Transcript hamptonroads.iiba.org

Software As A Service (SaaS)
Prepared for
International Institute of Business Analysis
May 24, 2011
Al Moore
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Agenda
What Is SaaS?
What Drives Companies to SaaS?
What Prevents Companies from Using SaaS?
Selecting a SaaS Provider
Major Offerings & Players
Take-Away Terms
Resources
Open Discussion
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SaaS Defined
According to Wikipedia…
Software as a Service…
A software delivery model in which software and
its associated data are hosted centrally (typically
in the (Internet) cloud) and are typically accessed
by users using a thin client, normally using a web
browser over the Internet.
Other Terms:
• On-Demand Software
• Leased Software
• Utility Computing
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Why You Want to Learn About SaaS
According to Gartner Group
• SaaS sales reached $9B in 2010, up 15.7% from
2009
• SaaS sales are projected to increase to $10.7b in
2011, up 16.2% from 2010
• SaaS applications, which accounted for a little
more than 10% of the total enterprise software
market last year, would represent at least 16% of
worldwide software sales by 2014!
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SaaS – Future Prospects
Per Forrester Research…
SaaS TECHNOLOGY STATUS
Percent Respondents
5
10
15
20
25
30
35
40
Implemented, Not Expanding
Expanding or Upgrading
Implementing within 12 Months
Implementing in a Year or More
Interested, but No Plans
Not Interested
Don't Know
~35% have or are implementing/expanding in 12 months
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SaaS – What it Isn’t
NOT the ‘ole Service Bureau…
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SaaS – What it Isn’t
NOT the more recent Application Services
Provider (ASP) model…
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SaaS – What it Isn’t
SaaS - ASP Differentiators:
• ASPs typically manage third-party software
• ASPs typically offer Client/Server-based
applications
• ASPs run multiple instances of the software
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SaaS – What it Isn’t
NOT Infrastructure as a Service (IaaS)…
• AKA contracted “Cloud Computing”
The National Institute of Standards
definition:
Cloud computing is a model for enabling
convenient, on-demand network access to a
shared pool of configurable computing resources
(e.g., networks, servers, storage, applications,
and services) that can be rapidly provisioned and
released with minimal management effort or
service provider interaction.
Cloud Computing might be used, but it isn’t “It”
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SaaS – What it Isn’t
NOT Platform as a Service (PaaS)…
The delivery of a computing platform and solution
stack as a service. PaaS offerings facilitate
deployment of applications.
All of the hardware & software facilities for
application design, application development,
testing, deployment and hosting
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Team Collaboration
Web Service Integration
Marshalling
Database Integration
Security
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Storage
Persistence
State Management
Version Control
Code Instrumentation
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SaaS – What it Is
The modern SaaS Vendor Solution will exhibit the
following characteristics:
1. Rent-like Pricing vs. Permanent Use Licensing
2. Configuration vs. Customization
3. Multi-tenancy vs. Multiple Instances
4. Frequent Release Schedule vs. Annual or Bi-Annual
5. Open Integration Protocols vs. Proprietary
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SaaS – Rent-like Pricing
Per-seat / Per-month fees
Benefits:
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•
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Lower Implementation costs
No capital expenditures
No additional ongoing maintenance or support fees
“Freemium” model
Excellent for start-ups
Drawbacks
• You never own it
• Costs escalate with growth
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SaaS – Multi-tenancy
All users access one set of code and one
database
“One House Fits All”
Benefits:
• Economies of scale
• Data Mining (?)
Drawbacks:
•
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Lack of Flexibility
Real pressure on the quality of design in the
application architecture
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SaaS – Configuration
All users access one set of code and one
database
High reliance on APIs
“One Size Fits All”
Benefits:
• Economies of Scale
Drawbacks:
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Lack of Flexibility
Real pressure on the quality of design in the
application functionality
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SaaS – Release Frequency
SaaS providers typically update their software
more frequently than traditional providers - it’s
easier!
Benefits:
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More features, more quickly
Enhanced testing capabilities
Limited customer impact
You don’t have to manage it!
Drawbacks:
• You might have too much spare time?
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SaaS – Open Integration Protocols
Providers must leverage open protocols to operate
over the Internet
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HTTP – Hypertext Transfer Protocol
REST – Representational State Transfer
SOAP – Simple Object Access
JSON – JavaScript Object Notation
“Mashups” - a web app that combines data and/or
functionality from more than one source
Benefits:
• More interoperability
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Why Consider SaaS?
MONEY!!
