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Unsurprisingly, and like most things in today's technically savvy world, the delivery and adoption of "Software as a Service" (SaaS) is occurring and evolving at an incredible pace. At the start of a new year, when most of us are assessing the year past and looking forward to the year ahead, SaaS, and where it is headed, is a worthy topic for our musings. According to a research report by Saugatuck Technology, SaaS has already entered the second of three successive, growing waves of Early Adoption, Mainstream Adoption and Ubiquitous Adoption. One of the most interesting observations Saugatuck made about this second Mainstream Adoption Wave (which they state began in 2005 and will continue through 2010) is undoubtedly being played out in the marketplace today. That is, that SaaS Integration Platforms (SIPs) will play a critical role (especially in large enterprises) as a "hub" that provides solutions for improved integration and delivery of applications and services.
You only have to take a quick scan of the SaaS related press releases, articles, blogs, whitepapers and other news delivery mechanisms to see that everyone is talking about the emergence of SIPs and the growing plethora of platform offerings. Oracle OnDemand, Salesforce.com's AppExchange, Cisco Webex Connect, OpSource's Optimal OnDemand, Jamcracker's Pivot Path, Amazon's AWS (Amazon Web Services), EC2 (Elastic Compute Cloud), NetSuite SuiteBundler, and S3 (Simplified Storage Service) are just a few of the larger players that are dominating the deployment of many SaaS business applications today. Many smaller SaaS start-ups are also emerging in this marketplace such as Apprenda, CoreObjects and Etelos.
So what are SIPs, what are the some of the advantages of this trend and where is it all going to end?
What are SaaS Integration Platforms (SIPs?). According to Wikipedia a SIP is "A computer program or collection of computer programs that acts as a host to applications that reside on it. The platform manages underlying computer hardware and software resources and uses those resources to endow its hosted applications with multi-tenant and on-demand capabilities that are found in SaaS applications. The platform absorbs the responsibility of distributing the application as a service to multiple users over the Internet."
If this explanation seems a little mind-numbing, suffice it to say that SIPs provide a technology environment where it is very fast and easy to create, build and maintain SaaS applications. For example, any SaaS deployment requires some services or applications that are independent of the primary solution being offered to customers (such as billing, customer tracking systems, business intelligence and so on). A SIP provides these generic applications so that a company can focus their expertise on building their primary solution.
Now take one step further and consider those vendors who not only provide a platform but also a large portfolio of applications. The suite of applications that make up this portfolio may consist of a wide range of applications from partners that provide specialization in several vertical markets or partners who specialize in one particular vertical and are aimed at a specific market. In these cases, the SIP now becomes a much broader SaaS ecosystem, business marketplace, or aggregation of independent applications being delivered as a service that can bring multiple benefits to a SaaS company's subscribers.
What are some of the advantages of this trend? Many Independent Software Vendors (ISVs) who are offering, or who are considering offering, a SaaS solution today are quickly becoming aware of the advantages and reasons for utilizing a SaaS platform as the foundation for their SaaS offering. For the ISV, these advantages include reduced implementation time, reduced implementation costs and reduced operational costs.
However, what may be not so obvious (because so many of us are technology companies and immersed in the building and delivery of software) are the advantages of platforms and SaaS ecosystems to small and medium sized businesses (SMBs). As the SMB market continues to increase their usage of SaaS they are experiencing the headaches of having multiple stand-alone SaaS applications. According to Liz Herbert, a senior analyst at Forrester Research: "In the early days of SaaS, a lot of applications were standalone and running in silos. People just weren't focused on the challenge of integration. They were focused on customisation. Now we're seeing SaaS used more broadly."
As Laurie McCabe, Vice President of Access Markets International Inc. points out: "What happens is that you've got all these different solutions running in different places and integrating them can get a little tricky."
So here's the bottom line: As SaaS platforms and SaaS ecosystems evolve, they will likely reduce some of these headaches and provide SMBs with an integrated application suite that does not require a risky investment in time and cash.
Where is it all going to end? Let us remember the reference to Saugatuck Technology's three successive, growing waves of SaaS: Early Adoption, Mainstream Adoption and Ubiquitous Adoption, which is where we began this discussion. Saugatuck believes that in Wave III, the Ubiquitous Adoption Wave, (which apparently will begin this year and continue through 2014) among other things, will usher in a wave of workflow enabled business transformation and optimized business and IT ecosystems.
Whether this prediction pans out or not (and we have no reason to believe it will not, given Saugatuck's accurate forecast of the critical role that SIPs would start to play), one thing is for sure: In 2008, SaaS will continue to aggressively evolve and impact the software world as we know it today.
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