Is "Exploring SaaS" one of your organization’s Cloud Computing New Year’s resolutions? It should be

Cloud Computing can take on many different forms. Popular options include the following:

  • Infrastructure-as-a-Service (IaaS) provided by a vendor like Amazon Web Services
  • Platform-as-a-Service (PaaS) where organizations subscribe and build/deploy applications that meet specific needs
  • Software-as-a-Service (SaaS) where organizations subscribe to deploy industry-leading best practices through prebuilt application software

Each cloud computing option can benefit your organization in different ways. This post will focus on SaaS and why your organization should make it a New Year’s resolution to explore and consider adopting it.

To understand if your organization might be a strong candidate for SaaS, think about your organization’s current computing environment and see if it checks off these boxes:
  • Runs an application software stack predominately comprised of on-premise systems from the prior software generation (EBS, PeopleSoft, JDE, SAP)
  • Holds perpetual licenses on those applications that are likely 10–20+ years old
  • Pays annual maintenance on licenses to receive technical support, upgrades, patches, and bundles
  • Runs the applications on internal IT infrastructure
  • Employs an operations staff, possibly 24×7, to monitor the applications
  • Employs a technical staff dedicated to each system, possibly augmented with specialized consultants either active or on retainer
  • Delays major upgrades due to resource constraints and the complexity of bringing forward prior customizations made to the software
  • Deals with license verification true-ups each year to either remain at status quo or increase license/maintenance fees
If four or more boxes are checked, then 2018 is the perfect time to look at SaaS!

So, what’s so different about SaaS compared to the environment described above? Not in any order, the main characteristics of SaaS include these:

  1. SaaS is subscription based. As a result, acquisition of SaaS applications can more often be included in normal departmental budgets rather than in capital budgets at the corporate level.
  2. SaaS applications are more secure. Most vendors run their applications on leading public cloud IaaS services with concentrated expertise in security.
  3. SaaS applications are upgraded multiple times per year. SaaS has a tremendous advantage over previous generation applications in that new functionality is constantly being added for review and adoption. Upgrades are commonly fast and seamless.
  4. SaaS applications are highly configurable without customizing code. The advantage here is that SaaS systems remain permanently upgradeable. Many vendors do provide PaaS for SaaS options to fill critical gaps if necessary, but many SaaS systems are built around industry best practices such that most needs are met.
  5. SaaS applications are inherently scalable. If your organization grows substantially, either organically or through acquisition, the application will expand to handle the growth.
  6. SaaS subscriptions typically embed more functionality. Functionality such as optical scanning of documents, advanced reporting tools, Business Intelligence, and other functions are typically available as part of the overall service offering.
  7. SaaS impacts Total Cost of Ownership (TCO). Each organization’s situation is different, and SaaS does not guarantee lower TCO over time. However, multiple TCO factors will be impacted when moving to SaaS. In addition to characteristics listed earlier which should have determinable value, some hard factors include software costs at initial acquisition and ongoing implementation costs that should prove comparably lower, computing infrastructure, operations, development, and support staff costs.