To SaaS or not
If SaaS (Software as a Service) sounds like a market rife with hype and confusion, that’s because it is. My recommendation is to become more versed in the platform and understand the players and their unique value-proposition. Remember that CIO’s generally do not broadcast their problems and SaaS is another tool in the toolbox.
In a previous role as Manager of Operations for an on-premise ISV, I adopted SaaS based email hosting for the entire company (60 staff). It is a decision I would make again. In 2001, I was an early adopter of SaaS based email hosting (wasn’t even called SaaS). The only missing must-have feature (then) was a global address book, which we developed a work-around for.
So your company acknowledges they are not a leader in technology adoption, that’s fine. However, your company should not crawl in a hole and avoid SaaS, electing to wait for a fully matured platform. The analogy is waiting until today’s Windows Server+Exchange platform “matures” prior to migrating from Profs, mini computers and green-screens. Not moving to SaaS will inevitably result, over time, in your IT costs becoming out-of-line with your competitors, giving them a financial advantage and therefore allowing them to capitalize on your existing client base. Keep in mind, today it is entirely possible for a new competitor to start business with no back-office IT infrastructure, instead, a $400 Netbook utilizing SaaS and/or free web based tools (ex. Google Apps). This is the future.
The days of building custom in-house line-of-business applications are rapidly closing. Invariably, ISVs also will cease supporting/building on-premise software. A large customizable SaaS application base exists, and will continue to expand with the growing popularity and acceptance of SaaS software and/or open source. For example, CRM software can be found for 40-60% less expensive when compared to package on-premise software. SaaS software, as it is newer, benefits from leading edge intuitive interfaces, making usability probably 50% better and significantly quicker to get deployed. Quicker to get into production because SaaS providers charge per-seat per-month. If only (ex.) “Florris” is using the SaaS app, coming up-to-speed and envisioning how Company will leverage software, the SaaS vendor is not making money. It is in their financial interests to get you quickly implemented, typically via “quick start” programs and into production.
SaaS provides you with a predicable business expense. Unless your company has established a server evergreening policy and software upgrade policy, new server costs and software upgrades are typically un-budgeted capital expenses.
Moving to a SaaS based platform will allow, as you migrate, to redeploy your IT resources. For example, as some point your company should not require a dedicated SQL administrator, an expensive resource.
Single sign on (SSO). Presently, each user in Company likely has one user id which permits (or denys) access to network resources (file & print), Exchange, Sharepoint, and possibly customer line-of-business applications. This is the power an on-premise Microsoft Windows infrastructure brings. Externally hosting Exchange should continue to allow for SSO, provided the SaaS/ASP provider supports it – they may charge extra.
A few good articles (I highlighted points of value)
- Aberdeen’s (2008) analysis of Salesforce.com. Business pressures driving SaaS http://www.diigo.com/08itd
- Gartner article on popularity of SaaS http://www.diigo.com/08iss
- Gartner analyst Robert DeSisto on the five SaaS “myths” http://www.diigo.com/08it9
- Hosted vs. SaaS Exchange http://www.diigo.com/08iu6