Serving Up SaaSBy John Jainschigg | Posted 2008-06-26 Email Print
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IT leaders polled about software as a service confirm that it delivers robust applications—typically at lower cost than conventional deployment and licensing models. But implementation is slow in the enterprise core, where data security, availability and ease of integration remain key concerns.
Andy Steggles, CIO of the Risk and Insurance Management Society, considers himself a convert to software as a service. It was a very different story
18 months ago, when he was sure SaaS would never work for RIMS’ complex systems and the mission-critical data the New York-based professional association had on its 11,000 members around the world.
Steggles understood the benefits of SaaS—no infrastructure to mind, no maintenance, access from virtually anywhere via a browser—but he thought it was basically a sales pitch. “We were used to maintaining applications, and we liked the sense of control that gave us,” he says. “But we wanted to implement a sophisticated social network for our members, integrated with our main database. In a conventional deployment, the application we envisioned would have required four or five servers and cost maybe $150,000 for software and integration, plus maintenance. So we decided to try a SaaS solution from Higher Logic.
“Initially, we were concerned about it, but the numbers made it a no-brainer. Low integration costs and a very reasonable monthly charge meant massive savings. And in the 18 months since implementation, not only have those savings been realized, but the applica-tion has given us absolutely no trouble at all. It works reliably, and our members love it.
“Now I want everything to be SaaS,” he adds.
When listening to CIOs talk about SaaS, it’s clear that the conversion Steggles describes—from skeptic to believer—is becoming more common. One reason is long-term exposure: In an April SaaS survey conducted by Burton Group and Ziff Davis Enterprise Research, 67 percent of the 252 CIOs whose companies use some form of SaaS have been doing so for two or more years.
“The growing number of SaaS adopters was the primary reason for doing this survey,” says Craig Roth, Burton’s vice president and service director, collaboration and content strategies. “Most other surveys have focused on the risks and benefits of SaaS, but we felt there were finally enough software as a implementations to warrant a report on the lessons learned. This survey provides real-world information that other organizations considering SaaS can use to help plan their own deployments.”
The early adopters in our survey have had an opportunity to experience the full gamut of SaaS upsides and downsides, to educate and serve several generations of users and managers in the SaaS regime, and to shepherd their implementations through several budget cycles.
And these IT managers are talking. Of the respondents who have implemented SaaS, the majority ranked conversations with users at other companies as the strongest influence in evaluating potential SaaS applications—marginally ahead of reading trade publications and Web sites or speaking with vendor customer references. So there is an active word-of-mouth network reducing fear, uncertainty and doubt. And its messages are harmonizing with the obvious trends driving IT to reinvent itself, become more efficient and positively impact the bottom line.
Increased user familiarity with the notion of Internet-delivered applications also plays a role in reducing opposition to SaaS, engendering tolerance for the occasional quirkiness of applications that live “in the cloud.”
“We’re very interested in Web 2.0, the rich Internet and social media as a component of our foundational mission,” says Sharon Burns, CIO of the John D. and Catherine T. MacArthur Foundation, a private grant-making institution based in Chicago. “Our users spend a lot of time online and are very comfortable with the idea of working with applications via the browser. I think they’re also tolerant of what that may mean: having to refresh the page from time to time or deal with the occasional glitch. It’s not a big deal.”
The top three reasons mentioned for the interest in SaaS applications are no in-house maintenance, shorter time to rollout than with conventional software, and usability from just about anywhere.
Of the respondents already using SaaS, about three-quarters said they plan to expand their use of these applications, and 65 percent said using this solution has lowered their company’s overall software costs. More than one-quarter said their company’s architecture was fundamentally based on SaaS.