SaaS a major imperative for service providers
09/06/2008
Posted by Simon Dadswell, Channel Marketing Manager, Endeavors Technologies.
Corporate computing has over the last few years arrived at a new dawn, whereby applications such as customer relationship management, human resources, accounting and desktop applications are increasingly being delivered on demand through a Software as a Service (SaaS) model. SaaS is a modern approach that exploits advancements in web and network technologies and enthusiasts believe it will condemn client/server as an expensive IT architecture.
Wikepedia define SaaS as “a model of software deployment where an application is hosted as a service provided to customers across the Internet. By eliminating the need to install and run the application on the customer's own computer, SaaS alleviates the customer's burden of software maintenance, ongoing operation, and support. Using SaaS also can reduce the up-front expense of software purchases, through less costly, on-demand pricing”.
The prospect of renting and centralizing or outsourcing the management of ubiquitous desktop applications - enabling users to access what they need, when they need it - has significant appeal for many CIOs faced with the need to optimize end user productivity and respond rapidly to new business demands. IT organizations find it increasingly problematic to manage layers of software residing on different machines whose users employ different ways of working to achieve similar things, culminating in a complex web of compatibility issues and IT management headaches.
Early approaches to making software rental available where made by application service providers (ASPs) in the 1990’s. Many service providers took an existing client-server application, created an HTML-front end and hosted it on a central server through third-parties. Performance issues where rife as ASPs adopted a non web-native approach and were unable to run software efficiently in large scale deployments. Many were also unable to offer the expertise to speed integration with client’s infrastructure and provide ongoing support.
However, today the range of SaaS architectures vary considerably, from; client/server and hosting arrangements providing access to a single instance of an application deployed on a central server with no configuration options, a single instance of the application on a server with configuration options but with no license management controls, or multiple application instances where customer data is kept separated through the virtualization of the application; to the next generation of deployments designed specifically to address on-demand requirements of SaaS where applications are managed centrally and streamed on demand to a PC client and deployed as if they where natively installed with full digital rights and license management controls.
So far, the SaaS market has been dominated by independent software vendors (ISVs), network service providers (NSPs) and hosting companies. It is expected that the evolution of network and hosting providers in particular will play a pivotal role in the SaaS industry moving forward. Whilst, many are undifferentiated carrier-operations and data centers, they clearly have the opportunity to move ‘up stack’ and develop complete managed SaaS offerings. For ISVs SaaS represents not just an opportunity, but also a threat. Software is migrating to the network and ISV’s are being forced to change the way they think about how to develop, market and support their core products and protect their revenue streams.
SaaS is also redefining the IT managed services sector as legacy service portfolios are restricted by expensive and perpetual subcontracting processes. SaaS promises a cheaper and more flexible alternative. For the customer, renting software applications over the Web allows them to draw a line under IT costs, optimize the use of internal IT resources, and simplify anti-piracy and license management. For the supplier, there are greater opportunities to innovate; extending to a ‘multi-tenant’ environment and creating new pricing and service level agreements based on a per-user basis, with additional fees for extra bandwidth and storage.
To sum up, as the adoption of ‘SaaS’ accelerates customers will demand the best access experience capable of enriching their work style and life style. Their priorities will shift from software functionality to service level criteria such as availability, security, scalability and network performance. As a result, service providers must ensure their technology is not an obstacle but instead is an enabler. To sustain their competitive position service providers must improve the speed, ease and security of application access for end users and develop more imaginative pricing, whilst reduce the cost, complexity and conflicts of automating the delivery of applications in an on-demand world.
Herein lies the opportunity and challenges.
