Software as a Service
Special report
Mike Novels, managing director, Preactor International.
business systems.
• Shorter term contracts, made possible through SaaS deployment, reduce the risks associated with traditional software acquisition.
<< is production scheduling software. However, Mike Novels, managing director
at Preactor International, comments that if there is more of a demand for SaaS-based scheduling applications then Preactor will certainly be able to respond to it. “But quite frankly we haven’t had a demand for SaaS- type applications,” he said. “I’m not sure of the business model yet, because how do you charge for it – would it be based on, for example, the amount of time the user is logged on to the system, or the number of orders that are scheduled? Where you have an ERP system that’s transaction-based you can charge per transaction, but you don’t do that in a scheduling system. It’s not really a technology issue in terms of the application; it’s more a case of working out how the business model can work in a scheduling environment. We can offer a rental model of our software if a company requires it, but the company still actually implements it on its local PC. However, I’m sure SaaS will become more important within our market as time goes on.”
Top of the selection criteria
Clark comments that SaaS deployment is at the top of most IT departments’ selection criteria, according to leading industry research articles. “Our experience over the past twelve months answers the question; we are currently deploying a new SaaS WMS solution every 6 weeks or so, in what is an extremely difficult business environment. The numerous advantages made available by SaaS applications make the ‘on-premise’ software solutions increasingly hard to defend.” Clark sees key advantages as including:
• Faster implementation times, allowing businesses to benefit from the software solution much quicker than ever before.
• Minimal IT resources needed for many SaaS applications, true SaaS applications only require a browser, so already over- stretched IT departments are not required to implement or support to these key
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MANUFACTURING &LOGISTICS
IT December 2010
• Resiliency and Redundancy in the hosting environments are often far greater in a professionally hosted SaaS solution, than is financially viable for an ‘On Premise’ solution.
“SaaS vendors are highly motivated to ensure that the particular solution continues to provide an excellent service for their clients, as the barriers to change are significantly less due to the low initial capital investment,” Clark said. “Once a traditional software vendor has received all of the money for an on-premise solution, are they always that motivated to serve their clients?”
Best of both worlds
In the current market climate, are more end users moving towards the use of SaaS solutions, or are they keeping their current on premise-based IT regime in place in order to save money in the short term during a challenging economic period? For Clark it is clear that the recession has certainly engendered in companies, large and small, a less constrained view on the many benefits of SaaS solutions. “It’s a common misconception that the sole reason for selecting a SaaS solution is a lack of capital budget; this is simply not the case,” he remarked. “Many SaaS clients are successful businesses going through significant expansion. Their choice in selecting a SaaS model acknowledges the core shift in the provision of business critical software, to be about acquiring sophisticated solutions to business requirements, but in the manner of an essential service. Forward-thinking companies realise that retaining an IT regime that is not meeting their business requirements and those of their customers is far from a money-saving exercise – it can indeed be the very definition of a ‘false economy’. SaaS solutions offer them the best of both worlds; the ability to meet their operational needs, without affecting the financial constraints faced by many businesses today.”
The hybrid model
What will likely be the upcoming developments to look out for in the world of B2B SaaS
applications in the near future? Kaj Van De Loo, senior VP of technology strategy at SAP, believes the trend is going to be for hybrid on-demand, on-premise solutions that will use the on-demand aspect for what he refers to as Cloud-native capabilities – basically things you couldn't have without the Internet or whatever network you are on. “It’s about collaboration with people outside your company and is something that we need that belongs on the Internet and involves something you cannot do on your own network. And this can be linked to your on-premise systems. Your material requirements planning doesn't necessarily belong in the Cloud; there's nothing wrong with having it on premise. But you can tie-in collaboration with your suppliers together with your material requirements planning – so whenever you have exceptions in your ERP system your supplier can be informed about this on line and collaborate with you on how to solve this issue. So, we see more of these types of hybrid deployments where we extend existing and new on- premise applications by these Cloud-native capabilities sitting outside of the company. Here we see very big potential, and the opportunity to create new applications that use these Cloud-native elements as a core part of their functional scope and as a core part of how people interact with them.”
Andrew Bond, core technology director at Oracle EMEA, has a view of the future where applications will be deployed either publicly or privately in such a way that users can pick up components and join them together to fit their organisations’ particular business processes. “So I think the definition of SaaS will become a lot less rigid than it currently is,” he said. Bond also believes that platform providers need to further demonstrate their offerings’ inherent security attributes to the SaaS application vendors. “For example, we need encryption through - out the stack and must ensure that the data is transparently encrypted when it runs through the network. Platform providers need to demonstrate that every part of that configuration in terms of application has a right to be there. The process also needs to be auditable and fully compliant with security as well as legislation that affects all organisations concerned. And in terms of quality of service, I think high availability is important; SaaS vendors need to know they can offer software to their customers wherever they are in the world.”
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