Does it have to be SaaS and what exacty is this anyway?

by Sven Ringling

June 8, 2011

We currently find clients confused by the current discussion on Software as a Service (SaaS). Many vendors push their products as being SaaS, provide arbitrary definitions of what SaaS really is, and are guilty of some scaremongering by making clients believe they'll end up in a dead end, if they don't move to SaaS now.
We found a succinct list of 10 points to be expected from a good SaaS solution. Written by Steven John, the CIO of Workday (a major SaaS vendor) it is certainly not unbiased, but as good a starting point as any: 10 critical requirements of cloud applications

Note that Steven comes close to setting "cloud" and "SaaS" equal in the first paragraph (he actually writes "cloud applications", which might be fine, but given the confusion of terminology in that field, we want to point it out anyway). Actually, SaaS is just a part of "The Cloud", which comprises other IT services like infrastructure (IaaS) or platforms (PaaS).

The problem with this list as well as others is: it claims to provide a universal definition of what SaaS should be and then suggests, this is wh at every organisation needs. This is completely ignoring the fact that business and IT objectives and constraints differ between organisations. Therefore, we believe that it doesn't really matter that much, whether a solution has the 4 characters "SaaS' stamped on or not. As a decision maker you should rather look at what value various solutions provide for your organisation.
Modern SaaS solutions designed for multi-tenancy (many, possibly all clients share one installation of the software) certainly bring advantages in deployment time and ease of upgrade, but traditional ERP vendors may also have advantages like higher flexibility, albeit coming at a cost. We are sure that the SaaS model is going to grow and will gain market share. Understanding both worlds, we also see how traditional ERP vendors struggle to bend their products towards a SaaS model, as they weren't initially designed for it. However, some of these vendors have considerable financial and intellectual fire power, so it can't be said they won't be able to turn the tide.
What is the right solution for your organisation at this point in time, can only be decided by sound analysis, not by listening to the war of sales buzzwords.
If you see through the marketing speak, you can very well include vendors offering SaaS and traditional models into your selection process, should your strategy not give a clear direction on this from the outset. Sure, they are more difficult to compare than vendors coming from the same model, but, if you understand both worlds, a sound comparison is still possible. This way you may also end up with the same vendor being on your short list more than once, e.g. SAP ERP, SAP ByDesign, and SAP ERP packaged as an almost SaaS solution by a partner - all competing against each other and against Workday and Oracle...
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