More people in a greater array of business roles are giving SaaS the ol’ thumbs up.

We’ve established that the pursuit of SaaS is on the minds of *almost* everyone, but what is it about SaaS that gives us all the warm and fuzzies?  For the most part, SaaS is still a nascent industry.  It wasn’t long ago the purveyors of SaaS applications or enablement technologies were referred to as the tech industry’s “lunatic fringe”.  Strangely, the benefits of SaaS have emerged and shown a bright light on the future of all those involved in delivering software functionality to businesses.  So, what are these benefits? This may read like a SaaS 101 laundry list… but to see where SaaS is going, it might be best to take another look at the fundamentals.

For the Consumer:

• No client/server software installation or maintenance - that’s right, no more 800-page planning and implementation guides.
• Shorter deployment time - potentially minutes as opposed to a phased implementation that could take months (see item #1)
• Global availability - sure the technology exists to make on-premise software available outside of the premises, but we’re talking about functionality that is available from anywhere on the internet natively.
• Service Level Agreement (SLA) adherence - reported bugs can be fixed minus any rollout overhead.  Sure the provider actually has to fix the issue, but assuming they’ve deployed a moderately efficient SaaS application the rollout of a patch or fix should happen in the blink of an eye.
• Constant, Smaller, Upgrades - when you use a SaaS application, it is in the best interest of the provider to keep you happy and they can do so by constantly improving the application experience.  With SaaS this can come in the form of consistent miniscule changes that add up over time instead of monster patch and upgrades that cost you time and money to implement. 
• Ease Your Internal IT Pains - This is a big one. Most of the last several points here highlight that SaaS offloads a great deal of IT pains incurred by software consumers in the traditional client/server model.  This leaves IT personnel to focus on improving the day-to-day technical operations of your company instead of being called upon to troubleshoot 3rd party software or maintain aging infrastructure.  Which leads to…
• Redistribute IT Budget - by outsourcing software functionality to a provider, the enterprise realizes a cost savings in infrastructure requirements and IT personnel knowledge requirements.  This allows the enterprise to focus on core competencies.  It also means that the cost savings from using SaaS applications can be flat out saved, or reallocated to boost productivity through other services.

For the Provider:

• Aggregate operating environment - as a provider, you own your domain.  No longer are you sending technicians to fix or customize your software because it doesn’t fit into a customer’s highly-specialized (or horribly outdated) infrastructure.  You have complete control to optimize an infrastructure to your SaaS application’s specific requirements.  This is synergy at its best, and leads to financial savings as well as less headaches.
• Predictable Revenue Stream - the subscription model associated with SaaS means that your customers will pay you on a recurring schedule.  If you make this cycle flexible enough, you can get a real handle on forecasting revenues.  The payment may be tied to your product (think cell phone plans) where everybody pays according to the same term, or tied to your individual subscribers where some may pay monthly, some yearly, and some quarterly.  In my opinion, the more flexible you are with this piece of the offering the better.  Either way, because of the scheduled nature of cash inflow, revenue modeling becomes more reliable.
• Predictable Growth - Same as above, but here we’re talking about sheer volume of subscribership.  The fact that users hit your site to access the application means that with the right tools you can monitor their usage pretty closely - something that’s not so easy with all your customers running the application on premise.
• Focus On Smaller Upgrades Instead of Monster Patch Rollouts - and while you’re at it, don’t worry about rollout logistics across all of your customer sites either.  Your development teams can focus on fixing core application functionality, tackling bugs and enhancing features in smaller incremental rollouts because it’s just easier to do so.
• Sales Becomes Customer Relationship Management - When you are selling a subscribable service, the game of gaining subscribership becomes one of balancing user retention vs. attrition more than a game of landing the ‘big deals’.  Sure, it’s important to have a team out there pounding the pavement to sell your application - i.e. getting subscribers in the door - but the real thrust of the new sales and marketing in SaaS is customer relationship management.  The equation becomes quite simple - keep retention rates higher than attrition rates and focus on bringing in new customers. 

