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8 Myths of Software-as-a-Service
abb_road writes "BusinessWeek looks at the current state of software-as-a-service, arguing that the model is well established and is distinct from failed ASP/Hosting models of the dot-com era. Far from a passing fad, the model is starting to see large-scale adoption, and traditional vendors are having trouble revamping their applications and financials to get in on the action. From the article, 'As SaaS gains mainstream acceptance, it is becoming an important disruptive force in the software industry. And as long as the quality and reliability of SaaS solutions continues to improve, the appeal of SaaS isn't going to go away.'"
To condense the article down: SaaS is a fancy term for outsourced business operations. The only difference is that companies provide communications about these services through... (wait for it)
...
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the INTERNET!
Are you impressed yet? It's very Web 2.0, I'm sure. Some of them might even use AJAX and Social Networking and Portal Technology and Peer to Peer Business to Customer relationships and
Javascript + Nintendo DSi = DSiCade
"Software as a service" is almost as old as the public internet. Many banks, hospitals and government institutions have been running remotely hosted mainframe apps for over 2 decades ... it's quite proven successful business model.
If you look at the fact that no code is ever flawless, and always has bugs, so there's always patches and upgrades. Most people in the regular software industry are passing off intermediate versions of flawed software as a product, and then giving the service away for free. This is just the opposite of that model and it makes more sense. Continuing to support, and making bug fixes to past versions of software is part of the service, clients have a real voice in the future of the software package by communicating what their future needs are. As they pay per period versus per version, software development companies don't have to guess anymore what their clients want to get them to "buy the new version" instead, the clients can have a real voice in what features are important to them in the future, without the need for pushing stuff off to a higher version versus an incremental update. It's a better model because instead of selling "why you have to ditch this old one and buy this new one" you are instead saying, "we have an established relationship in the past, and if you enjoy this, we can continue." Resulting in less useless bells and whistles in new versions, and more of the actual needed functionality. Instead of inventing things you dream they will want, you take care of their changing needs instead. That's why I think it's a winning model (if companies followed it correctly).
Judges and senates have been bought for gold; Esteem and love were never to be sold.
This message brought to you by Salesforce.com This article reads like a press release from Salesforce.com, the biggest player in the "software as a service" marketspace. I tried Salesforce when I started my VoIP business; if they're the market leader, this industry is too immature to be taken seriously.
First off, it isn't cheap--Salesforce.com is $65 per month, per seat and it has to be paid 3 months in advance. This makes it quite a bit more expensive for small businesses than say Goldmine or ACT. Secondly, the reliability was horrible. CRM is the lifeblood of any organization. *Any* downtime results in all of your customer facing people (sales team, customer support staff, billing, etc) basically sitting around on their hands. Sales leads were lost and customers were pissed off. The worst part about it is that we couldn't do anything about it. I couldn't reboot a server, rebuild table indexes, sacrifice an intern... nothing. I wasn't told what the problem was when the system came back up, nor was I even notified *when* they came back online. And I wasn't given an apology or a service credit.
After several very public blackeyes Salesforce finally released a systems status page. In a pure act of corporate hubris they named it http://trust.salesforce.com/. You know know something's deeply wrong when a simple status screen is given that hard of a PR spin. Sorry, but they already blew my trust. I don't care what BusinessWeek says, I wholeheartly recommend that an organization keep their key systems in-house!
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This is crap. It's not even well-written crap, which makes it pure bullshit. There's more nonsense "terminology" in this article than I've seen in a long time. The belief that the "legacy applications" are the reason that the dot-com boom failed is unjustified. Business don't fail because of software, good, bad, or indifferent. And they're sure as hell not going to succeed because of it, either. From the article, "Now Oracle, Microsoft (MSFT), and SAP (SAP) must respond to the SaaS movement while trying to avoid cannibalizing their existing software business in the process." This is a bald-faced attempt at spreading fear, uncertainty, and doubt. Microsoft produces the operating system that most home/business clients use, and Oracle produces one of the most common commercial databases, both of which are staple products, and are required for this "software-as-a-service" to function. They won't be "cannibalizing their existing software business[es]" any time soon. So, I feel it is necessary to add another "myth" to this page: Myth #9: This article is a reliable source of information
Software as a service is great if you have some way to export your data. My company has (not my choice) bought into an online ERP system which looks good from afar, but is apparently far from good.
Now that all our data is in the system and we are running our operations off of their system we are pretty much screwed...they can jump the price at any point and we just have to pay it. The sales people lie (no surprises there) about having ways to export your data, but there aren't any really there.
Just be sure before you jump into something like this that you have a way to get your data back AND get it in writing that said tools will always remain and be current.
(and, yes, since we bought into their system they have moved to only allowing Internet Explorer....D'oh!)