The need of the hour for Google App Engine : Better adoption and more paying customers

September 15, 2011

As a developer who is betting on GAE (Google App Engine), the increase in hosting costs due to the recent price changes in GAE came as a surprise to me, as it was to many others too.

Developers who had optimized for the earlier pricing model which focused on CPU based pricing had to now deal with the new pricing model based on instance based pricing. Google realized (a little very late, in my opinion) that its old pricing model was flawed and instances which were alive but not consuming CPU (typically waiting on I/O) were costing more.

So Google had to change the model to match their actual costs, by moving to an instance-based pricing model, which by the way, is also how most other PAAS/IAAS service-providers charge.

As one of the Google developers details in the Google Groups..

..the price changes are a reflection of certain key facts:

a. Google as a company backing the entire platform as a product… instead of being cancelled, we’re coming out of preview mode and become an official product! Google is not a non-profit company and cannot continue to operate services at a loss. our products, and my paycheck’s gotta come from *some*where! coming out of preview means Google is committed to App Engine, and in turn, we’re committed to our users.

b. this service costs the company significant resources… premium services like App Engine and YouTube require a lot of hardware and networking bandwidth. We serve more than 1.5 *billion* pages views a day across all applications!

But Google did listen to the feedback from the GAE developers and addressed their concerns by increasing the free quota from 24 instance-hours/day to 28 instance-hours/day, while extending the 50% discount for instance hours up to Dec 01, 2011, when multi-threading support for Python is likely to be rolled in. This is because, thread-safe applications can serve more requests per instance, which currently is not possible for Python developers, while Java developers already have multi-threading support.

So, coming to the main issue, to remain a sustainable service, Google App Engine needs to have better adoption and more paying customers. Or in simple terms, Google App Engine needs to make money. For this, the developers betting on Google App Engine need to build apps which can solve business needs and be able to sell those apps easily.

There are 2 options available for developers to sell apps built on Google App Engine.

First option is to build the app as a multi-tenant application — segmenting data and restricting access to that segment of data based on the user who accesses the app, a little hard for those not used to multi-tenant apps, but doable — and to charge customers based on tiered-plans, the easiest approach being user-based plans. But this model of charging based on users is so very out-dated and in my personal opinion, a bit unfair too, because resource usage (and hence the costs incurred) need not directly be based on number of users accessing the app.

And the current pricing model changes in Google App Engine further complicates pricing for multi-tenant apps, as there is no way to allocate more computing instances to say, a premium customer or to restrict instances for customers in a basic plan. Even when apps start to meter requests, it is hard to allocate resources in a fair way,  especially when having to deal with instances and latency.

That brings us to the second option, which is for the apps to be installed directly into the customer’s Google App Engine account, for which the customer can purchase hosting resources directly from Google. This option is possible even now, but involves a lot of manual steps — which involves the customers to sign up for Google App Engine, create an application instance, invite the developer who then has to disable code downloads and then upload the code to that application instance — and hence is not very scale-able.

The second option needs to be automated so that any customer can visit a Marketplace for Google App Engine applications, read reviews about the apps and when they like an app, can just click on an “Install Now” button, to have the app automatically installed within their Google App Engine account. This marketplace can also be seamlessly integrated with Google Apps Marketplace, making it easy to install the app as a service directly into the Google App Engine account associated to Google Apps for their domain.

There can be a trial period for such an installed app, after which customers can make a payment ($9/month minimum + additional usage charges) so as to continue using the app, of which Google pays the developer a percentage.

This has now been filed as a feature request :
http://code.google.com/p/googleappengine/issues/detail?id=5821

Below is a quick list of past threads in the developer forums, which have been requesting for a Marketplace for Google App Engine apps, in one form or other..

Clarification of Term 4.4

How to distribute my app?

Questions about the preferred way to handle multiple apps/accounts

‘Add It Now’ Functionality for my own Google App Engine Application

Distributing the same app to multiple domains

Per-domain data stores and selling our apps to people who use google domains…

Is it possible to sell a CMS hosted on Google App Engine without the code being visible ?

Deployment API

Multiple Instances of the Same App

Selling App Engine Apps

Isolated Application Deployment Instances

Creating a Windows desktop deployment utility ie. port of appcfg.py to C# client library

Automating deployment

source code encryption

deploying applicaiton to multiple customers 

1 application, multiple datastores

usage & billing and multiple deployment
 
 
This is just a quick list. There should be more such requests. But it is obvious that this is an important feature which can enable better adoption rates of the Google App Engine, helping both the Google folks building this wonderful platform and the developers who love working on it.
 
If you have not already done so, you can star this feature request: Marketplace for Google App Engine apps, to let Google know that you are interested too.
 
While you can be sure that the custom online database application builder that I am working on will be available on such a marketplace, you can start using it today at http://creator.ifreetools.com.
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Why freemium pricing model for CRM / Online databases needs to change

October 13, 2010

The typical approach to pricing in the hosted web-apps space, particularly in the domain I am working on – which is CRM and Online-databases – is to have freemium plans with per-user pricing.

