Thursday, January 29, 2009

Enabling the Inevitable: Selecting Strong SaaS Providers

At ebizQ, where I blog primarily about business intelligence, Andre Yee, senior vice-president for products at Eloqua, blogs about SaaS. He recently posted an entry I recommend to everyone -- "Is SaaS Enterprise-Ready? How to Assess Your SaaS Vendor." In this intelligent and helpful post, Yee recommends that potential SaaS users look at their candidate vendors from several key perspectives, to determine if those vendors have what it takes to support those users' business requirements. Specifically, Yee recommends getting all the information available about:
  • Reliability;
  • Security;
  • Scalability;
  • Business Process Integration;
  • Data Conversion Services; and
  • the ability to pass a SAS 70 Audit. ("SAS 70," according to Wikipedia, "defines the professional standards used by a service auditor to assess the internal controls of a service organization and issue a service auditor’s report." Without getting into too many more details -- yes, it's very, very important.)
I agree that all of these are important criteria, whether the "enterprise" doing the evaluations is large, small, or in-between. However, there are two other criteria that are at least as important as any or all of the above -- and perhaps the most difficult about which to obtain accurate, credible information.

One is interoperability, with other SaaS solutions and with incumbent infrastructures and applications. The other is financial stability.

Of course, interoperability with what's in place seems obvious, but is frequently inadequately addressed by those seeking to implement new solutions, SaaS-based or otherwise. And where SaaS is concerned, interoperability with other SaaS solutions could become critical. If your company decides a particular SaaS solution needs replacing with another, that effort should not require a fleet of forklifts.

Further, if you're betting on a particular SaaS solution and vendor, that bet should be as safe and well-covered as possible. And no company can bet its own competitive agility on any vendor that may not be around long enough to sustain the promised advantages of SaaS.

But "interoperability" is a slippery slope, and many if not most SaaS vendors are privately held, making financial information difficult or impossible to obtain. As the computer in Douglas Adam's incredibly wonderful book "Life, the Universe, and Everything" said, "Hmm...tricky."

One incredibly useful step: find out who's actually providing and managing the SaaS vendor's infrastructure. See if they're working with proven providers and solutions, such as's platform, Google, or's Amazon Web Services, or with specialists such as OpSource or Inforonics. And get as many details as you can about how deep those relationships are, and how stringent and enforceable the relevant service level agreements (SLAs) are as well.

Another is to look closely at every SaaS vendor's partner ecosystem. This not only tells you how broadly supported a vendor and its solutions are by other companies, but also offers clues as to options for an exit or transition strategy, should one become necessary.

Still another good step: make sure your company's own IT infrastructure (and yes, your company does have one, extensive or not) is sufficiently well-managed to be "SaaS-ready." I'm a big fan of for this, because they offer SaaS-based solutions for IT infrastructure management. But any approach you find that enables effective management without making it another full-time job for your company is better than no management at all, a situation I've seen all too often.

SaaS may be inevitable for a lot of businesses, but it's not going to be without challenges for many if not most of them. So, as should be done with every significant business decision, "trust, but verify."

SaaS: Resistance is Futile!

Boy, I do so love it when multiple minds start seeing things in similar ways in this often fractious world of business-centric IT...

So IDC, respected market-watchers, have issued a release about a new study called "Economic Crisis Response: Worldwide Software as a Service Forecast Update." In said study, IDC has increased its year-over-year growth forecast for software as a service, or SaaS, from 36% to 42% by year-end 2009. "Recent IDC surveys and customer interviews support the finding that the harsh economic climate will actually accelerate the growth prospects for the software as a service (SaaS) model as vendors position offerings as right-sized, zero-CAPEX alternatives to on-premise applications. Buyers will opt for easy-to-use subscription services which meter current use, not future capacity, and vendors and partners will look for new products and recurring revenue streams," IDC said.

This follows by something like two weeks my last published work for Aberdeen Group (my position and several others were eliminated recently), an Analyst Insight entitled "SaaS and RFID: Key Business Value Enablers in 2009." Based on a survey I conducted in September and October 2008, I found that business users are pursuing SaaS primarily to meet increasing demand for new applications, maximize the ROI of their IT investments, and manage escalating IT infrastructure costs. (You can read the entire Analyst Insight here, if you are a subscriber to Aberdeen's Vault service.)

And if that's not enough convincing, I also blog about business intelligence at ebizQ, where an earlier version of this very post first appeared days ago. Also at ebizQ, my esteemed industry colleague Treb Ryan, CEO of OpSource, wrote a piece entitled "How SaaS Companies Can Survive the Downturn." Now, since Treb and his team sell solutions for SaaS and Web-based companies, his perspective is a bit more focused on them than on their customers. But the points he makes are points users should take to heart, for reasons which should become clear in another paragraph or so.

Look, here's a quick take on the bottom line of all of this. Almost none of you reading this is in the full-time business of managing software or IT infrastructures. As I've said previously elsewhere, the less effort and fewer resources you have to devote to such things, the more you can devote to making your business more competitively agile and impressing your customers, partners, prospects, and internal users.

SaaS, when implemented effectively, can deliver these and other benefits, rapidly and economically. And it can do so with and for a variety of business applications and functions, from BI itself to, perhaps ironically, IT infrastructure management. (For a great example, check out, if you haven't already, and compare it to traditional tools or doing nothing, as many companies do today, unfortunately for them and their customers and partners.)

If your company's already using SaaS, assess the success of incumbent efforts, and use them to map out plans for identifying and pursuing opportunities for additional deployments. If your company's not yet using SaaS, find some credible advisors and vendors, and talk to them. I promise you, your competitors, including that start-up you haven't heard of yet, are already doing so.

SaaS is not just the latest take on previous software delivery models such as application service providers or ASPs. True SaaS uses modern technologies to free users from the burdens of managing traditional "bits on disks" and supporting infrastructures, so those users can focus on running their core businesses.

If you're a current or potential SaaS user, make sure to pick vendors and solutions that are both sufficiently reliable, robust, and scalable to support your needs and goals today and over the long haul. If you're a current or potential SaaS vendor, make sure to pick technologies, policies, and practices that credibly and demonstrably make you one of the vendors I've just ecouraged users to pick.

I'll have lots more to say about these and related subjects, so drop by often, and feel free to post comments and/or drop me a line at to offer criticism, encouragement, or suggestions -- especially for potential SaaS-related projects with which I might be able to help you and your organization!