An Overview of SaaS – And some privacy questions

An Overview of SaaS –And some privacy questions

Based on work by Julie Smith David and Michael T. Lee, sponsored byCABIT and the Society for Information Management

AgendaGathering for the perfect storm?

frustrationeconomy acceptance

Stage 1: Introduction to SaaS

Stage 2: Privacy Issues

Gathering for the “Perfect SaaS Storm”?

the economy

the economyfrustration

End-user frustration with ERP applications often drives a business' first post-ERP projects. At Amoco's chemical intermediates group, for example, the need to channel SAP R/3 information into more user-friendly applications became apparent as the ERP system was being implemented early last year, says Kerry Given, IT manager for the unit. "Managers found SAP so unfriendly they refused to use it," he says. "Few [of our] people use SAP directly because you have to be an expert." November 30, 1998

the economyfrustration

acceptance

the economyfrustration

acceptance

the economyfrustration

acceptance

It’s time to take SaaS seriously!

Photo is by LeibDich, available at http://www.flickr.com/photos/liebedich/3679711527/, and used under the CreativeCommons license

Gathering for the perfect storm?

Let’s go deeper into SaaS

frustrationeconomy acceptance

Stage 1: Introduction to SaaS

Supply Chain Representation:Traditional Model

Your Company

HardwareCompany

SoftwareCompany

PC’s, Servers, Network Devices, …

Operating systems, ERP, CRM…

SaaS Company

Supply Chain Representation:SaaS Model

Your Company

HardwareCompany

SoftwareCompany

Servers, Network Devices…

Operating systems

PCs (with Browsers)

ERP, CRMService

Client Company

Client Company

Client Company

A Quick Review:SaaS Characteristics

• Technical– Browser based:

• Reduced upgrade issues• Lower cost hardware

– Hardware acquisition, operations, maintenance

– Multi-tenant– Agile development

• Maintenance experience• Innovation

• Strategic– Low initial acquisition

costs– Quicker Implementations– Predictable pricing– Reduced support staff

needed– Potentially more agile

environment with significant innovation

How Multi-Tenancy works

Source: Peter Coffee, Salesforce.com

Source: Peter Coffee, Salesforce.com

PaaS Company

PaaS Model

Your Company

HardwareCompany

SoftwareCompany

Servers, Network Devices…

Operating systems, ERP, CRM…

PCs (with Browsers)

Service

Client Company

Client Company

Client Company

NativeDevelopers

CompositeCompany

PaaS to Preferred PlatformDe

velo

pmen

t Effo

rts

Size of Adopting Organization

Indi

vidu

alAp

psCo

mpl

exSu

ites

Individuals Small Mid-Tier Large

Inte

g.Ap

psN

iche

Suite

sSm

allDevel.

Major

SW Co.

Ind-M

idInd. Leader,N

iche SW

Software Developm

ent Organizations

Created with Brian Sommer

Proposition: SaaS is a Disruptive Technology

Source: Mann and David, 2007. For more, see:Harrigan, K. R. 1984. Formulating Vertical Integration Strategies The Academy of Management Review 9 (4):15.Rothaermel, F. T., M. A. Hitt, and L. A. Jobe. 2006. Balancing vertical integration and strategic outsourcing: Effects on product portfolio, product

success, and firm performance. Strategic Management Journal 27:1033-1056.

When/Why to Select SaaS (Updated)

Source: http://blogs.idc.com/ie/wp-content/uploads/2009/12/idc_cloud_benefits_2009.jpg

New Reasons• Commoditization of IT

– IT applications are available for almost anything

– Leave it to the hands of experts– Comes down to the decisions and how it

is used• New leverage for knowledge

– SaaS can be used to push out legacy data and information to create and distribute knowledge globally at minimal incremental cost

• Upgrades– Small time window, cost included in

subscription– No hardware, software, patches, space

requirements– Upgrade process

• Elastic scalability– Instant– Integratability/

Interoperability– Customizable/Programmable

• Shared infrastructure– Functions are at the

metadata level, not at the code level (airline model)

– Industrial strength infrastructure, allowing customization at the metadata level

Issues/Challenges

http://blogs.idc.com/ie/wp-content/uploads/2009/12/idc_cloud_challenges_2009.jpg

AgendaGathering for the perfect storm?

frustrationeconomy acceptance

Stage 1: Introduction to SaaS

Stage 2: Privacy Issues

What we already touched on:

Source: Prosch, M. and J.S. David. 2009. Extending the Value Chain to Incorporate Privacy by Design Principles

An integrated “X as a Service” stack

Source: Linthicum, D. 2009. Cloud Computing and SOA Convergence in Your Enterprise: A Step-by-Step Guide. Addison-Wesley Information Technology Series.

With XaaS Proliferation

Source: Prosch, M. and J.S. David. 2009. Extending the Value Chain to Incorporate Privacy by Design Principles

OPERATIONALMODALITIES Programs Goals Resource

Allocations

Corporate Culture

Fiscal Viability

Expectations

Compliance

Community Involvement

Environmental Improvements

Economic Benefits

Education SupportOUTCOMES

Create a Privacy Culture, Cavoukian, 2008

Privacy Payoff,Cavoukian & Hamilton, 2008Customer Churnrate, Ponemon 2007

Privacy Cultural Lag Theory, Prosch 2008

FTC SanctionsState Attorney GeneralsEU Safe Harbor

Privacy Policies Chief Privacy OfficerPrivacy Enhancing Technologies

Privacy AuditPrivacy Maturity Lifecycle, Prosch 2008

Privacy Payoff, Cavoukian & Hamilton, 2008

Reducing data pollution:Reducing identify theft risk,Unnecessary workplaceMonitoring, cyberbullying, etc.Educating customers/employees

Rights & obligations in process

Allowing constituents a “voice” in privacy design

Nehmer & Prosch 2009Model of Privacy Corporate ResponsibilityBased on Dillard & Layzell’s 2008 Model

MOTIVATINGFORCES

Privacy by Design Principles

Respect for User Privacy

Visibility and Trans-

parency

End – to – End

Lifecycle

Positive Sum –

Not Zero Sum

Privacy Embedded into Design

Privacy as the Default

Proactive vReactive

Questions -

For Ben!

Please Keep In Touch!julie.smith.david@asu.edu

michael.t.lee@asu.edu

Really?• Security?

– Compared to what?– Facility/network– Privileges– SAS 70, SysTrust, ISO 27001

• Availability/Performance?– Operational reporting– Dealing with abnormalities– Uptime reality– Transparency: Dashboards

• Cost more?– Predictable– Hardware, software, upgrades,

recovery, security, space– Up to 5X faster development

• Integration difficulty?– Proliferation of integratable and

customizable applications – Standard development platform– IaaS, PaaS

• Customizability?– Proliferation of customizable

applications – Comprehensive tool sets– Shared infrastructure– Upgrade process

• Vendor lock in? Survivability?– Proprietary languages/technologies– Switching costs– API’s, ETL tools– How different from ABAP?

Source: Peter Coffee, Salesforce.com