SaaS fundamentals

By Martha Young  11 comments

Phew! 2008 is over. Finally. No point in looking back at the rubble that makes up the current mess. The goal for 2009 is to figure out how to make lemonade from these lemons and ensure company growth. Think business fundamentals and fiscal prudence. This is not to suggest returning to old ways of thinking, but instead to look at new and emerging technologies to see if they offer near term value. Software as a service (SaaS) is one such technology.

In this blog I will be addressing SaaS throughout 2009. I'll cover how to evaluate which applications to consider, how to implement, security and identity, pitfalls to using the cloud computing model and anything else you, the reader, tell me you want to know. That’s the key... you have to talk back to me. Make this interactive. Let me know what works and where I missed the boat.  Without further ado, let's get started.

SaaS is part of a much larger business modeling concept of cloud computing. It is not recommended a company go out and move the entire organization into the cloud, but there are large chunks of the firm where it makes fiscal sense to do so. The goal in 2009 is to rein in costs while growing the company. Here's how SaaS can help:

1. Controlling software licensing expenses. It is not unusual for a firm to have more licenses than they need for any given application. This is especially true as headcount is being reduced. By utilizing a software service provider licensing, patches, upgrades, and renewals are tightly monitored. A firm only pays for what it needs. Think if it as software elasticity.

2. Controlling rogue software installations. Using a software service provider allows the company to establish an approved applications list and keep it enforced. IT no longer has to support random applications specific to one or a handful of users. Streamlining application support improves efficiencies, expertise and keeps everyone working.

3. Reducing infrastructure expenses. Every desktop or laptop does not need to have the entire business suite of applications installed. Web-based application access allows companies to purchase only the amount of desktop horsepower needed for the job. For many roles, thin desktops and virtual operating systems are enough to get the job done.

4. Allowing for application testing. We have all been here. There is an application that looks like it might solve a real business problem. You buy it and it turns out to be a bust. What do you do with the 25 licenses? Eat it. That's the only option available. However, utilizing a software service provider opens the door to exploring new applications that might better suit your specific needs. Some vendors offer 30 day trials. You'll know within a week or two if the choice is right for you. In addition, the service provider has the expertise to tell you what will readily integrate with your existing software, an added bonus.

SaaS isn't the holy grail to all your business challenges, but implementing it in key areas will help to curb unnecessary expenses.

The next blog post will be on the role of security when using SaaS. I'll be talking with a few SaaS security experts and will provide you with some key considerations. Talk back and tell me what you think.

Happy New Year and best wishes for a strong recovery in 2009.

You can find me at:
http://www.linkedin.com/in/marthalyoung
http://twitter.com/myoung_vbiz

