Software as a Service has been with us for a while now and the initial hype has died down (only to be replaced by Cloud Computing hype, although this is moving out of its own hype phase and has to start delivering on its promise now). But what is the real uptake of SaaS and is it the future?
SaaS has been hugely successful in some areas, and with good reason. The most obvious examples are email (Google, Microsoft) and CRM (SalesForce, Oracle) where the promise of low monthly costs per user and the removal of all the systems management work have appealed to a lot of people. Where a very standard, functional service is needed that doesn’t deviate too far from the norm, organisations (particularly SMEs) will turn to SaaS to avoid upfront capital costs and get a solution in place very quickly. Sometimes these decisions are also made to bypass internal IT departments who are perceived to slow down the procurement process.
However, SaaS, at least in its current state is not the answer to everything. Most offerings provide relatively little opportunity for significant customisation, and integration with other systems is often very difficult and/or limited. If your IT systems are meant to be a differentiator and give you competitive advantage, then SaaS doesn’t appear to be a viable option in many cases. Other concerns also linger about the privacy/security of data and the danger of SaaS providers disappearing – it isn’t much of a stretch in the current economic environment to envisage a SaaS provider suddenly stopping its service. If that happens then the backlash on all SaaS providers could be significant.
SaaS is clearly going to be with us in the future, but I think it’s a long way from being the future of all IT solutions. For more commoditised types of applications then it’s a great idea but I don’t think many companies (beyond the very small and straightforward) are going to be going 100% SaaS just yet.
Andrew
There are risks (as outlined in your article) but these are vastly overshadowed by the advantages....but I would say that seeing as I own a SaaS provider ;)
Ross Cooney
www.emailcloud.com
