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Loading ...Software at your service
By Joaquim P. Menezes -
I’d like to offer a few thoughts on the explosive growth of the software as a service (SaaS) business, but let me segue to that by first sharing an experience from the CIO Assembly event held this summer at Niagara-on-the-Lake, Ont.
A thought-provoking panel discussion on the final day of that conference titled: ‘Proactive CIOs and Knock-Out Technologies’ featured panelists from vastly different backgrounds – Eldon Amoroso, CIO of the London Police Department, Andrew Dillane, CIO of CNC Global and Hao Tien, CIO of Toyota Canada.
Each shared how their organizations were using IT to improve the way they do business and serve customers better. It was an eye-opening presentation.
When it came to the Q&A session, though, an audience member, while congratulating the speakers for the insights they offered, noted that there wasn’t anything new or “knock out” about the technologies they were implementing.
A few moments of embarrassed silence ensued, and then one of the panelists suggested that possibly the title of the discusison should possibly have been “knock out applications of technology.”
Today, he said, what gives an organization a leg up on the competition isn’t its rollout of a “hot” technology (there are relatively few of them out there) but the way the company applies that technology, and maps that application to its key business processes.
Essentially, that’s what industry experts are telling us today.
“The value of IT management software,” notes Ray Paquet, managing vice-president at analyst firm Gartner, “is not derived from its deployment. Rather the benefit comes from its use.”
And that observation goes to the heart of why SaaS is so big today. It’s because SaaS (in theory, at least) is all about helping organizations apply IT smartly, and apply it in a way that will unlock its value to the business.
In the SaaS delivery model, a vendor hosts and operates software applications (either independently or through a third-party) for use by its customers over the Internet. Customers don’t own the software itself, but pay for its use.
The most obvious advantage of this model is it allows companies to benefit from the software, without incurring the significant start up costs and risks involved in an inhouse deployment.
But as vendors have started to fine tune their SaaS offerings, the advantages go far beyond that, extending to improved project management, enhanced performance et al.
To emphasize these aspects, HP – which made serious forays into SaaS with its purchase, last year, of Mercury Interactive for $4.5 billion – has partitioned its SaaS business into various brands (Quality Centre, Performance Centre, Project and Portfolio Management Centre) each focusing on a different aspect of software as a service.
North American companies in every sector are realizing this the value of this model, which is why, according to IDC, the SaaS market is poised to experience a 32 per cent compound annual growth rate through to 2011. The market was worth around US$3.7 billion in 2006.
By 2007, the analyst firm said it will reach $14.8 billion.
Major vendors – including SAP, Microsoft, HP and Cisco – have recently announced key SaaS initiatives.