Adoption of the model has been growing at well over 20% year over year, Nick Carr says (paraphrased) that SaaS adoption is set to explode and reports that McKinsey & Co. will release a survey showing that 61 percent of CIOs at North American companies with sales over $1 billion are already planning to adopt one or more SaaS application.  Additionally he says that Deutsche Bank projected that the SaaS market will account for half of the application software spend by 2013, Gartner predicts that SaaS will triple in size by 2011 from 2006, Jeff Kaplan thinks SaaS adoption is underrated and the success of companies like SalesForce.com should be enough to convince even the most skeptical, but if all of this is still not enough and you are having trouble convincing your customers, your boss or yourself into adopting SaaS, here is a list of benefits to consider.

What do you think? Have you experienced other benefits already? On the contrary, have you experienced major drawbacks? We would love to know what’s holding you back or what has pushed you forward!

Many things in life tend to be mutually exclusive: you can’t drive a car and fly an airplane at the same time (not yet), you can’t be underwater and breathe (at least not without an apparatus) and you most certainly can’t talk and listen at the same time (believe me, I’ve been trying to perfect this for the longest time). Many will have you believe that Open Source and SaaS as a pair of business/distribution models also fall into this category. A simple Google search unearths a bevy of “Open Source vs. SaaS” information.  One thing is certain from my perspective: SaaS and Open Source are most certainly not mutually exclusive.

When looking at software business/distribution models I see a few important questions that need to be answered in order to understand the “source to market” relationship as well as the potential for exploiting different ways to generate revenue:

1. Who Built the Software?
2. Who Added Value to the Software?
3. How is the Software Distributed?
4. Who Wants the Software?

Understanding the choices for each of those questions can highlight what possible paths can be taken. Visually, these questions and potential answers can be captured as follows:

Based on this “source to market” stack, I find it very easy to treat the Open Source Community as one of the many implementation mechanisms for software, irrespective of how the software is distributed or who wants it.  I’m satisfied by the notion that how software is implemented has little bearing on how it can (and should) be distributed, hence allowing SaaS (a distribution model) and Open Source (an implementation/licensing model) to co-exist (If there is some insurmountable contention I’m missing, please do leave a comment!). An example (although not the best example) is SugarCRM: a community develops the open source core, SugarCRM adds value through more feature-rich versions, and the software gets distributed both on-premise and on-demand. If we lay a map over the previous diagram for a concept similar to SugarCRM, we arrive at this:

When building a business/distribution model, understanding the abstraction between interacting layers (or acknowledging that they exist) can be powerful. I think there is a lot of work to be done in creating a powerful “Open Source/SaaS Merged Model” (I don’t think Sugar has the best approach yet), but we should by no means use “versus” to describe their relationship. One thing we can all agree on is that many of these concepts are better than this:

Any thoughts or comments? Is a merger between the two not possible, or is it inevitable?

Posted by Sinclair Schuller

Software as a service is starting to gain favor for several reasons: It’s relatively easy and inexpensive to implement; it’s flexible; it doesn’t require as much infrastructure; and its costs are more predictable. Gartner predicts that 25% of new business software will be delivered as services by 2011, up from 5% last year.

Gartner estimates that software services accounted for 8% of CRM revenue last year and will jump to 12% this year.

There are a few fundamental truths about the IT industry one picks up along the way, but which can sometimes become hidden by the rapid innovation in technologies, and the complexities of delivering business outcomes in the real-world.

Any IT system that doesn’t respect the business operating model will always fail (although it may cost lots of money and take years to do so)

Just like any management discipline, IT strategy, planning and execution is more about spinning plates than juggling balls – it’s as important to know when to leave something alone as it is when to intervene

And so for all the inherent benefits of Software as a Service (SaaS) – the economics, the ubiquitous reach, the enhanced usefulness and the enhanced customer services – perhaps it is how the SaaS model helps or hinders these 3 truths that will ultimately determine its business value relative to other IT delivery models.

