As you may know, Software as a Service (SaaS) is a method for delivering software applications to customers over the Internet. However, since SaaS solutions have only been available for approximately seven years, many information technology (IT) people – as well as company managers and owners - know very little about SaaS due to its recent emergence. Therefore, two key issues will determine if SaaS will grow in popularity in the near future: the education and training of IT people and the education of people in the business world.
In 2000, the United States Census Bureau noted that out of two million provider businesses, approximately 100,000 of these companies were utilizing SaaS. Therefore, the growth potential for SaaS providers is huge as people in the technology field realize that there are alternatives to the technology they have been using for the last twenty years.
Steve Cakebread, one of the international thought-leaders in SaaS, is an independent authority/consultant who understands both the theory and implementation of SaaS in today’s business marketplace. As a former president and chief strategy officer of Salesforce, a sales strategy company, he believes that the power and acceleration of solutions being provided by SaaS is “truly mind boggling.”
Facts People Don’t Know About SaaS
No need to worry about disaster recovery
Some people in the technology field tend to understand and appreciate the fact that the more a company runs its business in a SaaS environment, the less the company has to worry about disaster recovery. Many SaaS providers are running in data centers in a variety of places besides the United States. As a result, businesses often end up with some distributed data operations for its solutions – without one center - giving the companies multiple solution providers. For example, a company’s ERP system could derive from one SaaS provider in Virginia, while all of that same company’s mail could come from Google- a SaaS provider - in Seattle.
SaaS companies emphasize security procedures
SaaS companies will spend an extraordinary amount of money on security and privacy while a typical business will not spend as much. That said: “A SaaS company can actually provide you with better security and privacy than your own operations in a data center,” says Cakebread. “Most SaaS companies spend proportionally more dollars on security, privacy and prevention than a typical business would today because they have leveraged their customer base and their investments.”
SaaS lets you run your business everywhere
With the availability of broadband, WiFi and netbooks anytime, running a business from any location is now a reality. As airplanes begin to introduce wireless internet early next year, an individual can run a business from his or her coach seat, target specific applications, and save information on the Internet.
Multi-tenant efficiency
On the technical side, computer experts need to understand and appreciate the difference between a multi-tenant and the typical way of keeping data with one provider. With SaaS, there are multiple users for the technology which results in a faster turnaround. SaaS technology allows for a sharing model in a multi-tenant environment – and it is simply a matter of setting “switches” to determine who can see what data.
For almost twenty years now, technicians have sought out all the computers and units at companies to upgrade their applications and distribute the information. In a SaaS environment, particularly in a multi-tenant architecture, only one upgrade is needed – and generally this upgrade can be accomplished over a weekend. This dramatic change is due to the fact that the solutions are delivered via the Internet.
SaaS Providers Today
According to Cakebread, Google has a development platform - resulting in numerous providers with Google solutions. Meanwhile, Salesforce.com has a business solution platform called Force.com, with 60,000 subscribers. “What you’re starting to see is third parties developing on those platforms in a SaaS environment,” notes Cakebread.
Most software that exists today was developed in the late 70s and early 80s. Back then, the Internet, broadband and wireless did not exist. The architecture and technologies - and billions of lines of code- will not be converted to a SaaS environment. “This becomes a cash flow issue for most traditional software companies. It will be a rare software company that will deliver you a SaaS platform,” Cakebread adds.
Typically, a SaaS provider will upgrade or enhance their solutions every three to four months. “That’s something unheard of in traditional software, which is typically two to three years,” he says.
Challenges for SaaS
SaaS is a new “programming language” that IT people have to learn. Although it is the latest generation, it is not hard to learn. “Programs can be developed in SaaS very quickly,” notes Cakebread. “However, if you’re a third party developer, you have to create a business and what hasn’t changed is brand building, marketing and sales.” As Cakebread points out, if you create a product in SaaS, you still need to create a business that delivers that solution to your customers, and it could take five to seven years to do that.
One of the problems that SaaS has not solved yet is the ability to quickly integrate applications. If SaaS is to be implemented with ten to twenty old solutions, it will take the IT department longer to get the integration completed. It is better to be point specific and integrate over time - rather than trying to do every application at once.
