6th September 2006Confidential to Ian Mitchell1 Software As A Service - SaaS Ian Mitchell, FNZCS.

6th September 2006 Confidential to Ian Mitchell 1

Software As A Service - SaaSSoftware As A Service - SaaS

Ian Mitchell, FNZCS

6th September 2006 Confidential to Ian Mitchell 2

What is SaaS? - What is SaaS? - WikipediaWikipedia

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.

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Key CharacteristicsKey Characteristics

• Network-based access to, and management of, commercially available (i.e., not custom) software

• Activities that are managed from central locations rather than at each customer's site, enabling customers to access applications remotely via the Web

• Application delivery that typically is closer to a one-to-many model (single instance, multi-tenant architecture) than to a one-to-one model, including architecture, pricing, partnering, and management characteristics.

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Variations Variations – Deprecated Terminology– Deprecated Terminology

• ASP – Application Solutions Provider• Not just web front-ends – SAP, Oracle• Turnkey rather than tailored - LiveUpdate• Way to deliver BPO services• Often billed per user per month• Typically not hosted in house – but maybe• Pure utility model – pay for what you use• Software on Demand.

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Definition of the DayDefinition of the Day

• Hosted remotely (typically in a web farm)

• Web front end only

• AJAX – HTML, JavaScript• Back end – Database• Usually multiple users – different legal entities

• Billing – Per user per month or similar.

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AdvantagesAdvantages

• No large upfront costs - usually free trials• High levels of security – physical, power, pipes

• No install costs – low one-time costs

• Minimal training• Anywhere, anytime, anyone - mobility• Operating costs only; can be terminated; re-

sized – No capex hoops.

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DisadvantagesDisadvantages

• Core functionality out-sourced• Broadband risk• Limited personalisation/tailoring• No competitive uniqueness advantage• Not suited to high volume data entry.

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New Business ModelsNew Business Models

• Mobile models – any PDA• Deliver to screen format in use

• Working out-of-office – Real Estate Agents

• Salespeople who visit the client• Build the plan and place the order there

• Hot-desking• Virtual Organisations• Franchise models.

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EnhancementsEnhancements

• Introduced silently• Only when multiple clients clearly want them• In a way which does not impact other users• No “roll-out”• Simple conversational interface• Irrelevant if all users not on same OS• Minimum development costs – test on single O/S.

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Open SourceOpen Source

• Not a particular issue• But why use the products of a company

which fundamentally opposes this approach?

• Why pay more?• Will you ever know?

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24/724/7

• Why ask for 24/7? Do you need it?• 23.5 x 6.5 much, much cheaper.• Expensive: Dual servers; special storage• Do these apps need it?• They are not your ERP apps.

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Whose doing it?Whose doing it?

• Google – complete Java library

• Writely and spreadsheet• Salesforce.com and CRM are hot• Oracle and SAP have web interfaces• BI to have web interfaces• Web shopping sites are SaaS now• Most mobile apps are actually SaaS now.

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ScreenshotsScreenshots

• SalesForce• NetSuite

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Cost of Roll-OutCost of Roll-Out

• Was 1 SysAdmin per 30 PCs + 1/50 thereafter

• Now better with Ghost and similar• Then Citrix• Virtualisation• Cost of tailoring each user’s package options

• Now done from any PC by privileged user• $1500 per PC to <$99!

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Cost of trainingCost of training

• Web forms and conversational modes• Simpler forms – less data intensive• Confirmation of each step• Help actually there• Product must be easy to use – or it won’t survive

the free trial• Collaborative• Comfort because I can see the data.

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Value to SMEsValue to SMEs

• Smaller enterprises have an easier road to adoption and installation

• Need minimal (No?) technical staff• More work from home• More work on the street• More work while traveling! New inflight options!

• SMEs are 80% of . . . Your market!

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Ease of MaintenanceEase of Maintenance

• Because there is only one copy of the software maintenance is substantially eased

• The software only runs in one environment – an environment totally controlled by the supplier

• IE and Mozilla – damn!• Reduced operating costs.

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Reduced Hardware CostsReduced Hardware Costs

• A single server handing multiple customers can be optimised – no extra peripherals – no CRT.

• Mass storage optimised• No need for virtualisation• Rack mounts• Minimum cabling - at both ends.

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Myths Myths Jeffrey KaplanJeffrey Kaplan

• 1. Saas is still relatively new and untested.• 2. SaaS is just another version of the failed ASP

and hosting models of the past and will suffer the same fate as its predecessors.

• 3. SaaS only relieves companies of the upfront costs of traditional software licenses.

• 4. SaaS is only for small and mid-sized businesses and will not be accepted by large-scale organisations.

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Myths Myths Business Week OnlineBusiness Week Online

• 5. SaaS only applies to applications such as CRM and Salesforce automation.

• 6. SaaS will only have a minor impact on the software industry and will fade over time.

• 7. It will be easy for the established software vendors to offer SaaS and dominate this market.

• 8. SaaS is only for corporate users.

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ConclusionsConclusions

• SaaS will be the way most apps will be delivered – not unique competitive advantage s/w

• All but high-volume data entry for large corporates and specialised apps

• Much higher proportion of staff will have only PDAs or small footprint notebooks

• Low risk – try b/4 you buy – get the CxO ticks.

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Thank YouThank You

• Ian Mitchell, FNZCS• e:[email protected]• http://www.SoftwareAsAService.co.nz• http://www.AboutIT.co.nz• http://www.Mitchell.co.nz