11 comments

    Anonymous 1 year ago
    nice post!
    Anonymous 2 years ago
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    Anonymous 3 years ago
    Execution without planning is foolheardy. But planning without execution is failure.Success doesn't start with a perfect plan...just a plan, followed by action, evaluation, and adjustments as necessary.Two of my favorite quotes come to mind when I think about SaaS and what it can do for all business, large or small. When a company is looking at trying to prosper in 2009, they better start thinking efficiency. Employees are going to have some accountability in how they spend there day. "Software as a Service" can make this all happen, without any spending, complete your free evaluation, set up your monthly payments it may not be "perfect" but it's a plan. Once you have your time management software in place you will now be able to track project time, billable time, or just day to day activities. Is all resources necessary, can I get more billable time from my resources? Now you will have the reports to justify your new 2009 economic strategy or at least an awareness. Trying to build this type of software in house always adds extra internal costs and the adoption for internal systems is almost zero. Look into project tracking, know what is going on. A great place to start is www.toptenreviews.com check out time management section. TopTens gold award winner was DOVICO Software, www.dovico.com, SaaS version selling at $9.75 per month. They do not put any roadblocks up when trying to purchase, no contracts, no setup fees. Their customer base is very extensive including players like MacAfee, Hilton Hotels, Sisters of Mercy. Executing an SaaS plan is an extremely easy, from there you can adjust as necessary.
    Anonymous 3 years ago
    While I agree that SaaS is part of a larger business model, it’s useful to briefly frame where SaaS has been, where it might go and what it means to existing ISV’s, the enterprise and the advancement of cloud services. Many of successful SaaS vendors to date have the following characteristics:1. New ventures designed specifically for SaaS;2. Point solutions developed for departments and small business; 3. Solutions operated, managed and delivered on a closed platform;The appeal to customers has been:1. No capital expense;2. Ease of use;3. Attractive pricing and flexible service terms; However, in order to provide these benefits, SaaS vendors have had to tightly manage their operational costs, so integration requirements have been kept to a minimum. This is one of the reasons that most SaaS vendors focused on point solutions that were not mission critical to the business. The current economic conditions have the potential to move SaaS beyond point solutions and blur the boundaries between on-premise and off-premise software. As traditional on-premise ISV’s consider providing SaaS offerings, many will quickly realize the significant investment required to operate and support SaaS. While, ISV’s are the content suppliers with expertise in software development and technical support, SaaS requires application delivery capabilities and end-user support expertise. So ISV’s will either need to make significant investments to develop and/or acquire the needed IT infrastructure, operations capabilities and end-user support, or create new alliances with partners that already have these required assets and skills. To their credit, Salesforce.com was one of the first to recognize this and created a SaaS platform service for ISV’s.This bifurcated model has the potential to create new innovation with respect to software delivery life-cycle processes, security, integration, provisioning and pricing. Some of the innovation will come from new SaaS platform vendors by leveraging virtualization and SOA technologies to obtain a competitive advantage. SaaS platform vendors understand they need to provide value added services in order to attract ISV’s. We may see SaaS platform vendors specialize in areas such as mission critical enterprise services and leverage SOA services, such as Enterprise Service Buses (ESB), and offer federated security services to make it easier to integrate with on-premise enterprise applications and other service platforms.Cloud services may also benefit from this distributed model because development and testing by ISV’s will create peek demands for infrastructure resources that need to be dynamically provisioned and scheduled for usage. This is the essentially a core competency of grid-computing, which is at the architectural foundation of cloud service vendors such as Amazon (EC2 & S3) and Google. Needless to say, traditional on-premise solutions will also leverage cloud services in a similar manner. The next wave of SaaS has the potential to significantly reduce IT costs, provide businesses with flexible service platforms and provide IT with the necessary confidence and experience to move mission-critical applications into the cloud.
    Martha Young
    Martha Young 3 years ago in reply to Anonymous
    Great feedback. Thank you for taking the time to be so thorough!
    ExecutiveBrief
    ExecutiveBrief 3 years ago
    While SaaS has been gaining popularity recently, it is noticeable that its popularity is limited to small and medium-size businesses. Larger enterprises are still rather reluctant to embrace hosted application for their IT needs.One of the top reasons why big businesses are reluctant to adopt SaaS is business continuity. Next to business continuity, data security, vendor lock-in, and accountability are some of the issues that clients — both large and small or medium-size businesses — raise most of the time. SaaS are typically fit-for-all, so customization is another nagging issue. And, the issue of interoperability and portability also comes up. We have considered these issues in detail here: www.executivebrief.com/blogs/the-pros-and-cons-of-saas-part-2www.executivebrief.com/blogs/the-pros-and-cons-of-saas-part-1
    Martha Young
    Martha Young 3 years ago in reply to ExecutiveBrief
    I appreciate the feedback, but do not agree with the content at ExecutiveBrief. In the many conversations I have had, firms of all sizes are taking advantage of the SaaS model. I will highlight a few of them over the course of the year to illustrate my point.That said, please continue to challenge the thinking here so everyone has a chance to learn from each other. Thank you!
    Anonymous 3 years ago in reply to ExecutiveBrief
    Great article! The benefits of SaaS are limitless but most importantly SaaS solutions are cost-effective.In response to ExecutiveBrief's comment, I don't agree. (I've read both of the linked blogposts...)I'm a representative for a SaaS vendor (Datastay) and all of the issues you've discussed about why big business hasn’t adopted SaaS solutions we've addressed and eliminated.Could the real reason why big business isn't quick to adopt SaaS is because there is a general sentiment that there is no viable solution available in the market that can address those issues?If anyone thinks the same way ExecutiveBrief does, check out http://www.datastay.com and get into contact with us, we'll tell you how we've addressed those issues, no pressure.
    Anonymous 3 years ago
    Hi Martha,I loved your article. As the Program Director for IDC's 2nd annual SaaS Summit on March 26th in NYC, I wanted to invite you to participate as a speaker at our event (which includes a comp pass). I wanted to see if you would be willing to moderate a panel discussion and recommend some end user panelists. We currently have a panel planned on the topic of Securing Standalone SaaS and SaaS in the Cloud but are open to suggestions if you have other topics that may be a better fit. This is a time sensitive invitation though as I am finalizing our brochure for our Jan. 12th deadline. I look forward to hearing back from you soon, answer any questions and hope we are able to work together on this event. Warm regards,Jess
    Martha Young
    Martha Young 3 years ago in reply to Anonymous
    Jess,The IDC SaaS conference sounds intriguing. Give me a call to discuss details.

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