different applications built from a single Web service. Imagine trying to architect this degree of mass customization into an end user SaaS application, i.e., a single Web application that can present anything from a detailed company financial profile Web page to a single stock quote widget simply by changing application configuration settings. Sounds like iGoogle to me. Not easy.

More Flexible – Independent Components vs. Monolithic Applications
The stock quote example above also demonstrates the flexibility of enabling mass customization through independent components over that of a monolithic application. Changing a single feature from hard-coded to configurable in a SaaS application can require modification and refactoring at every layer of the software stack from the database structure to the user interface, e.g., adding user-defined custom fields. Moreover, the introduction of  new configuration settings can have a multitude of known and unknown impacts on existing and seemingly unrelated features, e.g., changing an address format from a standard US postal structure to a configurable structure that better supports international clients. The result is that even the simplest modifications to a SaaS application must be carefully considered and become more difficult the more complex the application.

Web services are relatively independent, loosely coupled components. New functions can be added to current Web services, and entirely new Web services introduced with minimal impact on other Web services. For example, I use Google’s chart Web service to generate the charts on the SaaS Model Scorecard. If Google wants to add new chart types to this Web service, it simply creates new values for the “cht” parameter and any other relevant options. However, a SaaS charting application would require changes to the UI to select the new chart type, select the new chart type options, visually edit the new chart type and display examples of the new chart type. Depending on the architecture of the application, this could be a modest change or a monumental change.

Moreover, independence allows customers to assemble solutions from best-of-breed components more easily. The stock quote web service above supplies the data and charts, but the UI can be constructed using the customer’s tool of choice, including any SaaS application that supports Web services. Application integration across functional silos has proven to be a consistent challenge for SaaS companies. Most have turned to open APIs, i.e., Web services to address this challenge. The more a SaaS application opens itself through Web services, the more it acquires the flexibility for mass customization available to native cloud computing solutions. Pushed to the limit, it can become difficult to tell the website from the Web service.

Wildest Dreams – Morphing Applications and Infrastructure, not Just Features
Imagine building a SaaS application that could magically morph from CRM to ERP through configuration settings. The complexity of building such an application is staggering, not to mention the subsequent configuration. Again the Force.com platform comes to mind. Now consider cloud computing. Let’s say I store the respective CRM and ERP application executables on Amazon S3. And, I create a Web service with two calls: gimme CRM and gimme ERP. When I log in, I select ERP or CRM. This Web service automatically downloads the specified application and instantiates it on a farm of Amazon EC2 virtual server instances, where it can be accessed from the URL www.elastic_crm_or_erp.com. This neat trick is possible, because Web services allow mass customization at every layer of the software stack. In this particular case, the configuration reached down below the application layer itself to the O/S and swapped out the entire application. From the user point of view, I just magically see my website change from ERP to CRM.  This approach is really overkill for this simple example, but it makes clear the ability of cloud computing to handle meta data driven, ad-hoc modification at any layer in the technology stack.  It could just as well be accomplished at a much higher level in the stack using two SaaS applications and a single sign-on…uh, Web service.

Mass Customization and Competitive Advantage in Cloud Computing
Although cloud computing offers greater potential for mass customization than SaaS, cloud computing does not really compete with SaaS. Amazon AWS and Force.com are unlikely competitiors, because they segment the market into the high-end and low-end of mass customization respectively, and customers will choose one or the other according to their requirements.

Like SaaS, cloud computing competes against on-premise software, offering many of the same benefits such as lower TCO and mass customization. But unlike SaaS, cloud computing does not compete head-to-head for a final end-user applications. It competes for components at every layer of the technology stack from storage to user interface. As a result, the competition centers around architecture as much as outsourcing. While SaaS adoption is usually driven by functional executives, cloud computing adoption is driven by IT executives. Adopters of cloud computing must rethink how they build applications, employing interchangeable components that may or may not exist within their own firewall. In order to overcome this barrier, cloud computing vendors should leverage mass customization to offer their customers orders of magnitude improvements in functional versatility, deployment flexibility and infrastructure elasticity in addition to lower TCO.

