ipt.net: On-Demand In Demand
Sunday, March 16, 2008 - The term "software as a service" (SaaS) has been buzzing around IT and business departments for the last ten years or so. but as more SaaS vendors succeed in the marketplace, Brid-Aine Conway discovers that on-demand software may finally be hitting the mainstream.
Everyone knows the IT world loves its buzzwords, its acronyms and all the other industry colloquialisms it uses to put complex technical ideas in a nutshell.
At times, however, these words buzz only briefly before the industry realizes it has overshot itself - Microsoft Bob, handwriting recognition for PDAs and perhaps RFID being some good examples.
If the concept doesn't go the way of the dinosaurs, however, then the buzz dies for different reasons. The idea drifts into the mainstream and becomes an integral part of modern technology, usually something people can't understand how they ever lived without - like pretty much all modern technology - and it looks like SAAS may be ready to do just that.
Much of what has previously held the SAAS movement up - concerns about security, data privacy, the role of the IT department and connectivity - is being swept aside by the evidence from early adopters.
Security and data privacy are large concerns of any company considering IT outsourcing, and certainly when looking at employing a web-based software such as CRM or ERP.
"Security is probably one of the largest obstacles to mass adoption of this service," says Jesper Frederikson, head of Google's enterprise activities in the Middle East, "I think there's definitely a job for us as vendors to talk people through what it is we do and how we do it and why it's better to be secure and structured and so on, and then I think a lot of it is perception. It's getting comfortable with the fact that more and more functionality is moving off your own network into the cloud."
And the way to change people's perceptions of SAAS is for prospective customers to look at the evidence of those companies that are already using on-demand software, according to Woodson Martin, vice president of EMEA marketing.
"The customers who evaluate us look at our history and they look at the pattern of some of the largest companies in the world who are investing and managing their business processes, companies like Citibank, Cisco, and Dell. They see that these organizations have conducted deep security audits and judged the service to be up to standards," he explains.
And companies that are using SAAS back this up - they are trusting SAAS vendors on the strength of others' experience of them: "Many financial institutes are using it; the list of references that are using SaaS is very long and security in terms of financial transactions is very crucial," says Hussam Kajan, account manager of IT & T at Dubai World Central.
In some cases, companies need no more assurance than that given by their contracts: "The companies are providing us with a security paragraph in the SLA which we feel is okay. So it's their responsibility if there's any security breach or anything else and they're saying 100% that there will be no security breach at all," says Saleh Al Habashi, head of IT for the National Corporation for Tourism & Hotels (NCTH) in Abu Dhabi, which uses Google's e-mail security.
However, SAAS vendors do have a major advantage in providing security, which is what is creating this reputation - economy of scale.
Put simply, a single company can only afford to invest so much in IT security whereas an SAAS vendor relies completely on being able to offer a secure service to its customers.
One security breach could spell the end for any web-based technology and SAAS providers are not just securing the data of one company.
"The biggest challenge for anyone in securing their data is in the trust they establish with their user community and how much control those individuals have," Martin explains.
"That can be an extremely complex set up for most on-premises software applications and in most cases never happens - so you have examples where a single individual has the entire history of a company's business on his laptop traveling throughout the world in a relatively insecure infrastructure."
For IT staff, the concern about web-based software has been how adoption of software service will affect their employment.
SAAS is basically a form of outsourcing in that the software is maintained by the external SAAS provider, so there is naturally some apprehension about job security, or at the very least, about how the role of the IT department would change after adoption of the SAAS system.
"I think that it's impacting IT in a very dramatic way. One of the fears of our customers when we talk about the fact that they don't need a whole lot of administrators or people in the back end that are running this, becomes job loss, for IT people their concern is does this mean that I'm going to lose my job?" says Philip Sidebottom, CEO of Navigis and partner in Zamil-Navigis, Middle East distributor of Servicenow.com.
"And the reality is that I see it in a different way. I see that what this is doing is it's freeing up IT personnel so that they can focus on the things that are most important to the business and that is essentially running IT as a business instead of doing back office work," he adds.
In fact, as Jonny Laughton, MEA director of e-mail security provider MessageLabs, puts it, SAAS can rescue IT staff from the role of an administrator: "We were with some customers yesterday in Kuwait and they have two people and all they do is focus on their spam problem - what a dull job for that guy to do!"
"And also, the company can use that guy for a more profitable project; put him on something more interesting and where he can add more value, because at the end of the day, having him filter the spam is never going to be as effective as us doing it."
