SaaS : Software As A Service Suhas Kelkar VP Product Management Digité ( www.digite.com ) Keynote Speech For SCIT ( www.scit.edu ) Software Development Challenges & Issues Seminar January 19, 2008

Agenda What is SaaS? Why SaaS? History and current state of SaaS SaaS Architecture

SaaS Elevator Pitch "Software deployed as a hosted service and accessed over the Internet"

"Software deployed as a hosted service and accessed over the Internet"

Business Services versus Consumer Oriented Services

What is SaaS? SaaS is a software delivery method that provides access to software and its functions remotely as a Web-based service. SaaS allows organizations to access business functionality at a cost typically less than paying for licensed applications since SaaS pricing is based on a monthly fee . Users don’t need to invest as much in hardware, server support, security audits and need fewer in house IT staff

SaaS is a software delivery method that provides access to software and its functions remotely as a Web-based service.

SaaS allows organizations to access business functionality at a cost typically less than paying for licensed applications since SaaS pricing is based on a monthly fee .

Users don’t need to invest as much in hardware, server support, security audits and need fewer in house IT staff

SaaS Advantages Lower Costs. The user need not pay a single (usually large) licensing fee. He only needs to pay recurring subscription fees. Smaller Storage and Hardware Requirements. The user need not store software or data stored on his computer Fewer Personnel. SaaS reduces the need for specially trained IT personnel to handle maintenance, monitoring and software updates. Key Advantages for the End User Continuous and recurring stream of income Reduced losses from piracy and unlicensed use of software Greater valuation for the company! Key Advantages for the Vendor

Lower Costs. The user need not pay a single (usually large) licensing fee. He only needs to pay recurring subscription fees.

Smaller Storage and Hardware Requirements. The user need not store software or data stored on his computer

Fewer Personnel. SaaS reduces the need for specially trained IT personnel to handle maintenance, monitoring and software updates.

Continuous and recurring stream of income

Reduced losses from piracy and unlicensed use of software

Greater valuation for the company!

Key characteristics of SaaS? Network based access and management of commercial software Central management of commercial software rather than at each customer’s site One to many application delivery model based on single instance, multi tenant architecture Centralized updating of software No more install hassles, downloadable patches and painful upgrades Upgrades are frequent and completely transparent. Gmail version keeps changing

Network based access and management of commercial software

Central management of commercial software rather than at each customer’s site

One to many application delivery model based on single instance, multi tenant architecture

Centralized updating of software

No more install hassles, downloadable patches and painful upgrades

Upgrades are frequent and completely transparent. Gmail version keeps changing

Why SaaS? In 2005, Gartner estimated SaaS sales were 5% of total business software sales. In 2011, Gartner predicts that share will grow to 25% (As per Gartner, September 26, 2006) From IDC Directions Video : SaaS Tipping point in ’07 IBM will create online marketplace on Web Sphere SAP, Microsoft will accelerate SaaS strategies Salesforce.com will be acquired 2/3 rd of line of business managers favored SaaS delivery model

In 2005, Gartner estimated SaaS sales were 5% of total business software sales.

In 2011, Gartner predicts that share will grow to 25% (As per Gartner, September 26, 2006)

From IDC Directions Video : SaaS Tipping point in ’07

IBM will create online marketplace on Web Sphere

SAP, Microsoft will accelerate SaaS strategies

Salesforce.com will be acquired

2/3 rd of line of business managers favored SaaS delivery model

Why SaaS? Target the “long tail” Targeting the "long tail" of smaller businesses, by reducing the minimum cost at which software can be sold . On-Premise Software Market SaaS Opens up New Market

Targeting the "long tail" of smaller businesses, by reducing the minimum cost at which software can be sold .

Why SaaS? SaaS Showcase Example daptiv formerly eProject $45 per user per month, claims to have 100,000 users. Adding 2000 users per month Grew 128% to $16M revenue in FY06 Positioning themselves as “SalesForce for the PPM market”, via eLounge (online customer collaboration environment) Gaining market share and winning many deals

daptiv formerly eProject

$45 per user per month, claims to have 100,000 users. Adding 2000 users per month

Grew 128% to $16M revenue in FY06

Positioning themselves as “SalesForce for the PPM market”, via eLounge (online customer collaboration environment)

Gaining market share and winning many deals

Agenda What is SaaS? History and current state of SaaS SaaS Architecture

History of SaaS SaaS as a concept is not fundamentally new! What is new is the timing and success of SaaS!

SaaS as a concept is not fundamentally new! What is new is the timing and success of SaaS!

ASP Versus SaaS It is important to understand the difference between ASP and SaaS. It is very common to confuse SaaS with ASP. ASP applications were traditional client-server applications with HTML façade ASP suffered with poor performance Shift in center of gravity : SaaS is about what customer wants, ASP was what the client would offer ASP concept did not scale!

It is important to understand the difference between ASP and SaaS. It is very common to confuse SaaS with ASP.

ASP applications were traditional client-server applications with HTML façade

ASP suffered with poor performance

Shift in center of gravity : SaaS is about what customer wants, ASP was what the client would offer

ASP concept did not scale!

