Nothing is hotter right now than software as a service (SaaS). Especially for small and midsize firms, the chance to get world-class software functionality without having to invest in big up-front costs seems like the ultimate no-brainer.
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But is SaaS really ready to supply all of your company's software needs? 数据挖掘交友
To find out, I recently checked out a panel of software industry experts who were debating that very topic. Though the session was hardly packed, interest was intense. That's because SaaS, the panelists agreed, gives functionality to smaller companies that they wouldn't have otherwise been able to access. 数据挖掘交友
In one example from the panel, say you're a limo service renting a half-dozen cars. You can now turn to SaaS provider EchoSign to get exactly the same sales-contract service that giant British Telecom uses. And you get the exact same benefits: agreements signed in hours, not weeks.
As attendee Ben Kepes put it: Why build a data center or buy expensive traditional software when it's so much more readily accessible and cheaper via SaaS? In addition, SaaS lets companies avoid fixed costs and instead vary them according to growth and usage. Perhaps even more important in today's economic climate, costs can be cut if business and usage shrink.
"As a CIO, I never want to write another check to Oracle for $1 million based on my best guess of how many users I'm going to have," said Ingres CIO Doug Harr. "It doesn't make any sense. The old model is bankrupt."
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Robert S. Hull, founder, CFO, and VP of professional services at Adaptive Planning, summed it up succinctly, saying the SaaS' subscription model is low-risk, high-reward. And unlike the application service provider (ASP) model that was once popular, Hull said, SaaS apps are actually solving key business problems. "That wasn't the case five years ago," he said.
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Sure, they're all SaaS proponents, but at least these guys are drinking their own Kool-Aid. Harr said that Ingres made the strategic decision to become 100% SaaS. If it were not for Exchange and Office, Ingres would, in fact, be running entirely in the cloud. 数据挖掘交友
To be sure, the savings are significant. In a previous position, Harr managed a Siebel implementation for 150 salespeople that cost $1.5 million. But Ingres implemented a Salesforce.com approach that costs $140,000 year for 130 users. The $600,000 Harr spends on Salesforce now is less than the up-front licenses he spent on Siebel four years ago. 数据挖掘研究院
Similarly, Daniel Druker, senior VP of marketing and business development at Intacct, said he has 150 employees and just one IT guy -- who maintains Windows desktop PCs. Everything else is outsourced to SaaS vendors. "And I've got 100 customers like that," Druker boasted. 数据挖掘工具
Who's On First?
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What kind of company will be first to go entirely SaaS? Technology companies are prime candidates, as are service companies, startups, and any fast-growing organizations. Druker also said he sees "strong adoption in the midmarket."
Large companies are likely to be slower to embrace SaaS because of their huge investments in existing legacy infrastructures. Dismantling that existing infrastructure to transition to SaaS also is another cost. But Harr suggested that even in those cases, it can still pay off to simply ditch the sunk costs of legacy implementations and move to SaaS. 数据挖掘实验室
You have to look at total cost of ownership, Harr said, using a typical scenario: "I know we spent $1 million up-front, but we have a $200,000 depreciation bill and a $200,000 maintenance bill." So it may still make sense to build a spreadsheet and calculate the comparison. 数据挖掘交友
Still, it's a big deal for an enterprise to make that kind of change, so Jeffrey Schultz, VP of marketing at Bill.com, expects larger companies to delay a strategic move to SaaS and instead have individual departments jump in whenever the overall corporate system doesn't meet their needs. "The burden is on SaaS vendors to make it easy for department heads to bring it in," Schultz said.
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vendors typically provide better security than most companies do for themselves.
For example, Intacct's data is hosted in an IBM data center that is protected by armed guards and retinal scanners. "My customers have servers in a closet," Druker said. "We may not be perfect, but it's a big step forward."
That's because the stakes are higher for SaaS companies, Schultz explained. "Think about the impact on us if we have even one data loss," he said. A security glitch for a normal company can be unpleasant, he reasoned, but for a SaaS company where a breach would affect multiple customers, even a hint of security problems could be a death sentence. 数据挖掘实验室
Integration Issues? 数据挖掘交友
A more reasonable cause for concern lies in integration issues. "No one is saying existing companies are going 100% SaaS all at once," Druker claimed. "It's going to be adopted department by department, as needed." But that raises the question of how to integrate a hodgepodge of applications, like in the '90s. That led to the development of application suites.
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While Hull said the SaaS industry is doing "a good job" on integration, there are areas where "we could do better." Vendors need to make their APIs available so that apps can talk to each other, he suggested.
As it was back in the '90s, a real opportunity exists today for someone to come in and integrate multiple SaaS products into a single solution that's easy to buy and install. But the competition won't be so one-sided with SaaS apps. The difference this time around, Harr said, is that "back then it was incumbent on the customer to do the integration." Now it's up to the SaaS vendors to do it.
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A New Role For IT? 数据挖掘工具
Another, more subtle, barrier to SaaS adoption is that it puts existing IT managers into a very different role. When companies can make software decisions on a departmental basis, and someone outside the company is actually responsible for delivering the apps and infrastructure, what is the role of IT management?
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Panelists suggested that modern CIOs need to become a business partner -- working to help business units make product decisions and integrate individual solutions into the overall business process. CIOs whose main concern is protecting their turf risk finding themselves out of the loop. "You can't be Mr. Control Freak," Harr said. 数据挖掘论坛
In the end, 100% SaaS may not yet be a realistic solution for most companies. Instead, it's a worthy goal to strive for. "SaaS is a great solution," Hull said, but make sure it solves the business problem, integrates well with what you already have, and it's open. "[Then you'll be a] happy enterprise with lower costs." 数据挖掘论坛
Druker has high hopes for SaaS. "SaaS is going to win because, for the first time in a long time, the vendor and the customer are goal-linked," Druker concluded. "When vendors live on subscription revenue and renewals, they are forced to keep customers happy."
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