Here’s several excerpts from an article by Bert Latamore from ComputerWorld, Nine things you need to know about SAAS:
Software-as-a-service may have come into the enterprise through “the bathroom window,” but it’s definitely becoming part of the mainstream, says SAAS expert Mike West, vice president at Saugatuck Technology, a boutique management consulting and subscription research company focused on disruptive technologies.
Here are West’s answers to some basic questions about the SAAS market. IT and business users (and Internet service providers trying to evolve into SAAS providers) need to know the following information about this new and quickly evolving option for purchasing IT services:
1. What is SAAS?“Software as a service, sometimes known as on-demand software, is a new model for deploying business services … that requires the provider … to make access to the functionality available typically through a browser,” West says.
2. What about security?
“The security solutions offered by SAAS vendors are quite excellent,” West says, and the danger of corporate espionage is virtually nonexistent. In some cases, some SAAS providers can even keep critical data inside firewalls for those clients who may require it.
3. How do SAAS providers charge?
“Typically, users pay as they consume the service on a subscription basis,” West says. “Pricing per user per month is the most common model.4. What kinds of services do SAAS vendors provide, and how do they deliver those services?
Companies such as Salesforce.com Inc. (CRM), Concur Technologies Inc. (expense management), Taleo Corp. (human resources), NetSuite (SMB Suite), SAP AG’s Business ByDesign (a comprehensive suite of IT business services for small and midsize businesses) and RightNow Technologies Inc. (CRM) provide a wide variety of services spanning both end-user functionality and IT infrastructure, such as network security, e-mail and collaboration. The latest trend in service development is for SAAS vendors to provide entire sets of IT services — “everything a business could need” — on a unified platform, West says.5. Is SAAS mostly for SMEs, or does it have things to offer to large enterprises?
Recently, SAAS penetration in the small-to-midsize business (SME) market has been growing quickly, but penetration is happening in waves, West says. He estimates that the SAAS market may actually have greater penetration in large companies today, if one includes 2007 plans to implement SAAS solutions.
6. How mature are SAAS services?
SAAS vendors typically provide standard service-level agreements (SLA) and in general provide a high level of service. West says that “99.5 percent is the lowest standard in SAAS, and it sometimes goes higher, to three 9s or four. Very few data centres can really claim that.
7. How mature is the SAAS market?
The market is in its early high-growth phase, having passed the inflection point in the typical high-tech market scenario, West says. It’s characterised by large numbers of fairly small vendors, with more entering constantly. In this case, the growth in the number of providers is being aided by some very large organisations, including Microsoft Corp. and IBM, and some small middleware vendors such as Progress Software Corp., which are helping business partners, particularly independent software vendors, move into the market.
8. Is SAAS more than a flash in the pan?
“We believe it is the future of software, or one of the important elements in the future of software,” West says. “You can’t discount the traditional license model entirely, but certainly there is a strong argument economics wise that favours SAAS in the marketplace.”9. What, if any, involvement should service users have with the provider once the contract is signed?
“I think the user also should be very, very involved in the functional evolution of the SAAS offering,” West says. “In other words, the user should participate actively in the user community, in the user conferences, because the evolution of the software is driven more firmly than in any previous generation of software by the feedback from buying community.” In fact, some SAAS vendors have suggestion boxes built in to the user interfaces of their software.
Check out the complete source article for much more.
