I didn’t blog while travelling. It was a more than full time job to listen to clients as I went from country to country and city to city, meeting IT and business executives from over 85 non-US and non-EU countries. About 2% of them use software as a service according to the Gartner definition. They asked sharp questions about the economic benefits of SaaS over outsourcing a business service or outsourcing or hosting their business applications. There is a big impression out there that the primary beneficiaries of this efficient technology model, so far, are the software companies themselves who have created elegant architectures and keep most of the financial benefit to themselves. There were intense questions about the true total cost of ownership for complex installations. Simple/static activities like most of the activities of sales personnel, or survey tools, or HR applications were understood as candidates for SaaS. But what about core functionality in banking or insurance? What about large scale, mission-critical, highly integrated / interconnected call centers? What is the true TCO? What about where there is a need for business process?
There is much more on this in our research, but for SaaS to go from straight-forward, non-industry specific tasks to a software system that handles complex operations at a compelling return on investment to the end user organization, the jury is still deciding who the true beneficiaries will be. This was especially evident in the repeated questions about ‘who owns the data?’ and ‘how much of my data is available in real time?’ and the cost for various forms of SaaS (isolated infrastructure / data / applications, simultaneous multi-lingual usage….). There isn’t much transparency in the market about the true five year costs of different models, nor much of a track record of vendor-viability.
And the connection between Cloud and Saas? There was mostly eye-rolling and empty looks. Some didn’t know, and the rest weren’t sure why it mattered today. We are earlier days than is often thought on both of these topics.
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