What’s interesting is we don’t have to look too far into history to see where we might end up this time.

Before we go a little further I want to declare a bias. No matter how one slices and dices a major business, it is just that – sliced and diced. Sliced and diced means management control in the slices and dices (the business units) – with varying degrees of freedom to act for sure – but still freedom to act by definition.

So, the evolutions of departmental computing and the networked PC helped the 3 truths because the slices and dices could act as they needed to (enabled by IT), they could communicate with other (and more importantly the centre could communicate with them), and they could be left to it without expensive ‘corporate IT’ getting in the way.

However, over time, the need for enhanced corporate compliance, cost control and re-engineered cross line of business processes to deliver efficiencies all kicked in, which is pretty much where the corporate IT function has been busy in bringing centralised IT control to operating models for the past 20 years.

What’s truly interesting is that individual and business unit SaaS use – which is currently on the rise – fans the flames of many of the old corporate tension points the CFO and CIO have been spending years trying to address.

So are we going to see central control kicking back-in again?

Intriguingly, the world isn’t like the world was when we had the networked PC and the departmental computer for one underlying reason – the Web. Today, the world has an unprecedented level of connectiveness – through globalisation and through the Web – and SaaS is based on the Web model from the ground up – i.e. we get to support the slices and dices and enable ease of communication (and therefore control, orchestration and information access) across units, employees, partners, customers, suppliers, the corporate centre and so on.

And while just as with any approach there are many challenges with the model, to my mind, the predicted rise of SaaS has been underestimated not only because of the obvious benefits, but perhaps more so because it serves the 3 fundamental truths of IT so well.

Are ‘per-business’ package and custom solutions no longer valuable? For sure they are valuable and for sure they will likely be of value in many circumstances for many years. But I wonder whether SaaS – particularly SaaS that supports Web 2.0 and Web 3.0 evolutions – is pointing the way to IT for the 21st century. And that its predicted rapid rise has been if anything undercooked.

When I bought my car, there was a lot I already knew. Having driven many cars, I knew where the steering wheel, radio, rearview mirror, etc. were and I knew that I could drive the car without a specific driving course, although to push the limit and understand how it would go 140 mph on a sweeping right hander would probably require a day at some race track. My wife on the other hand has to transport kids to the school and to soccer practice so her vehicle of choice is a minivan.

Now that I have shared with you some of the reasons how my family chooses cars, you may be wondering how this relates to SOA. Well, last week in a meeting with customers and prospects alike, I was getting questioned on selection criteria for ESBs and SOA infrastructure technologies.  And in nearly every conversation, the same criteria was clear - how many messages per second, how much memory, etc. etc., and only a few really came up with a statement such as "We are facing challenge X and would like to solve it?" This is the most important question because just like my car challenge of "sitting comfortably for long periods of time" outweighs the need to do 140 mph (which I have yet to do), if I bought a car that does over 150mph, it would probably be gone by now as it might not meet my primary needs. And lets face it, how fast do any of us really need to drive? Even the cheapest car on the market will do 80mph all day.

Using standards such as Web-Services, JMS, etc. also means that developers can apply the same disciplines to one technology as another - in much the same way that most drivers can switch cars. If it did not, Hertz and other companies would not be in business. Which brings me to the second theme of questions and comments I was getting, "What do my developers have to learn to be successful?" They have to learn to transition from one environment to another but still be able to apply the same core software engineering practices. For instance, you would not write all your business logic in one Java class so don’t do the same in one ESB process. In CORBA you would not make every object accessible, so why do you try to make every Java object a web-service?

SOA What? Buy the technology that makes sense for you and your business, e.g. if you are a distributed manufacturing organization build/buy a SOA that can be deployed and managed in a distributed manner.  If you are dealing in high volume transactions or events, you will, like a racing driver, need to look into performance. Once you have chosen your SOA technology, remember to still stop at red lights, and not to redline the engine at every gearshift. The speed limits may have increased, and you can break them later, but they still exist. And just like I would get special tuition to drive safely at 140 mph, remember to call on the experts of your SOA to drive at the limits.