It seems that everyone is jumping on the cloud bandwagon.  Cloud this, cloud that, everything cloud.  Salesforce.com has all but rebranded its entire business as cloud.  Instead of sales force automation, we now have “Sales Cloud 2” (and “Service Cloud” and “Custom Cloud” and “Collaboration Cloud” with nice little TM’s attached, so if you were thinking of using them for yourself, you can forget it!).  I suppose it might be a good thing.  Personally, I was getting pretty tired of Salesforce.com trying to “force” this brand, “force” that brand on me.  I really don’t have a problem with the cloud buzz per se.  I think it is good for the industry, because it creates excitement, momentum and funding for B2B Internet companies.  But, I am concerned that all this unbridled rebranding and repositioning is obscuring the underlying technological and economic shifts which characterize this next stage of Internet evolution.

Cover from the Pink Floyd album Obscured by Clouds.
Not really relevant, but I needed a picture.
Retweet if you’re a Pink Floyd fan!

The Web 1.0 Internet revolution, of which classic software-as-a-service is a part, arose as a result of the universal interface offered by the Web browser.  Suddenly, anyone could access any global computing resource over the Internet as long as they had this one, standard client application.  It didn’t really matter what happened on the back end, because everyone was plugging into the same application on the front end.  I like to think of this as application – user interoperability.  The economic implication of this paradigm shift was that you could now aggregate customers around the globe onto a single Internet application.  Say for example, ordering books or sales force automation.

The shift we are seeing now is driven by increased interoperability on the server side, or rather application – application interoperability.  And, because it is on the back end, it is occurring at every layer of the software stack from the virtual machines of cloud computing to the really simple syndication (RSS) of personal blogs.  Not only have underlying Web service standards like XML, SOAP and JSON gained broad acceptance, but general openness, public APIs, and application development frameworks are becoming the cultural norm for Internet applications.

Let’s be clear on the magnitude of this technology shift.  The current Web 2.0 boom, call it the social Internet revolution, is realistically 95% new product ingenuity and 5% new technology.  A little AJAX, a little RSS, and voila!  Facebook.  Twitter.  The application-application interoperability of the cloud is a fundamental technology shift that has the potential to unleash the same kinds of disruptive economies-of-scale and disintermediation of legacy business models by aggregating computing resources in the same fashion that Web 1.0 did by aggregating users.  But, this time the war won’t be fought at the user level between brick-and-mortar businesses and Web businesses.  It will be fought at the application level between traditional closed, proprietary on-premise software and open, standards-based cloud offerings.

For example, this is the essential value proposition of Xignite.  Xignite supplies on-demand market data via Web services.  As Salesforce.com “Sales Cloud 2” is to Oracle-Siebel, Xignite is to legacy data feed application vendors like Thomson-Reuters and Bloomberg.  But, instead of serving a multitude of users from a single application infrastructure to create economies of scale and reduce TCO, Xignite creates new economies of scale and reduces TCO by servicing a multitude of applications, such as WorlframAlpha, NetSuite, Forbes.com, corporate financial apps at GE and iPhone apps at startups like Palantir.

For me, this giant leap forward in application-application interoperability is the essence of this revolution we call The Cloud.   The rest is window dressing.

After spending the last couple of years consulting around the SaaS and Web 2.0 worlds, I’ve decided to take the startup plunge again and settle down in the clouds. I recently joined Xignite, a cutting edge on-demand cloud services and mashup platform provider that helps companies incorporate accurate, current financial information directly into websites and applications via Web services, i.e., no integration programming required! The company is off-the-charts on the SaaS Success Top Ten Dos and Don’ts as evidenced by everything from the potential market (market data is a multi-billion dollar industry already…based on really old legacy stuff) to the e-commerce Web site to mass customization via the Splice on-demand mashup platform. Plus, the team is great from the sales reps to the board and the culture is pure software-as-a-service.

Xignite has a classic SaaS vs. legacy software value proposition
(on-demand web services vs. data feeds and custom code)

We have an Xignite company blog at xignite.web-services-blog.com, so my loyal readers can rest assured that opinions expressed here at Chaotic Flow will remain as objective as ever, but they may start taking a bit of a bent toward the emergence of cloud services…which differ from application-oriented SaaS in some distinct ways that directly impact the economic and business model dynamics–not the least of which is that they are used by computers instead of human beings.  However, the primary value proposition at Xignite remains classic SaaS vs. Software, or in financial services industry-speak financial web services vs. market data feeds.