As the computing era dawned, even huge corporations never imagined they could actually own a computer. Indeed Thomas Watson founder of IBM even went so far as to say that he did not believe the world needed any more than 5 computers. As usage increased, it was through the use of bureau services, where companies would lease the services provided by the computer behemoths.
Today the age of the bureau is coming again in the guise of Software as a service. This means that companies are opting to lease services to perform functions that, while critical to their business, are not actually what they are specialist in.
The definition of SaaS as per Wikipedia is as follows; Software as a service (SaaS) is a software application delivery model where a software vendor develops a web-native software application and hosts and operates (either independently or through a third-party) the application for use by its customers over the Internet. Customers pay not for owning the software itself but for using it. They use it through an API accessible over the Web and often written using Web Services or REST. The term SaaS has become the industry preferred term, generally replacing the earlier terms Application Service Provider (ASP), On-Demand and " Utility computing".
Key SaaS offerings
A new forecast by Gartner has SaaS dominating the market by 2011. The Gartner report predicts an annual growth rate of 22.1% through 2011, more than double the growth expected in the overall enterprise software market, with well over half of software infrastructure products and software applications being available in software-as-a-service delivery by then.
Translating these percentages into revenue we get, worldwide total software revenue for software as a service (SaaS) within the enterprise software markets is projected to surpass $5.1 billion in 2007, a 21 percent increase from 2006 revenue. The market is poised for strong growth through 2011, when worldwide revenue will reach $11.5 billion
Key offerings for SaaS
So what type of applications, should companies bee looking at to deploy as Software as a Service? - Sales and marketing services – CRM
- Accounting Services
- Enterprise content management (ECM
- Search
- e-learning
- Web conferencing
- Digital content creation
- Office suites
- Enterprise resource planning (ERP)
- Supply chain management (SCM).
- Service Automation
- Compliance, risk management,
- Procurement optimization
- Small integrated business systems
- Payment Processing
- Scientific applications requiring High Performance
Some Irish SaaS Companies
Irish Software companies have embraced the view that SaaS will become a force to reckon with on the world software stage.
Enterprise Ireland has recognized the huge importance of SaaS in so far as it organized its second annual conference in June of this year. The summit focused on how to design, develop, deploy, scale, as well as market and sell on-demand software. The day included real-life case studies and learnings from Irish companies interspersed with keynotes from US representatives, analysts and journalists.
I have summarized a few Irish companies and their offerings below in alphabetical order. Please note that this list is intended to be indicative of the types of offerings that are provided and is not intended to be comprehensive or fully inclusive. - CashCollector provides an electronic invoicing and automated collections system, which delivers savings in any accounts receivable department.
- CREMe Software's tools provide Government regulators, safety authorities and manufacturers of food and personal care products, with the unique ability to accurately evaluate population exposure levels to nutrients, additives, packaging migrants, pesticides and chemicals. www.cremesoftware.com
- iQuate provides an integrated software suite that enables managed services, IT asset management, infrastructure monitoring and service desk provision. www.iquate.com
- LeCayla Technologies enables software publishers to quickly and easily introduce SaaS pricing. LeCayla delivers a metering and billing infrastructure for packaged software applications. It allows software publishers to deliver products using any pricing model or any mix of pricing models such as perpetual licensing or pay-per-use. www.lecayla.com
- NetTeam provides a new business process, workflow and collaboration environment for enterprise-class and SME applications. It offers people, project, task and document management services and has a powerful API to support customization for role/task based workflows. www.netteamconsulting.com
- Openplain provides a web and PC tracking tool to record how much time employees spend performing electronic tasks. They can use the system to rate their personal productivity levels and help pinpoint any possible inefficiencies in their working day. Managers can use the system to track their teams' productivity metrics. www.openplain.com
- Saaspoint, primarily an Irish services company specialises in the development of industry specific and vertical applications for the AppExchange, which is the vehicle that salesforce.com uses to facilitate development of complimentary CRM applications. This development is carried out for customers who wish to make their applications available on the AppExchange platform. www.saaspoint.com
- Twinfield provides Irish Small Business with a complete accounting solution using SaaS www.twinfield.com
Why should an Irish Software Company offer a SaaS version?
The most obvious benefit would be to gain incremental revenue from new and existing customers. Additional factors would include; - Increased margins since the cost of sale and support is significantly reduced and once you have gained a customer selling them additional seats and upgrades is much simpler since they are always connected to you.
- Access to new markets since the main sales and delivery vehicle is now the web and it is very easy to set up demo accounts for people to try it.
- Shorter sales cycles since there is less associated expenditure for the client company in relation to infrastructure costs and set up.
- Enhanced customer information since all users are now accessible from one place and it is much easier to track and manage customer's requirements and demands.
What benefits should an Irish Company look for when considering a SaaS offering?
It is interesting to note that how a company will actually obtain value from SaaS will differ sector by sector and every situation is unique. This having been said there are some common attributes that should assist a company in determining the value in going down the SaaS route.
All buyers should always complete a detailed return on investment analysis for any new solution. It is important, however, not to be caught up and purchase a solution because it is a fad, similar to the way many companies fell victim when client server era was new.
Once you have decided that you require a solution and that you not only know what problem the solution will solve, but you also clearly know what the new solution will enable your business to do and how you can put a value on that, you should ask your self the following nine questions. - Will the new solution provide me with simplified or common business processes?
- Do I have large, distributed virtual workforce teams, where it is important that they are all working and collaborating using the same software and centralized reporting is important?
- Would this solution serve as an alternative replacement for legacy systems, reducing the cost of maintaining them and reducing infrastructure spend?
- Will this new way of working be easy to use and does a web based solution make sense for my staff. In some cases lack of sufficient bandwidth or broad band for selected groups of the workforce could rule out a SaaS solution?
- Will there be substantial benefits from rapid deployment?
- Will the deployment of a standard solution reduce learning curves and simplify training on the new application?
- Will the limited upfront investment in capital and staffing outweigh the advantages of having a bespoke solution for my needs?
- Will rollout of the new solution result in a reduction in software management responsibility?
- Does the solution provider deliver embedded service management?
Conclusion
Like it or not, we have returned to the era of the mainframe or service bureau concept, with large concentrations of computing power serving many companies needs. Software as a service, in what ever guise we decide to call it will grow significantly. Just as we are able to plug any electrical appliance into a socket in the wall and do what ever the appliance is designed for, the use of software applications should finally start to become that easy to use and deploy.
About the Author – Peter Lawless
Founder of 3R Sales and Marketing, www.3r.ie Peter Lawless is a Coach, Mentor, Sales and Marketing expert, Author and TV presenter. With phenomenal experience in growing large and small companies, he has significant experience both nationally and internationally. Peter Has led European divisions with Fortune 10 companies as well as growing start-ups to multi-million dollar companies.
Peter is a Fellow and council member of the ICS and the Sales Institute of Ireland, a member of The Marketing Institute of Ireland, the Irish Software Association, the local chamber of commerce and the Irish Internet Association. He is also a Mentor with Enterprise Ireland and an External Examiner at DIT Kevin Street.
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