It is interesting to note that the average conversion rate in freemium apps is just 3%. That is, 3% of the users fund 97% of the other users who use the free versions.[1]

While there are a few service providers with seemingly generous “unlimited records”[2], I have seen web-apps offering generous free quotas to close shop/move away from this space, leaving their existing customers looking for alternatives and have also seen others reduce their quotas from something like 100,000 free records to just 1000 free records[3].

I believe such actions (leaving the market, or reducing quotas drastically) by service-providers, which can trigger strong reactions from users, are not something they would like doing. No one would like to piss-off their customers intentionally. The problem for these web-app service-providers is in trying to map the costs incurred – typically in terms of computing resources like CPU, bandwidth and storage, with the pricing model which is in terms of users and records. But to do this mapping is not an easy task, because it is not a simple function of the number of records and the number of users. Assuming a fixed set of users (pick any number between 2 to 5)..

Less records, less requests from users // least cost
Less records, more requests from users // moderate cost
More records, less requests from users // moderate cost
More records, more requests from users // highest cost

This is the simplest level. Next comes the number of write operations. This could be to add new records or to just keep updating existing records. So, for a given set of record limits and request limits…

Less read, less write operations // least cost
More read, less write operations // slightly higher cost
Less read, more write operations // considerably higher cost
More read, more write operations // highest cost

Trying to map it to a simple per-user, max-records based pricing is thus not an easy task. Just to be on the safer side, web-apps usually end up over-charging the least-cost users.

With iFreeTools CRM and Creator, we prefer to take a different approach, based on what really costs us money – the computing power, storage and bandwidth[4]. This means our free-version may not seem very much generous, but our paid-versions have substantially better value for money and also allow more user-accounts per application.

Also, our pricing plans are such that we don’t over-charge our paying customers to fund our free users. In a way, our free users pay for themselves – or so we believe – since our free plans our ad-supported. This enables us to provide generous quotas for our paid-users.

CPU based quotas are also planned to be incorporated, after which we plan to remove away the user-limits altogether and increase the record limits substantially. After all, it costs us just $0.15/GB/month (thank you Google App Engine).

Our pricing page is at http://crm.ifreetools.com/pricing

Do let us know what you think. You can also mail your thoughts to raj@sahasvat.com

Notes

[1] Freemium model – I am of the belief that freemium model works more favorably for vendors of installed-apps, where the only cost incurred for each freemium use was the download bandwidth. With hosted apps though, the computing resources for the free app users are to be provided by the service-provider, in the hope that they would turn into paid customers one day.

[2] “unlimited” quotas – I am really not sure how they can offer such a deal.. I guess they should have some limit which they do not say explicitly or their apps become unusable after some limit, that they know for sure it will not be a problem.

[3] reducing quotas from 100,000 to 1000 – of course, there was some backlash from existing user base, so they had to allow existing users remain with the old quotas, while restricting new ones.

[4] pricing based on costs incurred – Some may frown on the idea of pricing software based on the cost incurred, rather than on the value it brings to the business. Whether we like it or not, pricing of software tends to get lower and is most likely to reach a point where the software becomes just an add-on for the commodity platform services.


Online Wedding Planner now supports Importing of Contacts, Template based E-mails, RSVPs and more.

June 17, 2009

Online Wedding Planner now supports Importing of Contacts, Template based E-mails, RSVPs and more.

Started Tweeting : http://twitter.com/rraj

Recent Tweets :

(rubbing hands) Incoming email support & XMPP API in AppEngine expected anytime now (at most by, June 22) http://bit.ly/1a3u5F
1:59 AM Jun 15th from web

GOOG’s Girouard : g-Docs to get much better within 12 months; will be “night & day from what they are today” http://bit.ly/3T8eL
1:51 AM Jun 15th from web

RT: @metrocommute: Commuting options (buses/trains) for apartment you plan to buy? www.placetolive.in answers with help from MetroCommute.in
6:56 PM Jun 13th from TwitterFox

RT: @placetolive: XS Real: Bella Tuscany is iPhone “class”, but we understand functional phone markets, so: http://bit.ly/iOSOX #Real-Estate
6:31 PM Jun 13th from TwitterFox

Opera to make browsers into mini web-servers ?! Refer : http://www.opera.com/freedom and http://bit.ly/859Qe #opera
3:51 AM Jun 13th from web

facebook.com/rajkumar.radhakrishnan
6:02 PM Jun 12th from web

Driving Directions supported, try http://bit.ly/I7LXj
7:50 PM Jun 10th from web


On Moving to office at Vijayanagar, Recruitment and Launching of Online Wedding Planning Tool

May 12, 2009

Sahasvat now functions out of a (rather small) office at Flat No.4A, 1st Cross Street, Vijayanagar, Velachery.  And apart from just me, one more person has joined its operations.

