btobsaas.com
Software As A Service For Business
A Blog About Software As A Service
This blog is all about software as a service (SaaS) for business. If it is in the cloud, you will find it here.
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Making a Case for SaaS: A Look At Costs
Posted on May 12th, 2009 No commentsJeff Hassemer, vice president, product management, of software provider Entiera has a post up on multichannelmerchant.com entitled "Making a Case for SaaS". The article details the ROI implications of Software as a Service:
SaaS applications have been in the market for quite a while now. Most online marketing software companies—those that provide functions such as e-mail, Web analytics, ad serving or behavioral targeting—operate in this model.
What this means is the vendor who developed the software also supplies the infrastructure to manage the software. The customer then pays a fee for its particular usage of the software. This is done either as a monthly commitment or possibly a variable cost based on volume.
Contrast that with a standard software license purchase. After an initial upfront fee and implementation fee, the customer also needs to:
- Purchase and set up a server to install the software (sometimes several)
- Buy any necessary ancillary software licenses (database system, operating system, middle ware, etc.)
- Pay ongoing support costs for the hardware (electricity, security systems, IT staff), plus an annual license and maintenance fee (a percentage of the list price of the software)
- Handle all system upgrades and ongoing maintenance
- In many cases, pay upgrade fees for new versions of the softwareAll of these costs can add up over time. One thing often overlooked in a traditional software purchase is the ongoing expense of upgrading the systems to support the core application itself.
Have a look at the article.
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Bloggista: 10 Reasons To Consider Using SaaS
Posted on May 12th, 2009 No commentsJust saw this excellent post at Bloggista, entitled 10 Reasons Why Companies Should Seriously Consider SaaS Software Now. The article goes through all the benefits of software as a service. Rather than ripping off the article, I encourage you to go check it out. A little preview:
Software as a Service, or SaaS is a model where software is rented instead of buying it. Applications are delivered via the internet, accessed using a pc with internet connection and a browser.
The model has been implemented for quite some time now, but its popularity was exponential lately when businesses started to look for better yet cheaper alternatives to traditional, often costly and hard to implement business softwares.
However, in my almost 3 years of actively advocating for SaaS and Open Source technologies, I found that many business owners are still not aware of this model.
The article then goes on to detail the 10 reasons why companies should take a look at SaaS. Tags: SaaS
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Gartner Revises SaaS Forecast
Posted on May 8th, 2009 No commentsOver at Daily IT News (a blog that really does a good job at covering SaaS and IT), there’s a post stating that Gartner has revised its 2009 forecast for global SaaS revenues. From the article:
Global revenues from software-as-a-service (SaaS) products will increase by 22 per cent this year, according to a leading technology analyst.
Revising its forecasts for the year, Gartner Research has predicted that applications delivered via a hosted server will generate sales worth $9.6 billion in 2009, compared to $6.6 billion last year.
Specifically, the market intelligence firm claimed that customer relationship management programs will account for $2.1 billion of this sum, while enterprise resource planning software will experience revenues of $1.3 billion.
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Article: SaaS gaining mindshare over license model
Posted on May 5th, 2009 No commentsJust saw this on ZDNet Asia by Victoria Ho. The article is entitled "SaaS gaining mindshare over license model", and it goes on to show that the adoption rate of SaaS is starting to heat up in the Asian-Pacific region. From the article:
"[Online distribution] has been growing well and reflects strong customer preference…it is widely accepted and considered an effective mode of interaction," he said.
Dickens added, however, that a different online distribution model, SaaS, is picking up in adoption rate due to its touted benefits such as lower total cost of ownership, quick deployment and lowered risk of implementation.
Different from software sold online, which is, downloaded or activated online but still installed on-premise, SaaS provides software accessible as a service over the Internet, with no installation of it on customers’ hardware.
Stable broadband connectivity in the region is also helping boost interest in SaaS for HP, he said.
And SaaS lifts the burden of managing customer licenses and delivering software maintenance from vendors’ shoulders too, said Dickens.
The article goes on to say that it is the "customer interest in SaaS’ "greater value proposition" that is pulling vendors to answering this demand." Additionally, widespread piracy of download-and-install software is making vendors make the move to the SaaS model.
