Nilanjana Nangia
Eventually SaaS would be the default choice for many applications and CIOs of tomorrow would have less of a dilemma.
Today CIOs are facing the dilemma of running their own datacenter versus buying the service in SaaS form. Arguably “Software-as-a-Service” has always existed, though it lacked a structured market or a definition (“a Service that allows users of specific software to outsource the software hosting & delivery and access it over the network”).
For example, Salesforce.com allows companies to outsource the CRM infrastructure in favour of a subscription based service. So the CIO has the choice of spending on real estate, hardware, software, solution, manpower, power, cooling and maintenance; or, subscribe to the ready-made solutions on the web.
Contributors
*There is an increasing trend to focus on core competency (say, fastfood) and disinvest from other areas (IT).
*SMEs in emerging economies are looking for rapid growth. They can’t block capital on non-scalable datacenters. Also, SaaS allows SMEs to expand their operations across the world seamlessly.
*For SMEs in BRICs, one of the primary factors for SaaS adoption has been the lower initial investment.
*Emergence of Web2.0 models has made SaaS concept more palatable.
*Increasing network speeds have made it possible for businesses to access many services over the network.
*A classic enterprise computer is a scale-up champion, delivering high performance from a single box. SaaS can leverage on the rise of commodity industry standard hardware which can be clustered to extract scale-out computing power.
*Modern encryption and security techniques have improved to the point that the decision has tipped in favor of keeping certain classes of data “on the net”.
*While new SaaS vendors offer web-only version, classic software is also getting SaaS-enabled.
*Many datacenters around the world are facing power and cooling issues.
*Outsourcing computing to a company which serves multiple customers means increased efficiency and better utilisation of resources by using techniques like Virtualisation.
*SaaS simplifies licensing needs as the need for an array of licenses is eliminated.
Inhibitors
*Convincing Big MNCs to diffuse their current infrastructure is not easy. Also, the marketing of most SaaS products is very segment oriented and not pervasive, so the mindset change is difficult.
*New technology offers a higher risk/reward scenario than many businesses are willing to take in the current market.
* Allowing fine grained configurability to each user of the same backend software is not easy. Typical configurability of a SaaS version may not be as detailed as the equivalent classic software.
* Any in-house solution includes hardware and software which maybe re-deployed onto a different task later. SaaS provides only a specific service which can’t be reused to do a different task.
*Some data in today’s data-warehouses are simply too critical to hand over its possession outside.
*For certain interactive applications, the exact same experience over the web is not possible.
Future
Gartner predicted that by 2011, 25 per cent of new business software will be delivered as SaaS. IDC expects CIOs will spend 20 per cent of their budget on SaaS in the near future. Eventually SaaS would be the
default choice for many applications and CIOs of tomorrow would have less of a dilemma. |
