This paper will address some of the questions commonly raised by SMART Consultant customers in regards to converting from in house computing to internet, cloud based, computing using software as a service (SaaS). Furthermore it will provide the basic knowledge needed to perform an analysis of their business to determine if SaaS is an appropriate model. First we will review what software as a service is.
The traditional model of procuring software and installing it on your local computer is called software as a product. Conversely the software as a service model provides users access applications online as needed. Users require only a compatible web browser and suitable internet connection to use the software. The idea that users could access applications, at any time, from anywhere, through a global network dates back to the sixties. This concept has come to be known as cloud computing and it is the concept that is the foundation for SaaS.
Today the SaaS market is growing at an astonishing pace inspiring many companies to take a look at SaaS as a new model for doing business (figure 1). When contemplating the use of any SaaS application, product features, risk, legal, cost and management are all areas that should be reviewed. We will briefly cover each of these and address the common concerns surrounding each.
New SaaS products may need to operate within the company’s existing business model. As an example let us look at the basic need of most businesses for a word processing application. Historically this market has been dominated by Microsoft Office with over a 94% market share . Google Docs is a leading SaaS competitor with less than 2% of total market share and little sign of that changing. With this in mind it is important to ensure that any SaaS application a company uses be compatible with its traditional counterpart. Google Doc does provide a feature for importing and exporting documents to MS Word format to accomplish this.
Google Doc also brings several new features to the table to make it worth considering. One is its ability to allow workers to preform work from anywhere. Another productivity advantage may be its cooperative tool suites. For example, Google Docs allows users to work on the same document simultaneously. To determine if an advantage can be realized from features such as these companies should review their individual business model.
Whatever the advantages are they must be balanced with the risk of using SaaS applications. Three of the top risks associated with SAS are the product life-cycle, availability, and security. Online applications may disappear as fast as they appeared leaving user with nothing. To address this, the longevity of the provider and their dedication to the application being considered in must be reviewed. As an example, Google has provided several upgrades to their word processing services to date and have thousands of new users each day. These are...