Thursday, January 29, 2009

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!

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