We’ve all seen a lot of hype in the world about software as a service. Every major and many minor software vendors are rolling out SaaS solutions. In the SharePoint 2012 conference Microsoft pretty much said that their main push will be to the cloud through Office 365 first and Azure second. IBM has made some large strides in taking many of their tools and putting them in a more manageable platform. (e.g. IaaS, PaaS, MSP). They also have SmartCloud for Social Business and recently bought Kenexa, a SaaS provider in the HR and talent management arena. Oracle Cloud gives you options for Social Networking and Social Media. Jive offers a hosted option. Liferay has vendors who support SaaS.I could go on but you get the picture. All the major social and portal technologies have supported hosting or SaaS options. Note: you may define supported hosting as a provider who provides the data center, hardware, network access, and software for a specific social or portal tool. They also provide the support necessary to keep the social or portal tool up. In other words, they do a lot more than your traditional Rackspace or ATT hosting service.
I don’t want to slam home yet another, “SaaS is great, all hail SaaS” type of post. Instead, I want to focus first on the case that SaaS or supported hosting will become a default option for all next generation social networking, social media, and portal solutions. Another post will focus on issues that must be resolved before these types of solutions can become the default selection.
Here are the reasons why SaaS / Supported Hosting will grow steadily in the next four years.
Time and Effort Needed to Install On-Premise
Companies have bought into virtualization in a big way. However, that doesn’t seem to have decreased installation time. One main cause lies in the fact that too many companies choose to operate very lean with their virtualized farms. They may be able to give you a development server but when you ask for a highly available system running on anywhere from 4-8 servers in the production environment the data center guys start saying the dreaded phrase, “We have to buy hardware” Once that cats out of the bag you know you are in for:
- A delay due to getting a PO signed
- A delay to get the hardware ordered and shipped
- A delay for the hardware people to stand it up
- A delay for the system administrator to get the OS up, patched, networked, etc.
- One final delay as they hand it over to you without sufficient rights for you to do anything on the box.
Budget is Headed to Line of Business
This Forbes Article by Lisa Arthur, CMO of Terradata systems, is one indicator among many,
Marketing is now a fundamental driver of IT purchasing, and that trend shows no signs of stopping –or even slowing down –any time soon. In fact, Gartner analyst Laura McLellan recently predicted that by 2017, CMOs will spend more on IT than their counterpart CIOs.
At first, that prediction may sound a bit over the top. (In just five years from now, CMOs are going to be spending more on IT than CIOs do?) But, consider this: 1) As we all know, marketing is becoming increasingly technology-based, 2) Harnessing and mastering Big Data is now key to achieving competitive advantage, and 3) Many marketing budgets already are larger –and faster growing –than IT budgets.
If you think social and portal have little to do with Big Data, guess again. Social and Portal sites house the very sites that either help generate large amounts of data or they host the subjects that are the subjects of all the knowledge Big Data brings. In other words, social and portal is already seeing a push towards non-IT budget drivers.
Service Providers Are Figuring Out How To Do SaaS
Let’s face it, poor schmuck’s like me are still figuring out how to work with SaaS applications. There’s plenty of room to grow into it but it’s been a bit of a rough road for those used to building things almost from the ground up. As we figure it out, we will be pushing that to our clients because the potential cost savings is just too much. GreenPages Technology Solutions CEO Ron Dupler has this to say about it at a CRN article title, “Solutions Providers stuck in the On-Premise World Are Dead Men Walking.”
“We have sort of put the ship on warp drive right now,” said the 24-year IT industry veteran, reflecting on the treacherous business model shift — a tornado of sorts — that has resulted in record consolidation in the solution provider market in the past several years.
The winners in the channel of 2018, Dupler said, will be nimble, agile and comfortable operating in a world where information technology innovation is moving at an exponential rate. That exponential rate of change has obliterated the old product-dominated solution provider business model in favor of a services model where annuity-based managed services/professional services with a high quotient of a partner’s own intellectual property are front and center.
Vendors Will Mature
Companies like Salesforce.com are cleaning up in the CRM world and making huge forays into portal like sites, social networking, and social media. However, many of the largest vendors have SaaS products that don’t quite measure up to their on-premise siblings……………….yet. I’ll follow up with some of those problems but believe me when I say that the big three vendors, IBM, Oracle, and Microsoft; intend to make their SaaS / Supported Hosting offerings every bit as full features and accessible as their on-premise offerings. They don’t provide a full feature set yet but they will in the next two years.
Bottom Line
In just a few years, a combination of factors will push SaaS / Supported Hosting solutions through the roof. Hold on because we’ve only seen the small bumps before the roller coaster reaches the top and starts you on the real ride.