Here in the Middle East and in other emerging markets where connectivity is either not as widespread or not as reliable as it could be, SAAS uptake could, on the surface, appear to be less of an option.
But most web-based technology providers would disagree with that assertion.
"Even in Western Europe, a lot of the benefit we offer with this is the fact that people can be mobile - you don't need to sit behind the firewall, you don't need to be in the office."
"Thinking about connectivity and making it safe and easy to rely on these solutions, even though you may not always have top-grade connectivity, is part of what we're doing," says Google's Frederikson.
Many SAAS solutions offer offline features, where information can continue to be entered while the connection is down, and that data will be uploaded and synchronized once the connection has been successfully re-established.
As well as this, few believe emerging markets will take long to catch up to the sort of connectivity found in more mature markets.
"The challenges will always be there but the enhancements are ongoing. It's already improving all over the world, the speed, the performance, now you can get 20Mbit/s internet by hundred dollar in some places in Europe and the US, in Japan now they're getting 1Gbit/s, in Korea they are getting 1Gbit/s access. 1Gbit/s is already more than enough to do a lot of things," says Khalid Al Massrey, senior IT manger at Dubai World Central.
Sidebottom agrees: "We see that worldwide there's a constant focus on improving infrastructure because we realize it's a global economy now and connectivity is the key to success worldwide, not just regionally."
With connectivity becoming less and less of a problem in the region and the other obstacles to SAAS uptake - security and the IT department - proving from early adopters' experience to be surmountable, at least so far, it seems as though little remains to stand in the way of SAAS becoming a mainstream technology.
MessageLabs' Laughton says: "We have seen a seismic shift in that mentality over the last two years, particularly, and absolutely massively over the last 12 months. Suddenly the objections we used to have, a lot of them have just disappeared. And there are several reasons for that.
"First of all, people read a lot of these analysts' reports now and most are absolutely 100% validating the SAAS model as opposed to doing it yourself, because it's more cost-effective, because the service itself is better, it's more effective and they're getting all the guarantees and so on. And because there are so many more customers, who are happy and don't leave, there's a lot of happy references to our sites," he claims.
That uptake is starting for a lot of web-based technology providers in the SMB market, according to Google's Frederikson: "It's obviously easier for a business with 20 users or 50 users to make this transition because they have less customization, they're probably less sophisticated and the benefits they're gaining are so massive and can be so obvious both from a cost perspective and an increased functionality perspective, that I would almost dare to say that it's a no-brainer."
But most SAAS pundits think that stronger uptake in the larger enterprise market is also not far off.
"Enterprise customers are not going to continue to pay top dollar forever when they know that there are viable solutions which are as good or better at a fraction of the cost. So those enterprise customers are going to start shifting towards the more affordable solutions like web on-demand offers," Sidebottom concludes.
Platform as a service
For Woodson Martin, vice president of EMEA, software as a service is only the beginning: "I think there is a trend we are starting to see globally which I believe will also be a very important trend in the Middle East, and that is the increasing interest in the use of platform as a service in addition to packaged software applications as a service.
A case example would be the Walt Disney Company in Florida, USA. They looked at a specific application they needed to manage character appearances.
So if you've ever been to a Disney property and seen a Mickey Mouse character walking around, they're very careful to ensure that you don't ever see two of them at once - that Mickey Mouse and Donald Duck don't collide, if you will, in the same space with another character of the same type.
So they have to manage the appearances of these characters carefully and they wanted an application to do that, but there is no commercial application available for that process. So they looked at building an application to manage that process on a variety of different platforms and they chose to competitively evaluate an SaaS platform and the.Net from Microsoft.
They put a project team on building a prototype of the application in each environment and estimating the total project and then actually completing the project on both platforms to see the difference.
They came up with an application that was fully functional, met all the requirements and was live within approximately a week on an SaaS platform, and they had an estimate for 3800 hours of development time to build out a limited scope version of that application on the .Net platform.
It's that kind of difference in what it takes to create new applications in this multi-tenet on-demand environment that is drawing the interest of CIOs, application architects and IT directors from around the world to take a closer look at platform as a service. and at software-as-a-service. So that's a big trend that we see starting to happen today which is beyond the packaged applications into looking at these custom business processes that folks can automate through an infrastructure like ours."
To learn how SEP Networks' NETGEN SaaS application can help your organization, please contact
Brandon Buckingham at (480) 278-8224 or brandon@sepnetworks.com.