Software as a Service (SaaS) and some Interesting Predictions
Maxager Technology is a Salesforce.com customer, and is (like Salesforce) also a “SaaS” company (Software as a Service) -- delivering our solution in terms of a yearly subscription, accessible via the internet.
Salesforce.com is widely considered to be a pioneer of SaaS, and at their "Dreamforce" user conference in San Francisco this past October, the No Software buttons were omnipresent and analyst quotes were flying. In his keynote address, CEO Marc Benioff noted that Gartner Group projects that 25% of all new business software will be delivered as a service in five years. Another firm, Triple Tree , has the number at 40% -- but within 3 years. The thing he said that really struck me, however, was the Gartner Group claim which states that nearly two-thirds of the entire IT budget in midsize businesses is spent on IT infrastructure (servers, software licenses, maintenence, etc.) and that none of that money contributes direct value to the business or to the improvement of the enterprise performance.
That’s 66 cents out of every IT dollar spent contributing no “direct value to the business.”
So what does 66 cents on the IT dollar pay for? Security? Any SaaS company that is going to succeed likely has you beat with regard to security. Maxager, for example, provides a SAS 70 compliant remote hosting facility with state-of-the-art security technologies and ongoing evaluation of emerging security developments and threats. Strict in-house procedures ensure any access to a customer’s system has specific prior customer approval, and redundancy throughout the infrastructure ensures the highest possible reliability.
Support? If you have ever noticed that support or contact with your software vendors typically improves around the time your maintenance contracts are up for renewal, you will appreciate the fact that SaaS companies typically include support in the cost of the subscription. Same with upgrades, which are done automatically for you, typically with nothing to download or install save for maybe a newer version of Internet Explorer -- but you probably have that already. And best of all, there are no servers or hardware to upgrade or replace when the new version of the software doesn’t play nice with your current infrastructure.
Implementation? SaaS is typically installed in less than half the time of on-premises solutions.
Flexibility? Most vendors allow you to customize fields or labels to adhere to your current corporate standards. And, most importantly, many SaaS vendors allow you to trial their products for a short period of time at limited or no cost. How’s that for flexible?
I tend to lean more towards Triple Tree’s estimates. If the option is there to subscribe, I just can’t imagine buying software ever again.
Comments