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Oracle Making A SaaS Move
Posted on May 4th, 2009 No commentsJust caught a Reuters article titled “Oracle to Make SaaS Push” which details Oracle’s move toward expanding their line of SaaS offerings. An unnamed source at Oracle said that they’ll be expanding their HR and recruiting functions in a SaaS model. From the article:
The company is also expanding its line of customer relationship management software, or CRM programs, which companies use to manage sales and marketing activities, the person said.
Those CRM programs compete with ones from Salesforce.com Inc, the biggest provider of Web-based programs, which are known in the tech industry as software as a service or SaaS.
SaaS is becoming increasingly popular because their makers host the programs at their own data centers, saving customers the costs of running them on their own computers. The approach also makes it quicker and easier for companies to start using the new software.
Oracle has briefed some industry analysts on its plans to expand its SaaS offerings, though it is not clear when the products will be released, said the person who described the strategy.
So, while this really is a non-story since it was attributed to “a person, who was not authorized to publicly discuss the plan”, but since it’s Oracle, it’s a story.
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Where are you going to put all your data?
Posted on May 4th, 2009 No commentsJust ran my daily google and twitter search on SaaS and IT management terms and saw several people linking to the following story on datamation: Online Data Storage to Surge. Two analysts from Coughlin Associates and Objective Analysis say that the average home could have as much as 12 Terabytes of data by 2014. That raises the question: Where are you going to put it, and how are you going to back it up?
From the article:
All that content, though, has to be managed. The enterprise has all kinds of enterprise-scale storage, archiving, indexing and backup. There’s plenty of options for a Fortune 1000 company, such as refrigerator-sized storage systems from EMC.
For the home user? Not so much. There has been the advent of network attached storage (NAS) for home users and Microsoft does have its own consumer server, Windows Home Server.
For the most part, home backup is mostly low-tech, like dragging one folder to another hard disk on your own computer or a USB-attached hard drive. Coughlin said simplicity is needed because home users are not storage administrators, nor do they want to be.
“A commercial user may have more capabilities to do monitoring and management, and tagging and metadata. Home users don’t have the time or experience. It will become a crucial item for people with storage items,” he said.
SaaS seems to be the most interesting answer to me at least (note my bias by looking at the title of this blog!). I just don’t see the average home user spending time, money and energy setting up their own backup process. Why bother when they can back up their data remotely as a background process?
Sure, this is a site about B-to-B SaaS, but this article was something I had to highlight. When a report comes out showing that consumers of the future will have to rely on remote backups it just emphasizes the point that SaaS is here to stay. And with it, I think that IT departments will be starting to gradually accept the idea of SaaS for more aspects of IT management. But again, I admit it: I am biased.
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SaaS and IT Management with Divakar Jandhyala of eVapt
Posted on April 28th, 2009 No commentsJust found this video of Divakar Jandhyala of eVapt, on PodTech, in which Jandhyala talks about the other side of SaaS for IT Management: IT Management of SaaS. He talks about how IT departments are dealing with the adoption of SaaS solutions and what the IT department of the future will look like. Interesting stuff.
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SaaS For IT Management
Posted on April 28th, 2009 1 commentEver since I joined Aprigo in March of 2009 (ahem, last month), I’ve been developing our inbound marketing plan. With that, I’ve been doing a lot of keyword and topic research, and have been amazed at the amount of attention being paid to software as a service (SaaS) for IT management. Let me explain.
First, a little background on me.
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After graduating college, I went to work full-time as the marketing guy/webmaster/web developer at a high tech law firm in Boston. Though I was part of their IT department, I was really somewhat detached from the other IT folks. I was the web guy, so I really wasn’t part of ops. But it was an excellent experience, getting to work on the marketing side, the development side, and getting to understand the IT side all at the same time. I started a blog called lawfirmblogging.com, and really started to get into the social media and web marketing racket. The blog started to get a lot of attention, and I realized that’s what I really wanted to get into.
After 7 years, I was itching to join a startup. I joined matchmine in April of 2007 as their Web Community Evangelist. I’d moved to the B-to-C side of things and was working on promoting a company that was offering something for free. Again, awesome, awesome experience, and I learned a lot about building a user base, user acquisition, and inbound marketing. The company shut down in October of 2008.
