Friday, October 27, 2006

Is the World Moving to Software as a Service?

A SaaS-y post from co-founder Barb Ewen...

This morning the Mass Technology Leadership Council hosted a session on Software as a Service (SaaS), moderated by Jeff Kaplan, managing director of THINKstrategies. Panelists included executives from a hospital, bank and a software company.

The discussion was a lively one and demonstrated the momentum underway for many vendors and enterprises to shift from a product/licensing model to Software as a Service. (Earlier this month, Gartner predicted that SaaS will grow to represent 25% of new business software revenue by 2011.) In particular, applications that would be more costly to deploy and constrain internal resources if either developed in-house or licensed, seem to be seeing success as a hosted service model. All of the panelists have turned to this model for applications such as facilities management, asset tracking and operational management. CHEN PR client Authoria, providing integrated talent management solutions for large enterprises, is moving its extensive customer base to leverage Authoria’s solutions as a service with great success.

Questions asked included how to measure performance with SaaS; rationalizing cost benefits over time versus a licensing model; whether having a choice is better than being “forced” into a service model; and who owns IP if SaaS is customized for a particular customer’s needs. The panelists all agreed that performance or outages had not been an issue and they were very satisfied with the service model for their particular requirements. While the momentum is clearly moving in many applications to SaaS, the consensus was that there remain applications that organizations would not be comfortable outsourcing. Certainly it will be fascinating to watch SaaS as it continues to evolve across small, medium and large enterprises.

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