Software As A Service - SaaS

1. Software As A Service - SaaS Ian Mitchell, FNZCS Confidential to Ian Mitchell

2. What is SaaS? - Wikipedia 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. Confidential to Ian Mitchell

3. Key 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. Confidential to Ian Mitchell

4. Variations – 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. Confidential to Ian Mitchell

5. Definition 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. Confidential to Ian Mitchell

6. Advantages • 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. Confidential to Ian Mitchell

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

8. New 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. Confidential to Ian Mitchell

9. Enhancements • 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. Confidential to Ian Mitchell

10. Open 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? Confidential to Ian Mitchell

11. 24/7 • 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. Confidential to Ian Mitchell

12. 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. Confidential to Ian Mitchell

13. Screenshots • SalesForce • NetSuite Confidential to Ian Mitchell

14. Cost 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! Confidential to Ian Mitchell

15. Cost 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. Confidential to Ian Mitchell

16. Value 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! Confidential to Ian Mitchell

17. Ease 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. Confidential to Ian Mitchell

18. Reduced 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. Confidential to Ian Mitchell

19. Myths Jeffrey 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. Confidential to Ian Mitchell

20. Myths Business 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. Confidential to Ian Mitchell

21. Conclusions • 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. Confidential to Ian Mitchell

22. Thank You • Ian Mitchell, FNZCS • e:Ian@Mitchell.co.nz • http://www.SoftwareAsAService.co.nz • http://www.AboutIT.co.nz • http://www.Mitchell.co.nz Confidential to Ian Mitchell