Let us know if you have questions on SOA Products, we belive that we can help you (sales@crmit.com

The most common attempt I see is to think of the SOA lifecycle as "design time, runtime, change time".  But the problem is that even without SOA, everything IT builds still changes - so the notion of "change time" is really just part of the regular SDLC.  This model doesn't tease out the changes caused by SOA infrastructure.

Here's my latest attempt at clearly articulating how the SOA lifecycle is different than the traditional SDLC.

In a traditional SDLC, you can broadly say there are two phases:

• Pre-production (design, development, QA, etc.)
• Production (deployment, operation, etc.)

In a SOA lifecycle, though, there's a new lifecycle phase which fits between these: I call it pre-consumption.

What is pre-consumption?  It's a hybrid of pre-production and production - part of what's being built is in production (some of the services) and part is in pre-production (some of the consumers):

• To service providers pre-consumption looks like part of their production phase since their services are complete and operating in production.
• To service consumers pre-consumption looks like part of their pre-production phase since their consumer application is still being built.

No wonder we have such hard time defining the SOA lifecycle - to any one individual it looks just like their regular lifecycle.  But, when you look at it overall for any given application, you realize that different people are in opposite ends of the lifecycle at the same time.  This is the nature of pre-consumption.

Original Blog Entry from Progress Software Blog < Here > (Thanks to Daniel for Permissions)

We’ve been talking about SaaS for a long time, so it could be that it is entering fad status. There are articles everywhere about Using SaaS for ERP and CRM, but the licensing has still not caught up.

Organization’s perspective and acceptance of SaaS as a cheaper and more agile method to deliver value seems to be on the increase. SaaS should allow large companies to leverage leading edge business application capabilities immediately, without the same level of understanding in-house about the technical complications upgrades or concerns about IT infrastructure demanded by traditional software delivery approaches. It should free them up to think about what differentiates them from the pack.

There seem to be claims that SaaS will cure everything that’s wrong in an organization’s IT. There have even been efforts to create support groups for SaaS consumers. All of these seem a bit fad like to me, but there is always a hubbub of activity around the kernel of value for any fad.

For those businesses that choose to go it alone, the combined costs of hardware, software and skilled technical staff can be a real drag on profitability. Add in the cost of ancillary (but critical) functions such as disaster recovery and backup, and the total cost of ownership can quickly become burdensome.

But a hosted services model slashes up-front investments as well as ongoing service and maintenance costs, putting top-tier software solutions within reach of even very small companies.

All this activity, however, doesn’t mean the SaaS wave is poised to engulf traditional licensed software. SaaS’s share of the business application market today is more like a drop in the bucket. And enterprises have been slow to embrace SaaS, raising objections over reliability and availability.

Yet the arrival of the big enterprise-software guns, the emergence of integrated business communities in the cloud, and increasing desperation on the part of IT to minimize application deployment and maintenance hassles, suggest that SaaS is on the verge of much faster adoption.

By contrast, CRMIT and other SaaS providers incrementally swap in new functionality, streaming new innovations to all customers at once, keeping the UI as consistent as possible.

Yet the main attraction for SMB customers — letting a service provider shoulder the burden of software deployment, maintenance, and availability — can be a showstopper for large enterprises accustomed to maintaining full control. Not to mention that the huge cost sunk into existing CRM or ERP licenses becomes a whole lot tougher to justify.

SaaS has not been around as long as the traditional client-server model but over the last 5-7 years SaaS companies have made huge strides.

The fact that many Fortune 1000 companies are also adopting SaaS technologies means that no longer is SaaS geared for only the small businesses. Large corporations can also benefits from the low start up costs, quick deployment times, and ease of use. Imagine being able to deploy a SaaS technology quickly and efficiently across a single business unit as a test piece and then rolling the technology out on an enterprise level once the technology proves itself out. Little financial investment, little IT resources during implementation, very low risk. Why not?