After matchmine, I consulted for a few months until I joined Aprigo. So I’ve gone from a law firm to a B-to-C startup to a B-to-B SaaS company focused on IT Management. There. That’s my story in a nutshell. Onto the point.
</background>
Now that the mini-bio is out of the way, let’s get to the meat of this thing. The idea that SaaS tools focused on IT Management are all the rage. Now, don’t just take my word for it, let’s look at what the experts are saying:
In this article, Andrew Conry-Murray talks about the move toward SaaS-ifying (just made that sucker up) IT managment. From the piece:A subset of IT management startups are taking the SaaS or hybrid-SaaS route, which promises simpler deployment than traditional premises software. Companies such as Paglo, which is aimed at small businesses, and Service-now.com, which targets Global 2000 customers, use the SaaS model to provide a variety of IT management services.
A new report from Forrester forecasts the future of this market. (You can read a summary here.) At present, it says SaaS-based IT management accounts for a measly 1% of IT management software. But by 2013, the report anticipates SaaS vendors will have a modest 10% of the market.
While those numbers probably don’t have the Big Four (BMC (NYSE: BMC), IBM (NYSE: IBM) Tivoli,HP (NYSE: HPQ), and CA (NSDQ: CA)) trembling, another figure might: Forrester predicts that enterprises with 1,000 or more employees will account for 50% of SaaS installations in 2009.
These are really interesting figures to me, as the SaaS model makes a lot of sense for the mid-market to small(er) size IT departments…as much as the Global 2000 companies.Here’s an excerpt from the Forrester article cited in the InformationWeek story:How Big Is SaaS In IT Management Software?
by Peter O’Neill
with Stefan Ried, Ph.D., Reedwan IqbalSoftware-as-a-service (SaaS) is disrupting the IT management software market. Incumbent software vendors are setting up new business units and adding SaaS offerings to existing portfolios; managed service providers are repositioning their offerings to leverage the trend; and new pure-play SaaS operators are extending their success by taking advantage of product churn in various established vendors’ service and asset management customer bases. Forrester has developed a market forecast model for IT management SaaS that shows that SaaS will grow from making up just over 1% of the $18 billion IT management software market in 2008 to 10% by 2013, by which time many of the brand SaaS providers could be well established.Like I said, it’s just an excerpt. If you want to read the whole article, it’ll cost you $749.I may be biased, but the SaaS model just makes sense. If you’re at a gigantic company with the resources (both in personnel and finance) to constantly install, monitor and patch hardware and software that is supposed to manage your data (think about that for a second), then a SaaS solution might not make much sense to you. But if you’re at a company that is constantly putting out fires, has a small IT group managing a LOT of data, and don’t have the time or money to support new IT Management software, then I’d imagine the subscription-based SaaS model sounds pretty attractive.But again, I’m biased.
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The Argument Against Software As A Service: Sitepoint Article
Posted on April 3rd, 2009 No commentsThere’s an interesting article on Sitepoint.com called “The Argument Against Software As A Service“. Though the article mainly talks about the risk of using free SaaS solutions for business critical applications, they also touch on the fear that keeping all records in Salesforce.com is risky, as Salesforce.com could go under at any minute. Though I don’t really believe that, the article does underscore the fact that you should really explore the migration and export options of any SaaS before handing over business critical data.
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Beware The Hype for Software As A Service- Business Week Article
Posted on April 3rd, 2009 No commentsAs I’m just getting started with this blog, I’ve been doing some research into the coverage of software as a service in the majors, and found this article in Business Week from July of 2008. It’s called “Beware The Hype for Software As A Service” and it is by Gene Marks. In the piece, Marks immediately lets his opinion be known in the subheadline: “What’s called SaaS, or on-demand software, needs some debunking. For starters, it isn’t cheap, and your data aren’t secure.”
The article’s setup:
The biggest bucket of myths I hope to bust centers on a technology that many business owners are hearing a lot about these days. It’s known as Software as a Service (SaaS), or the idea that you can get your software delivered conveniently, and at a low price, via the Web. Unlike buying software the old-fashioned way, by paying a big licensing fee up front, you pay for SaaS—also referred to as on-demand software—in pieces, spread out over time.
But as with most IT innovation, there’s a lot of hype surrounding this technology—so much so that many of us don’t know what to believe. Is this a viable thing? Should we be using this stuff? Don’t worry, folks. I’ve done some research into this SaaS thing. Let me debunk a few myths.
