SaaS Model in economic downturn

By Jitendra Maan

Agenda

Demystifying SaaS Comparing SaaS with Traditional packaged software Evolution of Software-as-a-Service onDemand consumption Model SaaS Trends/Projections by lead analysts Benefits of SaaS based delivery model SaaS architecture shift Key barriers to SaaS Adoption Integration – The Achilles heel of SaaS Integration as a Service Platform-as-a-Service Key elements of SaaS application

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SaaS

www.Wikipedia.com

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. SaaS is a model of

software delivery rather than a market segment; software can be

delivered using this method to any market segment including small

business, medium and large business.

A SaaS is built from the ground up to be multi-tenant at all layers of the

stack: database, server, and application. All users run the same code,

with customizations and configurations stored as metadata parameters.

SaaS is sold on a subscription or term license basis that includes

upgrades, maintenance, and typically some level of support. SaaS is

usually delivered by the software creator“ Source Forrester

Computer based applications and services deployed as a hosted

service and assessed over internet rather than a packaged product

purchased and installed by end user

Software-as-a-Service

Software-as-a-Service (continued..)

On-Demand Consumption Model

Old

Model

New

Model

Service Delivery Model

In-house platform Labor Intensive

On-Demand Technology driven

Architecture Monolithic Client/Server Legacy Non-standard

Integrated Service oriented Architecture Standardized

Payment Pay in Advance High CapEX

Pay as consumed

SaaS Trends/Projections by Lead analysts

Industry analyst firm Gartner predicts that by 2011, software revenue from SaaS will reach $11.5 billion. From 2007-11 the growth rate of SaaS will double that of enterprise software as a whole

Over 50% of VC funded software companies are building SaaS applications and the percentage is growing.

A study from Saugatuck Research indicates an 84% customer satisfaction rate for SaaS applications.

By 2010, 40 percent of traditional on-premise application ISVs will bring to market SaaS solution offerings, either via acquisition, development of new single-instance multi-tenant applications, or through virtualized (multi-tenant) versions of their traditional on-premise offerings. Less than half of the ISVs in transition will actually succeed.

By Y2009, greater than 55% of North American-based businesses will have deployed at-least one SaaS application, with Western European close behind at greater than 40 percent. 

SaaS Trends/Projections by Lead analystsWorld wide SaaS market by 2009 will be $10.7 Billion

Benefits – SaaS based delivery Model

Key benefits of SaaS

- Low Total Cost of Ownership by shifting ownership

- Lower Capital & Operating cost

- Pricing based on usage- Uptime as a key factor

Reduce Time-to-market cycle and better ROI (Return On Investment)

- Reduced business risk- Reduce IT complexity

- Development-as-a-Service- Centralized authentication

system

- Rapid Deployment cycles- Greater Flexibility & Ease

of use

- Multi-tenancy based architecture

- Democratized configuration

Integrated Service delivery Model and quick rollouts

SaaS Architecture shift

Multi-tenant efficient

Configurable

Scalable

The major benefit of multi-tenancy is cost effectiveness. Sharing software, hardware, application development, and maintenance costs between tenants can lower the costs for each tenant. Furthermore, sharing a single instance of an application between tenants can provide additional benefits, for example, all tenants can be simultaneously upgraded whenever the application is upgraded.

Technical challenges with SaaS based multi-tenant applications

Access control Customizability, configurability User interface Variations in tenant requirements Business logic Tenant provisioning Usage based metering Scalable architecture

Integration – the Achilles heel of SaaS

"There's an expectation gap in the market," says Rob Bois, senior research analyst for AMR. Companies, he says, believe that "the on-demand model eliminates the up-front cost and effort required in implementing a CRM system; that it's just like turning on a switch. But the integration .. requirements are not that dramatically different from traditional software when you get into more complex implementations. There's still a lot of work involved."

Integration-as-a-Service is a delivery model which takes the functionality of system integration and puts it into the cloud, providing data transport between enterprise wide systems and third parties (suppliers and other trading partners) on-demand.

Integration-as-a-Service - Takeaways

Integration remains the largest obstacle to wide-spread SaaS adoption, particularly in larger enterprises

An XML API does not “solve” Integration Traditional Integration vendors don’t “fit” Integration “Solution” must be strategic

Plan Integration architecture from the beginning Find tools that match the agility and economics of SaaS

Platform as a Service (PaaS) is a platform to create business applications entirely on-demand without software. With PaaS users can not only build applications but also share and run the business applications. This provides global infrastructure for database, logic, workflow, integration, application distribution and interface.

Platform-as-a-Service

The Three Legs of “Platform-as-a-Service”

Three Lags of PaaS

SaaS Enablement

Cloud Infrastructure

Cloud Development

Key elements of successful SaaS application

Robust Extensible Architectur

e

Security

Metering and billing

Interactive user experience

Customization and configuration

Scalability

Multi-tenancy and Shared infrastructure

Monitoring of service quality

Robustness, scalable