In 2008 a report produced by analyst company Gartner stated that they expect as much as 25 percent of all software will be delivered through a Software as a Service (SaaS) by 2011. Having written on this subject at that time (with a particular focus on Business Intelligence) it is of-course appropriate to review where business stands today.
In some respects this prediction is ahead of schedule, certainly in respect of both small and mid-sized corporations; yet still behind schedule in respect of large corporations.
In some respects this prediction is ahead of schedule, certainly in respect of both small and mid-sized corporations; yet still behind schedule in respect of large corporations.
SaaS and the Large or Global Corporation
One of the challenges of the SaaS based community is the generalised acceptance of this category of solution within large corporations. Many have invested considerable amounts on their existing solutions and that investment is not about to be set-aside simply because a new approach to deployment becomes available.
Solutions like Salesforce.com on the face of it seem to offer significant benefit in offering a mobile sales force the opportunity to 'log-in' wherever they they can find a browser in the world and update crucial information about the status of the accounts they manage. Yet often the same can be said for any existing CRM solution; the majority of which offer external web-based access to the corporate application. In fact the majority of corporate applications today have a large user community who only access applications through web-browsers. What then is the difference between a web based application and Software as a Service?
To the business user there should be no difference, they access and enter data as needed. However, the majority of the corporate based solutions will store the data associated with all transactions on corporate servers; with local IT staff being responsible for managing the solution. Of course some corporations have facilities management companies managing their systems, yet they are still corporate owned systems, with the company both owning and controlling the data within each application. One of the advantages potentially offered is the ability to globalize all the applications provision without having to manage a 24*7 service infrastructure.
This distinction is important. The data, applications, servers, etc. are all an asset owned by the corporation. Generally these corporations wish to retain ownership and view security as a major concern. Some of the challenges here do include statutory reporting; as it is felt that there is too large a risk with data being held on external servers.
Solutions like Salesforce.com on the face of it seem to offer significant benefit in offering a mobile sales force the opportunity to 'log-in' wherever they they can find a browser in the world and update crucial information about the status of the accounts they manage. Yet often the same can be said for any existing CRM solution; the majority of which offer external web-based access to the corporate application. In fact the majority of corporate applications today have a large user community who only access applications through web-browsers. What then is the difference between a web based application and Software as a Service?
To the business user there should be no difference, they access and enter data as needed. However, the majority of the corporate based solutions will store the data associated with all transactions on corporate servers; with local IT staff being responsible for managing the solution. Of course some corporations have facilities management companies managing their systems, yet they are still corporate owned systems, with the company both owning and controlling the data within each application. One of the advantages potentially offered is the ability to globalize all the applications provision without having to manage a 24*7 service infrastructure.
This distinction is important. The data, applications, servers, etc. are all an asset owned by the corporation. Generally these corporations wish to retain ownership and view security as a major concern. Some of the challenges here do include statutory reporting; as it is felt that there is too large a risk with data being held on external servers.
The Small or Mid-Sized Business and the Cloud
For small and medium sized businesses the challenges are different. Most of the modern businesses treat their IT systems as a tool rather than an asset. Not maintaining their own servers has distinct advantages in that they simply pay a service cost for storage. In 2008 many were feeling the economic pressures in their battle for survival.
Many small business owners are looking for cost effective IT solutions. SaaS or Cloud based solutions are able to assist controlling operating costs and improve the effectiveness of their operations. Smaller businesses no longer have to be disadvantaged in terms of the quality of the applications available to them. Cloud based sales channel management give the small corporation the same capabilities as the large corporation. Indeed many actually run the same software as mega-corporations at a fraction of the cost. How? Because solution providers, like Oracle, are opening up their application availability. The difference between the SME and the global corporation being the location of the data.
The Cloud based application provider will manage the data on the company's behalf, they will retain a database that holds all client data, with software controls that ensure that each data set remains separate. Irrespective of size, every business has to be able to store, protect, manage, and whenever necessary, recover business data. It is the software supplier that becomes responsible for managing the database, protecting the data. When they are not able to manage protection correctly they can be exposing their customer to downtime and potential damage to its reputation. While global enterprises generally have IT resources and personnel to address these concerns internally, small businesses normally do not have this luxury; unless they adopt Cloud based solutions; the distinction between their application and that the global corporation adopts - customisation. Few of the low-end solutions allow customisation.
Many of the statutory concerns exist for the small business, dependent on their industry, yet is is clear that despite this SaaS can support legal compliance requirements.
Many small business owners are looking for cost effective IT solutions. SaaS or Cloud based solutions are able to assist controlling operating costs and improve the effectiveness of their operations. Smaller businesses no longer have to be disadvantaged in terms of the quality of the applications available to them. Cloud based sales channel management give the small corporation the same capabilities as the large corporation. Indeed many actually run the same software as mega-corporations at a fraction of the cost. How? Because solution providers, like Oracle, are opening up their application availability. The difference between the SME and the global corporation being the location of the data.
The Cloud based application provider will manage the data on the company's behalf, they will retain a database that holds all client data, with software controls that ensure that each data set remains separate. Irrespective of size, every business has to be able to store, protect, manage, and whenever necessary, recover business data. It is the software supplier that becomes responsible for managing the database, protecting the data. When they are not able to manage protection correctly they can be exposing their customer to downtime and potential damage to its reputation. While global enterprises generally have IT resources and personnel to address these concerns internally, small businesses normally do not have this luxury; unless they adopt Cloud based solutions; the distinction between their application and that the global corporation adopts - customisation. Few of the low-end solutions allow customisation.
Many of the statutory concerns exist for the small business, dependent on their industry, yet is is clear that despite this SaaS can support legal compliance requirements.
The Future of the Cloud?
Clearly Cloud computing will continue to attract both praise and criticism. Does the criticism have a real foundation, or is it simply based on fear of the unknown? Certainly many small businesses are moving ahead with their plans through the use of Software as a Service and it has brought cost effective access to powerful solutions, yet with big business there is still resistance, which will certainly continue beyond 2011.