Gene goes on to tackle the myths one by one.
Myth 1: SaaS is cheaper. No, it’s not. In fact, it can be a lot more expensive. Most service providers charge each user by the month. If you’ve got 10 people using a product, and they’re costing you 50 bucks a person each a month, that’s $6,000 a year. Most in-house systems have one-time licensing fees and optional support agreements. Spreading out the payments is nothing new, either; tons of software leasing companies will finance your purchase and spread out monthly payments over time. When you look at SaaS over the long term, it’s usually not a cheaper option.
Well, in my opinion, that depends. First, it depends on the type of software you’re talking about, how much it costs, and the support and upgrade costs involved. Let’s use a CRM for example. Let’s pretend you have a CRM that you have installed within your company’s network. Then compare that to a salesforce.com account that charges by the seat per month. It’s likely that the salesforce instance will be cheaper, and ontop of that, you don’t have to dedicate time, resources, or money towards upgrades, custom integration, etc. But again, that really depends. I’m sure there are instances where SaaS will cost more based solely on the pricing structure (per user/month rather than a one-time hit). But I don’t think you can categorically dismiss SaaS as a cheaper option.
Myth 2: SaaS reduces hardware investment. Well, this is only half right. Sure, the SaaS providers deal with the servers, and all the Windows headaches and patches and builds and versions and whatever. That’s their problem. But you still need fast access to the Internet. And that means workstations running versions of up-to-date operating systems, which generally means up-to-date computers. And they’ll need to be tied in, by wire or not, to hubs and routers to access the Net. And there will still be internal security and firewall issues. So you’re really not completely eliminating the IT guy. He’s like the smell from your cat’s litter box. It kind of never goes away.
I may be out of touch completely here, but I see fast access to the Internet as a given for most businesses today. While this point is not something to scoff at, I view internet access as a cost of doing business anyway, and not something new as a result of SaaS.
Myth 3: SaaS is quicker to set up. This is like Ikea saying its furniture is easy to assemble. One look at the lopsided bookcase in my den proves that little theory wrong. The same goes for software. Sure, if you’ve got a basic setup, then no problem: Just flick the switch and go. But what if your needs are more complex? What if you need customization? Snazzy reports? Integration with other systems? Now you’re adding complexity. And whether an application is sitting on a server in Taiwan or a server in your office, someone’s got to do the work.
I’m not sure about this one. I mean, I agree that there will always be a learning curve involved with setting up and customizing any piece of software. But the example myth here is that SaaS is “quicker” to set up than the alternative. So with that said, I’ll agree that there’s nothing inherent in software as a service that makes it faster to set up than installed software.
Myth 4: Your data are secure and backed up. Baloney. They’re about as secure as the personal data on 650,000 customers lost by GE Money (GE). Or that confidential Al Qaeda data left on a train by a British intelligence agent. Or Willie Randolph’s status as the Mets’ manager until about a month ago. I don’t care how many redundancies and data centers and encryption are baked into the system. Accessing your data over the Internet in 2008 is fraught with risk.
Interesting one here. I think I feel pretty secure about the backup side of this issue, but the security point is interesting. I don’t have the figures, but again, I think it all depends on the type of SaaS you’re talking about. This is probably the most valid point the article makes.
Myth 5: You’ve actually been using SaaS for years—look at your bank account. Right. And when my SaaS vendor is backed by the Federal Deposit Insurance Corp., maybe this story will hold. But in the meantime, what if I’ve got a billing dispute with you, and you decide to shut off my service? What if you send me my data on a CD, and I can’t even open the data because I don’t have your application? What if the government or some competitor subpoenas you for my information? What if the unthinkable happens and, gulp, my Internet connection goes down. Gasp. How do I get my work done? Yes, I realize that we’ve “hosted” our financial data with banks for many years before SaaS. But we’re talking a totally different set of rules, so let’s not even go there, girl.
Another good point, but one that can be alleviated by clear export and data rights contracts. First, unless the SaaS gives you export options that let you push your data to other applications, why would you sign the contract?
All in all, I think this is a really good article, as it shows the risks and fears associated with software as a service. While I don’t fully buy into the SaaS bashing completely, these are the kinds of issues that must be resolved by SaaS vendors.
