Has the economic crisis and decreased IT budgets had an effect on why a customer would choose Software-as-a-Service (SaaS)? I recently had the chance to ask Kia Behnia, Chief Technology Officer of BMC, this question and more in a podcast interview.
In our podcast, Behnia also gives his take on the the maturity of the SaaS market, and whether enterprise customers are more willing to let others host and manage their IT applications these days.
Listen in to also find out more about Remedy, BMC's SaaS offering, as well as why BMC is looking to expand its offerings of SaaS solutions.
Listen to or download the 6:36 podcast below:
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For our audience members who aren't familiar with BMC, could just provide a brief overview of the company for us?
Sure. So BMC Software has been around for a long time. We've been in the system and service management space for the last 28 years and really helped customers manage their transition of technology throughout that time from having mainframe-based solutions, to client server, to web, and now to the cloud. Systems and service management is the only thing we do and we have over 15,000 customers in 120 countries.
Can you explain what makes the Remedy offering a good fit for a SaaS offering?
Absolutely. So as many of your listeners know, the Remedy Suite of IT Service Management Products has been very well established as a leader in terms of enterprise service management. And we've been working with a lot of clients who were actually hosters, who were service providers, managed service providers, who are taking our software and offering it to their end customers and clients for the last four or five years.
What we've seen is the change in terms of customer behavior that many of the customers are actually looking to consume these applications in more and more of an on-demand model. The reason service management makes a lot of sense to be delivered in an on-demand model is that many customers are looking to manager services. These services are increasingly being delivered over the web. It only makes sense for the management solution to also be delivered on-demand.
How would you classify the maturity of the SaaS market?
Well, I think the SaaS market is maturing rapidly. If you look at Salesforce.com and when they started really promoting this concept, it took them ten years to kind of get many enterprises comfortable with the notion that these applications could be delivered securely and with service levels over the web. It is not for all types of applications so we certainly see customers who have regulatory requirements or performance requirements that make certain apps not a good fit.
And one of the things that's very important in terms of what we've heard from customers is they would like choice. They would like to have the options to be able to consume the enterprise software that they like in a traditional on-premise model or be able to consume the very same applications over the web in a SaaS model. And there are very few organizations and vendors today that can offer and fulfill those set of choices with the same architecture and the same solution.
Are enterprise customers now in 2010 more willing to let others host and manage their IT applications in your opinion?
I think they are but this varies by size, and by geography, and vertical. The smaller organizations I think are much more comfortable in looking at this type of software in an on-demand fashion. They're comfortable with that. They really don't have the requirements that some of the larger enterprises have that will lead to the need for customization or close proximity to their datacenter.
But we're also seeing a lot of the mid-size and larger enterprises look at on-demand, in some cases, as hybrid model where they look at I might need an on-demand solution for a particular geography or a department and I need that to coexist happily with my on-premise solution that I may have. So we are seeing the adoption increase. And certainly, 2010 has been a very good year for us in terms of getting feedback from customers around this is becoming more mainstream.
In your opinion, have recent events such as the economic crisis and therefore decreased IT budgets, have they had an effect on why a customer would choose SaaS?
I certainly think that economics of SaaS are absolutely great, particularly, in environments where the existing technology that the customer have is outdated and is very legacy so they're going to have to switch to something new. And oftentimes, customers don't have the capital budget to go back and re-buy those licenses. So going to a SaaS model is a great option if yo have legacy version of software that might have been six, seven years old and that vendor hasn't done a good job of keeping up with the software and adopting to new features. You can use the economics aspects of SaaS to quickly get onboard and go to a pay-per-use model.
And one of the advantages that we have in our offering is that if a customer chooses at some point to come back to on-premise from that on-demand model, we can support that because, again, the same set of software, the same architecture, the same code effectively is being run both into on-premise and the on-demand model. And we think that that really allows the enterprises to have the flexibility to look at their needs at that point and time and not have to potentially pick software that could get them locked into one form or the other, the traditional on-premise or the on-demand. And that's what resonating a lot with our customers.
And is BMC looking to expand its offering of SaaS solutions?
Yeah, absolutely. We're looking across our portfolio and also new offerings and looking at what makes sense to be delivered in a SaaS model. Again, a lot of that is driven by customer need. One thing I should mention to your listeners is that we also made an announcement in November with Salesforce.com to offer a new application on the Force.com platform and that application -- actually, there's three of them. One is basic help desk, the other one's inventory, the other one's the basic self-service management. Its targeted more at the departmental or smaller organizations. And so we view ourselves as having the broadest portfolio of offerings, not just around service management, but also other solutions that we'll look at over time.
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