Software As A Service - SaaS

Ian Mitchell, FNZCS

6th September 2006

Confidential to Ian Mitchell

What is SaaS? - Wikipedia

Software as a Service (SaaS) is a model of Software Delivery where the software company provides maintenance, daily technical operation, and support for the software provided to their client.

6th September 2006

Confidential to Ian Mitchell

Key Characteristics
Network-based access to, and management of, commercially available (i.e., not custom) software Activities that are managed from central locations rather than at each customer's site, enabling customers to access applications remotely via the Web Application delivery that typically is closer to a one-to-many model (single instance, multi-tenant architecture) than to a one-to-one model, including architecture, pricing, partnering, and management characteristics.
6th September 2006 Confidential to Ian Mitchell 3

Variations Deprecated Terminology

ASP Application Solutions Provider Not just web front-ends SAP, Oracle Turnkey rather than tailored - LiveUpdate Way to deliver BPO services Often billed per user per month Typically not hosted in house but maybe Pure utility model pay for what you use Software on Demand.
Confidential to Ian Mitchell 4

6th September 2006

Definition of the Day

Hosted remotely (typically in a web farm) Web front end only AJAX HTML, JavaScript Back end Database Usually multiple users different legal entities Billing Per user per month or similar.
6th September 2006 Confidential to Ian Mitchell 5

Advantages
No large upfront costs - usually free trials High levels of security physical, power, pipes No install costs low one-time costs Minimal training Anywhere, anytime, anyone - mobility Operating costs only; can be terminated; resized No capex hoops.
Confidential to Ian Mitchell 6

6th September 2006

Disadvantages
Core functionality out-sourced Broadband risk Limited personalisation/tailoring No competitive uniqueness advantage Not suited to high volume data entry.

6th September 2006

Confidential to Ian Mitchell

New Business Models

Mobile models any PDA
Deliver to screen format in use

Working out-of-office Real Estate Agents Salespeople who visit the client
Build the plan and place the order there

Hot-desking Virtual Organisations Franchise models.

6th September 2006 Confidential to Ian Mitchell 8

Enhancements
Introduced silently Only when multiple clients clearly want them In a way which does not impact other users No roll-out Simple conversational interface Irrelevant if all users not on same OS Minimum development costs test on single O/S.

6th September 2006

Confidential to Ian Mitchell

Open Source
Not a particular issue But why use the products of a company which fundamentally opposes this approach? Why pay more? Will you ever know?

6th September 2006

Confidential to Ian Mitchell

10

24/7
Why ask for 24/7? Do you need it? 23.5 x 6.5 much, much cheaper. Expensive: Dual servers; special storage Do these apps need it? They are not your ERP apps.

6th September 2006

Confidential to Ian Mitchell

11

Whose doing it?

Google complete Java library Writely and spreadsheet Salesforce.com and CRM are hot Oracle and SAP have web interfaces BI to have web interfaces Web shopping sites are SaaS now Most mobile apps are actually SaaS now.
6th September 2006 Confidential to Ian Mitchell 12

Screenshots
SalesForce NetSuite

6th September 2006

Confidential to Ian Mitchell

13

Cost of Roll-Out
Was 1 SysAdmin per 30 PCs + 1/50 thereafter Now better with Ghost and similar Then Citrix Virtualisation

Cost of tailoring each users package options

Now done from any PC by privileged user $1500 per PC to <$99!

6th September 2006 Confidential to Ian Mitchell 14

Cost of training
Web forms and conversational modes Simpler forms less data intensive Confirmation of each step Help actually there Product must be easy to use or it wont survive the free trial Collaborative Comfort because I can see the data.
6th September 2006 Confidential to Ian Mitchell 15

Value to SMEs
Smaller enterprises have an easier road to adoption and installation Need minimal (No?) technical staff More work from home More work on the street More work while traveling! New inflight options! SMEs are 80% of . . . Your market!
6th September 2006 Confidential to Ian Mitchell 16

Ease of Maintenance
Because there is only one copy of the software maintenance is substantially eased The software only runs in one environment an environment totally controlled by the supplier IE and Mozilla damn! Reduced operating costs.
6th September 2006 Confidential to Ian Mitchell 17

Reduced Hardware Costs

A single server handing multiple customers can be optimised no extra peripherals no CRT. Mass storage optimised No need for virtualisation Rack mounts Minimum cabling - at both ends.

6th September 2006

Confidential to Ian Mitchell

18

Myths Jeffrey Kaplan

1. Saas is still relatively new and untested. 2. SaaS is just another version of the failed ASP and hosting models of the past and will suffer the same fate as its predecessors. 3. SaaS only relieves companies of the upfront costs of traditional software licenses. 4. SaaS is only for small and mid-sized businesses and will not be accepted by large-scale organisations.
6th September 2006 Confidential to Ian Mitchell 19

Myths Business Week Online

5. SaaS only applies to applications such as CRM and Salesforce automation. 6. SaaS will only have a minor impact on the software industry and will fade over time. 7. It will be easy for the established software vendors to offer SaaS and dominate this market. 8. SaaS is only for corporate users.

6th September 2006

Confidential to Ian Mitchell

20

Conclusions
SaaS will be the way most apps will be delivered not unique competitive advantage s/w All but high-volume data entry for large corporates and specialised apps Much higher proportion of staff will have only PDAs or small footprint notebooks Low risk try b/4 you buy get the CxO ticks.
6th September 2006 Confidential to Ian Mitchell 21

Thank You
Ian Mitchell, FNZCS e:Ian@Mitchell.co.nz http://www.SoftwareAsAService.co.nz http://www.AboutIT.co.nz http://www.Mitchell.co.nz

6th September 2006

Confidential to Ian Mitchell

22