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BI in Action

Michael Dortch

SaaS and the Intelligent Enterprise: Resistance is Futile

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Boy, I do so love it when multiple minds start seeing things in similar ways in this often fractious world of business-centric IT...

So IDC, respected market-watchers, have issued a release about a new study called "Economic Crisis Response: Worldwide Software as a Service Forecast Update." In said study, IDC has increased its year-over-year growth forecast for software as a service, or SaaS, from 36% to 42% by year-end 2009. "Recent IDC surveys and customer interviews support the finding that the harsh economic climate will actually accelerate the growth prospects for the software as a service (SaaS) model as vendors position offerings as right-sized, zero-CAPEX alternatives to on-premise applications. Buyers will opt for easy-to-use subscription services which meter current use, not future capacity, and vendors and partners will look for new products and recurring revenue streams," IDC said.

This follows by something like two weeks my last published work for Aberdeen Group (my position and several others were eliminated recently), an Analyst Insight entitled "SaaS and RFID: Key Business Value Enablers in 2009." Based on a survey I conducted in September and October 2008, I found that business users are pursuing SaaS primarily to meet increasing demand for new applications, maximize the ROI of their IT investments, and manage escalating IT infrastructure costs. (You can read the entire Analyst Insight here, if you are a subscriber to Aberdeen's Vault service.)

And if that's not enough convincing, right here at ebizQ, my esteemed industry colleague Treb Ryan, CEO of OpSource, wrote a piece published just yesterday entitled "How SaaS Companies Can Survive the Downturn." Now, since Treb and his team sell solutions for SaaS and Web-based companies, his perspective is a bit more focused on them than on their customers. But the points he makes are points users should take to heart, for reasons which should become clear in another paragraph or so.

Look, here's a quick take on the bottom line of all of this. Almost none of you reading this is in the full-time business of managing software or IT infrastructures. As I've said previously here and elsewhere, the less effort and fewer resources you have to devote to such things, the more you can devote to making your business more competitively agile, by pursuing initiatives such as business intelligence.

SaaS, when implemented effectively, can deliver these and other benefits, rapidly and economically. And it can do so with and for a variety of business applications and functions, from BI itself to, perhaps ironically, IT infrastructure management. (For a great example, check out Service-now.com, if you haven't already, and compare it to traditional tools or doing nothing, as many companies do today, unfortunately for them and their customers and partners.)

If your company's already using SaaS, assess the success of incumbent efforts, and use them to map out plans for identifying and pursuing opportunities for additional deployments. If your company's not yet using SaaS, find some credible advisors and vendors, and talk to them. SaaS is not just the latest take on previous software delivery models such as application service providers or ASPs. SaaS uses modern technologies to free users from the burdens of managing traditional "bits on disks" and supporting infrastructures, so those users can focus on running their core businesses. And THAT's a truly intelligent way to go. Just make sure to pick vendors and solutions that are both sufficiently reliable, robust, and scalable to support your needs and goals today and over the long haul.

(I will have much more to say about SaaS and BI, and SaaS in general, throughout the year. However, I'm very much interested in what you have to say, so please write anytime.)

Globalization, shrinking business cycles, and increasing competitive pressures are placing demands on business managers to make faster and better decisions. Managers require both real-time visibility into their business operations and sophisticated analytical tools to help them navigate the increasingly fast paced and complex business environment.

Michael Dortch

Michael Dortch is a veteran information entrepreneur and information technology (IT) industry analyst, consultant, speaker, writer, evangelist and provocateur. He has been striving to empower buyers, sellers and users of IT solutions since 1979. Seriously! ;-)

Joe McKendrick

Joe McKendrick is an author and independent analyst who tracks the impact of information technology on management and markets. View more

Madan Sheina

Madan Sheina is principal analyst within Ovum's Software Applications group and is based in Northern California.

Madan has fifteen years' experience working in the IT industry both as an analyst and a journalist. His research covers a range of information management technologies, with a sharp focus on business intelligence, knowledge management and data integration software.

Madan is well respected in the IT industry for his clear, incisive and no-nonsense analysis style. He has advised leading ISVs on market positioning and product development strategy, IT users on product evaluation and selection, and the financial investment community on technology trends. View more


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