SaaS has staying power and will not be going anywhere in the long term. It will continue to disrupt the traditional client-server model and revolutionize the way companies receive products and services in a real-time, cost-effective, scalable, and reliable manner.

“SaaS adoption is highest in applications that support simplified, common business processes or large, distributed virtual workforce teams,” said Sharon Mertz, research director at Gartner. “Ease of use, rapid deployment, limited upfront investment in capital and staffing, plus a reduction in software management responsibility all make SaaS a desirable alternative to many on-premises solutions, and they will continue to act as drivers of growth.”

“Major on-premises software vendors are re-architecting their application stacks to service-oriented architectures. Their customers will invest in migration for those processes that are complex or proprietary, but they also have an opportunity at this juncture to evaluate whether SaaS is an appropriate alternative for other aspects of their business,” Ms. Mertz said. “Small and midsize businesses that have insufficient resources to convert their applications will also find SaaS an attractive 21st-century solution to their legacy systems.”

Being on the road doesn’t have to mean being out of touch. CRMIT Mobile mobilizes your CRM, custom applications. That way, mobile professionals are always connected to their critical information—including contacts, accounts, tasks, leads, opportunities, cases, solutions, and other CRM information. And since users can update information immediately after completing a task, phone call, or email, management can stay on top of important customer developments as they happen.

CRM++ Mobile is more than just basic data on the go:

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At the same time, analysts are quick to note that not all CRM applications are ripe for mobilization. Rather, customers want mobile access to specific subsets of CRM data and functions.

For example, sales force automation (SFA) is one area that has long been a natural focus for mobile CRM, notes Gartner vice president William Clark. Enterprise asset management and field service automation are others.

"Field service management is getting a greater push, because it's simply more lucrative," he explains. "I've seen annualized ROIs of 100% to 500%."

Of course, mobile CRM isn't cheap. Gartner estimates that wireless field service, for example, costs about $4,500 per user for the first year, including hardware, network costs and software.

Getting over CRM's mobile hurdles

"More of the innovation is occurring with the mobile software players rather than with the large CRM players," observes Eugene Signorini, vice president of wireless/mobile enterprise solutions for the Boston-based Yankee Group. "Some of these larger ISVs [independent software vendors] don't have the capability in terms of an application design for various form factors and devices."

And there are other technical problems to overcome, including making the CRM application accessible over non-broadband, wireless networks and addressing security issues such as providing VPN clients, virus protection and methods for securing the device if it's lost.

"Vendors are solving these problems, though. We're seeing a lot of activity out there," says Signorini.

Another issue is that the application needs of mobile CRM users are usually very different from the needs of internal employees. Mobile workers require only a stripped-down subset of the data and functions of the main sales force, field service or other CRM application.

So that subset tends to be highly focused and extremely valuable to them. Take for example, Symetra Financial, a Bellevue, Wash.-based financial services firm. Symetra's 30 external wholesalers — sales and support representatives who call on Symetra's 20,000 to 30,000 independent insurance agents across the U.S. — rely on their Blackberries to look up addresses and notes on agents they're visiting. The devices provide real-time access to Symetra's Onyx database.

"It's the core functionality that's important — looking up names and addresses, integrating that with Mapquest to get a map and directions, then calling them on the Blackberry. They can do all of this now without even pulling over," says Dave Batterberry, senior IT analyst for Symetra.

The wholesalers also use the Blackberries to update customer accounts and to input notes about their visits. Having a real-time link to the corporate database ensures that everyone, both internal and external, has the most current data.

"They can enter this stuff right from the agent's office," says Batterberry.

Whether 2006 proves to be "the year of mobile CRM" is still a topic of debate. But clearly it marks the beginning of a steady upward adoption curve. Both Signorini and Clark see it as a market with plenty of healthy growth ahead.

"Even in industries where mobile is hot, like field service, the penetration rate is well under 15%. So over the next five to 10 years, there's really no end in sight to the growth," says Clark.

We @ CRMIT are experts in CRM Field. Please visit www.mcrmonline.com for more information.