SaaS and beyond SaaS is just the beginning Platform As A Service (FORCE.com) Hardware As A Service (HaaS) Infrastructure As A Service (IaaS) “ Blue Cloud” by IBM Simple Storage Service (Amazon S3) enables storage in the cloud, Elastic Computing Cloud (Amazon EC2) enables "compute" in the cloud. Google computing services

SaaS is just the beginning

Platform As A Service (FORCE.com)

Hardware As A Service (HaaS)

Infrastructure As A Service (IaaS)

“ Blue Cloud” by IBM

Simple Storage Service (Amazon S3) enables storage in the cloud,

Elastic Computing Cloud (Amazon EC2) enables "compute" in the cloud.

Google computing services

Agenda What is SaaS? History and current state of SaaS SaaS Architecture

Paradigm Shift Moving from on-premise software to SaaS requires paradigm shift in following three areas

Moving from on-premise software to SaaS requires paradigm shift in following three areas

Application Architecture : SaaS Maturity Model Level 1: Ad Hoc / Custom Level 2: Configurable Level 3: Configurable and Multi-tenant efficient Level 4: Scalable, Configurable, Multi-Tenant-Efficient

Level 1: Ad Hoc / Custom

Level 2: Configurable

Level 3: Configurable and Multi-tenant efficient

Level 4: Scalable, Configurable, Multi-Tenant-Efficient

Application Architecture : SaaS Maturity Model Similar to ASP model Each customer has i ts own customized version of the hosted application, and runs its own instance of the application on the host's servers This level offers very few of the benefits of a fully mature SaaS solution LEVEL 1 : AD HOC / CUSTOM

Similar to ASP model

Each customer has i ts own customized version of the hosted application, and runs its own instance of the application on the host's servers

This level offers very few of the benefits of a fully mature SaaS solution

Application Architecture : SaaS Maturity Model Vendor hosts a separate instance of the application for each tenant Same code, no need to maintain customized application code bases Easier to support/maintain since only single instance needs to be updated More expensive than Level 1 in terms of effort required LEVEL 2 : CONFIGURABLE

Vendor hosts a separate instance of the application for each tenant

Same code, no need to maintain customized application code bases

Easier to support/maintain since only single instance needs to be updated

More expensive than Level 1 in terms of effort required

Application Architecture : SaaS Maturity Model Single instance that serves every customer, with configurable metadata Authorization and security policies ensure that each customer's data is kept separate from that of other customers Eliminates the need to provide server space for as many instances as the vendor has customers LEVEL 3 : CONFIGURABLE & MULTI TENANT EFFICIENT

Single instance that serves every customer, with configurable metadata

Authorization and security policies ensure that each customer's data is kept separate from that of other customers

Eliminates the need to provide server space for as many instances as the vendor has customers

Application Architecture : SaaS Maturity Model Vendor hosts multiple customers on a load-balanced farm of identical instances Scalable because servers can be added to meet demand without re-architecture Changes or fixes can be rolled out to thousands of tenants LEVEL 4 : SCALABLE, CONFIGURABLE & MULTI TENANT EFFICIENT

Vendor hosts multiple customers on a load-balanced farm of identical instances

Scalable because servers can be added to meet demand without re-architecture

Changes or fixes can be rolled out to thousands of tenants

Business Model Shifting the "ownership" of the software from the customer to an provider. Reallocating responsibility for the technology infrastructure and management—that is, hardware and professional services—from the customer to the provider. Typical Budget For On-premise Software Budget Distribution For SaaS Software

Shifting the "ownership" of the software from the customer to an provider.

Reallocating responsibility for the technology infrastructure and management—that is, hardware and professional services—from the customer to the provider.

Business Model Reducing the cost of providing software services, through specialization and economy of scale. SaaS Hardware costs get shared by all tenants resulting in economies of scale

Reducing the cost of providing software services, through specialization and economy of scale.

Operational Structure SaaS providers not only have to be experts in building software and bringing it to market, they must also become experts in operating and managing it. Monitoring SaaS applications For availability For performance

SaaS providers not only have to be experts in building software and bringing it to market, they must also become experts in operating and managing it.

Monitoring SaaS applications

For availability

For performance

Trust the Platform!

Does this look all complicated to you?  Help is literally just around the corner! :)

Help is literally just around the corner! :)

Summary SaaS is going to have a major impact on the software industry, because SaaS will change the way people build, sell, buy & use software As students of SCIT, you are the future of tomorrow’s IT industry. Hence you need to track SaaS very closely as it will have material impact on your future!

SaaS is going to have a major impact on the software industry, because SaaS will change the way people build, sell, buy & use software

As students of SCIT, you are the future of tomorrow’s IT industry. Hence you need to track SaaS very closely as it will have material impact on your future!

Thanks! [email_address]

Glossary and References http://msdn2.microsoft.com/en-us/library/aa479069.aspx http://blogs.msdn.com/gianpaolo/ http://www.microsoft.com/serviceproviders/saas/default.mspx http:// en.wikipedia.org/wiki/SaaS

http://msdn2.microsoft.com/en-us/library/aa479069.aspx

http://blogs.msdn.com/gianpaolo/

http://www.microsoft.com/serviceproviders/saas/default.mspx

http:// en.wikipedia.org/wiki/SaaS