SaaS Model in economic downturn


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Today, Companies increase their usage of SaaS across multiple applications, larger user base and most mission-critical applications. An interesting trend now is that the established large enterprises are beginning to replace on-premise applications with on-Demand applications based on SaaS principles.

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  • a) SaaS applications are fundamentally different from standard business applications. Successful SaaS applications are built as multi-tenant, meta-data driven applications shared across multiple clients. These applications need to be – - Scalable - Robust - Secure - High available b) The SaaS offering to market can be an expensive, risky and time consuming as a variety of activities that lie outside the core competency of most software companies: Systems management, Security, Disaster recovery, Change management, and Customer support center The difficulties associated with delivering SaaS have given rise to a new category of service provider: the SaaS enabler .
  • SaaS Model in economic downturn

    1. 1. SaaS Model in economic downturn By Jitendra Maan
    2. 2. Agenda <ul><li>Demystifying SaaS </li></ul><ul><li>Comparing SaaS with Traditional packaged software </li></ul><ul><li>Evolution of Software-as-a-Service </li></ul><ul><li>onDemand consumption Model </li></ul><ul><li>SaaS Trends/Projections by lead analysts </li></ul><ul><li>Benefits of SaaS based delivery model </li></ul><ul><li>SaaS architecture shift </li></ul><ul><li>Key barriers to SaaS Adoption </li></ul><ul><li>Integration – The Achilles heel of SaaS </li></ul><ul><li>Integration as a Service </li></ul><ul><li>Platform-as-a-Service </li></ul><ul><li>Key elements of SaaS application </li></ul>
    3. 3. Software-as-a-Service Different views on SaaS <ul><li> </li></ul><ul><li>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. SaaS is a model of software delivery rather than a market segment; software can be delivered using this method to any market segment including small business, medium and large business. </li></ul><ul><li>A SaaS is built from the ground up to be multi-tenant at all layers of the stack: database, server, and application. All users run the same code, with customizations and configurations stored as metadata parameters. SaaS is sold on a subscription or term license basis that includes upgrades, maintenance, and typically some level of support. SaaS is usually delivered by the software creator“ </li></ul><ul><ul><ul><ul><ul><li>Source Forrester </li></ul></ul></ul></ul></ul><ul><li>Computer based applications and services deployed as a hosted service and assessed over internet rather than a packaged product purchased and installed by end user </li></ul>
    4. 4. Software-as-a-Service (continued..)
    5. 6. On-Demand Consumption Model <ul><li>Pay as consumed </li></ul><ul><li>Pay in Advance </li></ul><ul><li>High CapEX </li></ul>Payment <ul><li>Integrated </li></ul><ul><li>Service oriented Architecture </li></ul><ul><li>Standardized </li></ul><ul><li>Monolithic </li></ul><ul><li>Client/Server </li></ul><ul><li>Legacy </li></ul><ul><li>Non-standard </li></ul>Architecture <ul><li>On-Demand </li></ul><ul><li>Technology driven </li></ul><ul><li>In-house platform </li></ul><ul><li>Labor Intensive </li></ul>Service Delivery Model New Model Old Model
    6. 7. SaaS Trends/Projections by Lead analysts Industry analyst firm Gartner predicts that by 2011, software revenue from SaaS will reach $11.5 billion. From 2007-11 the growth rate of SaaS will double that of enterprise software as a whole Over 50% of VC funded software companies are building SaaS applications and the percentage is growing. A study from Saugatuck Research indicates an 84% customer satisfaction rate for SaaS applications. By 2010, 40 percent of traditional on-premise application ISVs will bring to market SaaS solution offerings, either via acquisition, development of new single-instance multi-tenant applications, or through virtualized (multi-tenant) versions of their traditional on-premise offerings. Less than half of the ISVs in transition will actually succeed. By Y2009, greater than 55% of North American-based businesses will have deployed at-least one SaaS application, with Western European close behind at greater than 40 percent. 
    7. 8. SaaS Trends/Projections by Lead analysts World wide SaaS market by 2009 will be $10.7 Billion
    8. 9. Benefits – SaaS based delivery Model <ul><li>Low Total Cost of Ownership by shifting ownership </li></ul><ul><li>Lower Capital & Operating cost </li></ul><ul><li>Pricing based on usage </li></ul><ul><li>Uptime as a key factor </li></ul>Reduce Time-to-market cycle and better ROI (Return On Investment) <ul><li>Reduced business risk </li></ul><ul><li>Reduce IT complexity </li></ul><ul><li>Development-as-a-Service </li></ul><ul><li>Centralized authentication system </li></ul><ul><li>Rapid Deployment cycles </li></ul><ul><li>Greater Flexibility & Ease of use </li></ul><ul><li>Multi-tenancy based architecture </li></ul><ul><li>Democratized configuration </li></ul>Integrated Service delivery Model and quick rollouts Key benefits of SaaS
    9. 10. SaaS Architecture shift The major benefit of multi-tenancy is cost effectiveness . Sharing software, hardware, application development, and maintenance costs between tenants can lower the costs for each tenant. Furthermore, sharing a single instance of an application between tenants can provide additional benefits, for example, all tenants can be simultaneously upgraded whenever the application is upgraded.
    10. 11. Technical challenges with SaaS based multi-tenant applications <ul><li>Access control </li></ul><ul><li>Customizability, configurability </li></ul><ul><li>User interface </li></ul><ul><li>Variations in tenant requirements </li></ul><ul><li>Business logic </li></ul><ul><li>Tenant provisioning </li></ul><ul><li>Usage based metering </li></ul><ul><li>Scalable architecture </li></ul>
    11. 12. Integration – the Achilles heel of SaaS <ul><li>&quot;There's an expectation gap in the market,&quot; says Rob Bois, senior research analyst for AMR. Companies, he says, believe that &quot;the on-demand model eliminates the up-front cost and effort required in implementing a CRM system; that it's just like turning on a switch. But the integration .. requirements are not that dramatically different from traditional software when you get into more complex implementations. There's still a lot of work involved.&quot; </li></ul>Integration-as-a-Service is a delivery model which takes the functionality of system integration and puts it into the cloud, providing data transport between enterprise wide systems and third parties (suppliers and other trading partners) on-demand.
    12. 13. Integration-as-a-Service - Takeaways <ul><li>Integration remains the largest obstacle to wide-spread SaaS adoption, particularly in larger enterprises </li></ul><ul><li>An XML API does not “solve” Integration </li></ul><ul><li>Traditional Integration vendors don’t “fit” </li></ul><ul><li>Integration “Solution” must be strategic </li></ul><ul><ul><li>Plan Integration architecture from the beginning </li></ul></ul><ul><ul><li>Find tools that match the agility and economics of SaaS </li></ul></ul>
    13. 14. <ul><li>Platform as a Service (PaaS) is a platform to create business applications entirely on-demand without software. With PaaS users can not only build applications but also share and run the business applications. This provides global infrastructure for database, logic, workflow, integration, application distribution and interface. </li></ul>Platform-as-a-Service
    14. 15. The Three Legs of “Platform-as-a-Service” Three Lags of PaaS SaaS Enablement Cloud Infrastructure Cloud Development
    15. 16. Key elements of successful SaaS application Security Metering and billing Interactive user experience Customization and configuration Scalability Multi-tenancy and Shared infrastructure Monitoring of service quality Robustness, scalable Robust Extensible Architecture
    16. 18. Your turn… Questions ???