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SaaS – Internal Business Drivers
Per Forrester…
BUSINESS DRIVERS
Percent Reporting "High" or "Very High" Importance
10
20
30
40
50
60
70
80
Lower Overall Costs
Speed of Implementation
Best Application Functionality
Avoid Up-front Costs
Large Number of Remote Users
Lack of In-house Support Staff
Functions N/A in Traditional
In Line w/ General IT Strategy
Only Option Available from Vendor
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SaaS – External Drivers
Acceptance of the Browser GUI
Standardization of Integration Protocols
Availability of Broadband Service
Internet Reliability
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SaaS - Barriers
User Concerns over:
1. Security
2. Functional Flexibility
3. Provider Viability
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Security Concerns
Data is no longer within your walls, behind your
firewalls
It’s accessible from anywhere
Mistakes happen!
Cloud Model –
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Authentication management is hard to perform &
Integrate with existing, in-house resources
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Security Standards are immature
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Your data can move without your knowledge
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Industry secrecy
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Potential Remedies
Utilize recognized standards:
• SAS-70
• ISO 27001
Unambiguous SLAs, with penalties
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User access controls
Back-up & recovery measures
Security vulnerability tests
Use of Encryption & Audit Logs
Reverse Access
• Data delivery when contract terminates
Data Escrow Agreements
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Functionality Concerns
“One Size Fits All”
• Different user requirements must be “configurable”
• User requirements must be unambiguous
• How are later configuration changes handled?
• Are they even possible?
• Places a huge emphasis on the Provider Evaluation
process
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Potential Remedies
Define specific Functional Requirements as
“Ability to…” statements
• “Ability to print separate warehouse Pick Tickets for
each Zone”
• “Ability to print Pick Ticket line items by shelf
location in descending numerical sequence.”
Review the Application Database to ensure it
meets your critical needs
Identify Provider API Capabilities at a
detailed level
Review the Report Generation Capabilities
for ease of use and completeness
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Provider Viability Concerns
Face it…
…the Provider holds the keys to your
kingdom!
Relocations
Management Changes
Ownership Changes
Financial Failure – Foreclosure - Bankruptcy
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Potential Provider Viability Remedies
Deal only with Tier 1 Providers
…the smaller the Provider, the greater the
risk
Execute a Strong Contract that offers you
protection against specific risks & events
Conduct Effective Reference Checks
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Taking the Leap
D
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Selecting the Provider
Selection Criteria
1. Functional Fit
2. Total Cost of Ownership
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Over Five Years, with Growth
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Use “Net-Present-Value” analysis
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Implementation Costs
3. Contract & SLAs
4. Solution Infrastructure
5. Security – Data and Physical
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Including Business Continuation/Disaster Recovery
Backups
6. Permissions and Password Protection
7. Level of Customization
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Selecting the Provider
Selection Criteria (cont.)
8. Integration with existing or planned
applications
9. Cross Platform Compatibility
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Operating Systems
Browsers
10.Scalability
11.Mobile Compatibility
12.Upgrades
13.Services Available
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Business Consulting
Training
Implementation & Transition Planning
Customer Support
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Selecting the Provider
Selection Criteria (cont.)
15.Business Intelligence
16.Flat File Interface Capability
17.Tenure
18.Competitiveness
19.Number of Paying Customers
20.Financial Health
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Profitability
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Venture Capital
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Offerings and Players
Offerings:
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Business Analytics
CRM
Data Warehousing
E-Commerce
ERP/MRP
Financial Accounting
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Human Resources
Infrastructure Management
Middleware
Office Productivity
Sales Forecasting
Sales Force Management
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Offerings and Players
Players:
Office Productivity/Collaboration/E-mail
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Amazon EC2
Google
IBM
Microsoft
• Novell
• Yahoo!
• Zoho
General Business Management
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Amazon
E-Bay
IBM
LongJump
Oracle
• SAP
• SalesForce.com
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Take-Away Terms
Data Escrow = data assets placed in the custody of a thirdparty through a contract
IaaS = hardware Infrastructure as a Service
On-Premise = the opposite of the SaaS delivery model
PaaS = Platform - a method for deployment of the “Solution
Stack”
Provisioning = Implementation
Service Level Agreements (SLA) = contractually defined levels
of service; regularly measured to validate
contract compliance
Solution Stack = all of the hardware and software required to
develop, test, and deploy application
software
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Conclusions
1. Targets the Small Business/Start-up Market
2. Office Productivity is the most likely use
3. SaaS appears to be trailing IaaS and PaaS
4. The Pricing/Features Combinations can be tricky
5. There will be Start-up Costs
6. Lack of Flexibility will hinder adoption in the
General Management arenas
7. Vendor Selection will be no less risky than OnPremise – more so for Management apps
8. SaaS could lead to more “Best-of-Breed”
Software Strategies
9. Watch Microsoft’s Office 365
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Resources
www.business-software.com
www.cio.com
www.crmsoftwareblog.com
www.earthweb.com
www.forrester.com
www.networkworld.com
www.saaschronicles.com
www.wisegeek.com
www.wikipedia.com
www.zdnet.com
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Q&A
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Thank You for Your Time!
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