E-Sourcing Forum » Another vote for SaaS

Another vote for SaaS

March 4th, 2008 at 06:07am David Bush - Iasta

On-demand, whatever. This comes from an article I found on Supply Chain Brain by Jeff Kaplan, titled: Top Ten Reasons Why On-Demand Services Will Soar in 2008.

His reasons in summary:

Services are Recession Proof
Everyone’s Going Virtual
Amazon, IBM and Google Bet on Utility Computing
Nick Carr Returns
SaaS Solves SOX
Managed Services 3.0, Unified Communications Services and Service Automation
Carriers and Channel Companies Find Success With New Services
Failure Doesn’t Matter
IT Discovers Services are the Solution
Wall Street Buys Into Services

You can read the article for details as he describes them. Three of the ten stuck out a little more than the rest.

First is the #1 point, which states:

“The ability to adopt on-demand services on a pay-as-you-go basis will be a perfect sourcing strategy for businesses seeking greater cost-controls and flexibility.”

This is very self explanatory and the SaaS model has ALWAYS been easy for everybody to “turn on and go”.

Next on point #5, which states:

“A year ago, most publicly traded companies and other large-scale enterprises rejected the idea of SaaS because they thought they needed to take greater responsibility for their own compliance requirements. Now, they view the process controls, auditability and offsite hosting features common in most SaaS applications as a perfect solution for their Sarbanes-Oxley (SOX) needs. As a result, enterprise adoption of SaaS will accelerate.”

That is a huge shift of opinion and could be one of the most important foundations possible for a SaaS model. Maybe corporations are starting to listen to and understand the messaging that has been coming out for years from vendors.

Lastly, point #10:

“Wall Street loves the predictability of subscription services and now that it has a solid set of market ‘comps’ to measure business success in the services market, it will be encouraging more privately held companies to go through the IPO door.”

A couple points here. First, we have no intention of going public, but there appears to be many in SaaS that do plan this route. Also, it might give some indication as to why Ariba bought Procuri. Many have said they were looking for a mid-market story and more SaaS revenue.

Finally, point #9 is interesting but I will never bank any value on making IT departments happy. I think the only time they are truly happy, is when they can mope around the office telling everybody how miserable they are because they are too busy to have fun like everyone else.

Entry Filed under: Functionality, General, Technology

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2 Comments Add your own

1. Alan Buxton | March 4th, 2008 at 6:49 am

Good posting. SaaS is a bit of a no-brainer. And ref Ariba/Procuri, Jason mentioned yesterday that Ariba have “bet the entire company on an on-demand transformation that includes software, services and information”.

http://www.spendmatters.com/index.cfm/2008/3/3/Aribas-Unleashes-9S5-Plays-Up-OnDemand-in-a-Major-Way

Ariba, to be fair, are probably in a bit of a tricky situation. They have a legacy installed base of companies who bought the software in order to have their own system installed on their own servers. How these customers will react to such a focus on SaaS is not clear.
2. Eric Strovink | March 4th, 2008 at 10:57 am

1) SaaS works when applications follow the forms-based CICS model — i.e., the apps are thin client apps that require minimal intelligence and processing on the front end. Many applications fall into this category, but many do not; either that, or they sacrifice lots of functionality and performance in order to become thin client.
2) So, a distinction needs to be made between thin client and pay-as-you-go. I’m a strong advocate of pay-as-you-go, but BIQ couldn’t offer half the functionality that it does if it were a thin-client web app. We’re pay-as-you-go, but we’re not thin client.