In case you want to drop by at my office, I have given the location map below..

Location of Sahasvat

Location of Sahasvat

And recently, a Free Online Wedding Planner was added to MatrimonyPlanner.

There is this Tamil quote “வீட்டை கட்டி பார், கல்யாணம் பண்ணி பார்”, refering to the stress involved in building a home and in organizing a wedding. This is related to not just organizing the finances, but to the varied tasks involved in the process of building a home or in organizing wedding.  

While apartments and independent/semi-independent villas made available as part of residential projects by builders have almost removed the non-financial hassles in owning a home, organizing a wedding is still a huge task.

MatrimonyPlanner’s Online Wedding Planner is aimed to help stay better organized when planning a wedding. 

Sample Feature : Sticker-Paper-Printable, Address Lists to match invitation envelope design.

Generate Sticker-Paper-Printable Address Lists of Guests

Address Lists of Guests, printable on sticker-papers.

In case you have any friends/relatives who are getting married, this tool should sure help them out.  Check out the features and then, go ahead and gift them peace of mind.


Serviced Apartments, Sathyam Cinemas @ Arun Excello, CosmoCity and FAQs

March 12, 2009

Recent Posts in my other Blogs..

PlaceToStay.in : 

PlaceToLive.in :


Yet another exciting business opportunity

March 5, 2009
 
Zoho, a venture of my startup training center – AdventNet, has come up with a nice idea to use auto-rickshaws as mobile billboards . I had assumed that auto-rickshaws need to be in yellow and black ; since, if it were not, should not autos be carrying mobile billboards already.
Auto-rickshaw Mobile Billboard

Auto-rickshaw Mobile Billboard

 
My assumption was wrong. As mentioned by Naga in the comments of that blog post, the rule is limited to having yellow color for the metal body, while the cover does not have any such restrictions. Autos currently not carrying mobile billboards, is probably a problem of execution of the idea.
 
Ahhh !! Yet another exciting business opportunity… 

To handle auto-rickshaw marketing for corporates : 

  • Getting marketing content,
  • Streamlining the distribution to auto-rickshaws in different locations and
  • Ensuring that the ads keeps running on 3-wheels during the period of contract
…which I cannot take up at once. (sighhhh!!)
 
But, the idea seems interesting and may be there is good money to be made, by being a channel for corporates. May be, I can venture into this one too. 
  
Wait, is this not a common problem with Entrepreneurs ?!
  
Yup, it is a common problem..

Losing focus as an entrepreneur

Yesterday, I had dinner with an entrepreneur friend of mine. He had rejected a cozy, full time job offer to become a full time entrepreneur. The initial traction and he and his company seemed to be getting were pretty amazing. But after a short lived buzz, his company lost steam and the venture finally fizzled out.

Why ? What happened I asked.

“Blame my hyper enthusiasm”, he said. He went on to elaborate that even after launching his company, his mind kept brainstorming all these ideas which he felt had immense potential. After launching the company and getting all the buzz, I no more found the idea to be challenging. My mind kept brainstorming and bouncing off all these other great ideas out there. I started working on another idea as a side project. In between of all this mind-wavering, my focus unknowingly got shifted from the company I had launched. Losing my focus led to my lack of focus and ultimately the demise of my company.

Hmm… I came home from the dinner with a great, valuable, first-hand lesson – never to lose focus. It is very easy to get tempted by the next great idea, but you need to persist and keep your ultimate goal in perspective. Other startups will emerge and the thought will cross your mind – ‘Damn..why didnt I think of that idea before’. But in doing so, you are wavering from your chosen track. Your single handed focus should be to nurture your baby and help it grow.

http://www.startupdunia.com/entrepreneurship/losing-focus-as-an-entrepreneur-340

Well, the “auto-rickshaw mobile billboards” business probably needs another entrepreneur.
  
Interested 😉 ?

“Do you worry now for starting your startup ?”

December 23, 2008

How you tackle questions like ‘Do you worry now for starting your startup’? etc.

That was what Venkatramanan asked in a comment.

To answer that…

First, I never got asked that question.

Second, if asked, the answer is : “No, not at all !!”.

If I had waited for another month or so, the financial meltdown and its impact could have been far more visible and could have triggered a lot of suggestions to not quit a “secure” job.

But once the decision was made and I was out on my own, the only option was to go ahead and succeed.

Also, since I believe that I can easily meet my required income levels within a year, even by just targeting the Indian market alone, it was not very much of a risk worth worrying about.

Offering affordable software via the SaaS route and helping people save money spent on software, is a position of advantage, during this period of crisis.

Association management software is just the start. More exciting solutions will roll out.

The timing could not have been better.

Oops, too late already ; Need to catch the 7:20 am bus to SVCE, Sriperumbudur to attend the Ministry of MSME sponsored Business Skill Development Programme.

But, before I publish this post, here goes my ad..

Want to save money on software ?

Try out our Free HOA Management Software.