Via SDExec: Jim Nasmith, the CIO of a Fortune 500 company, called a meeting with his VP of Procurement, Steve Hightower, regarding purchasing a new software package. The software vendor had given them several purchasing options labeled "Software as a Service", and Jim wanted to analyze them to achieve the lowest cost of ownership.

One of the options was per-year subscription pricing rather than paying an up-front license. Jim and Steve added up the total costs for both possibilities over five years, and found that subscription pricing cost even more than paying for a perpetual license. The terms also allowed the software vendor to increase subscription prices after the third year, and Jim would have to continue paying each year for the software beyond five years. "This subscription pricing is just a way for the software vendor to charge us even more," Jim said. "We can finance the cost of the license and pay less than the vendor's subscription price."

The software vendor also had offered to host the software in its data center. Jim calculated his internal incremental costs to run the software internally in his shared data center, and again was surprised that the vendor's hosting charges were more than his alternative. "The vendor said they could operate their software more efficiently than we could, but where are the cost savings for us?" Jim asked.

"Plus, the implementation project will still take many months and cost almost a million dollars, and we will have to pay the vendor to perform an upgrade every few years. Maybe this 'Software-as-a-Service' trend isn't all it's cracked up to be," Jim concluded.

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Via Yahoo/Infoword Salesforce.com CEO Marc Benioff unveiled plans to transform his company into the iTunes of the business application world and laid the groundwork for AppExchange OEM Edition, the companyas newest service.

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From David Linthicum's Channel: I just got off the phone with a friend of mine who is looking to connect their existing enterprise accounting system to an ERP service provider, an SaaS. They are using a consulting organization who told my friend that he had a avery simple integration issuea and that they could aprogram the connections for about $50 K.a Thus, ahe did not need an integration product.a Arrrrrg!Okay, Iam very sensitive about this because I wrote a book about this about 10 years ago, and still people miss the larger points, and are indeed making the same mistakes today. Itas almost like the 1980s are making a comeback, so much so Iam looking for the mullet haircuts. The fact is the rise of SaaS means that integration is a new issue with many smaller and more naive enterprises, and many are making poor decisions about integration.

Here we go again:

Say you need to connect your existing ERP systems up to your SaaS CRM system; both have well defined interfaces, either proprietary or Web services, for instance. While you can certainly pay a couple of guys for a couple of weeks to program the interaction with the interfaces, and the movement of the information from one system to another, and it may indeed work (at first), youall find the approach is fundamentally flawed. Why?

The core issue is that the volatility of the integration can not be addressed in a single domain, but they do it with code, at the point. Thus, as semantics change, interfaces change, systems are added and deleted, than itas a reprogramming and testing job each an every time. Integration should be a configuration exercise, not a programming exercise, especially when considered in the context of a SOA.

The end result when you try to program to success is an ongoing maintenance programming exercise that ends up costing many times the cost of the first programming effort, thus why consulting firms like to sell integration programming. Moreover, lacking core integration tools such as transformation, routing, adapters, flow control, transactions, etc., means that your programming solution wonat be a complete solution, and thus not effective in the long term. In fact, could cost you more than money, such as customers that leave after you drop their orders 3 or 4 times due to bad integration.

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Via Computer World Vedior North America isn't just dabbling with software delivered as a service. It's betting the farm on the model. The $US1 billion company is in the process of implementing Bullhorn's hosted staffing and recruiting software across its myriad business units.

Staffing and recruiting are not ancillary activities for Vedior they are the company's business: Vedior provides temporary and permanent placement services across a broad range of sectors. Anyone, from a traveling doctor or security guard to a mushroom picker or forklift operator, might find a job through one of Vedior's 280 offices.

Entrusting such a mission-critical system to an outside vendor wasn't an easy decision for CIO Peter Ross -- nor was it one without risk. "We need a very good sales and recruiting organization. That activity is critical," Ross says. "We mess up the candidates, or we mess up the clients -- we're dead."

One reason Vedior chose a hosted solution is the consistency it provides. As employees sign contracts, screen candidates and fill job orders, having a single staffing and recruiting platform gives the company centralized access to performance metrics in near real time. This information would have been filtered to management eventually, but now divisional and branch managers can see instantly what's going on in their businesses, Ross says.

In addition, individual operating units don't have to dedicate IT resources to upgrade applications each time a new feature is required. Bullhorn's hosted software combines e-mail, calendaring, applicant tracking, CRM and job management features, and provides Vedior recruiters a front-end interface to communicate in real time with clients, job candidates and colleagues.

"A lot of this activity really doesn't generate any revenue unless [it] lands in a deal," Ross says. So the more the software can compress the time it takes for candidates to apply, clients to place job orders, and recruiters to match up candidates and clients, the better.

With so many divisions to satisfy, choosing software came down to finding a vendor that understood the staffing world.

A key part of completing the deal was crafting a service-level agreement (SLA). More significant than ironing out precise metrics, however, was the opportunity the process gave Vedior to confirm that Bullhorn understood what Vedior needed -- for example, guaranteed uptime, not only during traditional business hours but also after hours, when recruiters have the best chance of catching up with candidates.

That business insight is critical. Unless it's certain a service provider understands a company's expectations, don't do a deal, Ross recommends. "If you have any hesitation that they don't get what you do, then don't do it. You'll get stuck."

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USinternetworking, Inc., (USi) Founded in 1998 , USi is the most experienced enterprise Application Service Provider (ASP) on the market, specializing in managed enterprise and eBusiness solutions and on-demand services for Fortune 1000 companies. USi delivers application outsourcing, remote management, professional services, ISV enablement, eBusiness development and hosting, and information security and risk management services to more than 150 world-class enterprise clients in more than 30 countries.

USi helps its clients maximize the business value of their enterprise and eBusiness solutions while lowering their technology investments. As more companies recognize the benefits of deploying their enterprise and eBusiness software as a continuously supported, fully integrated service, market opportunities for Application Service Providers (ASPs) and managed services providers will continue to grow.

USi's clients have access to a diversified portfolio of service offerings, including: AribaA(R), DemandwareA(R), MarketLiveA(R), MicrosoftA(R), OracleA(R), PeopleSoftA(R), and SiebelA(R), as well as eCommerce solutions developed and delivered by USi. USi's TopLineISVSM program gives independent software vendors (ISVs) the immediate advantage of Software-as-a-Service (SaaS) by delivering their software to a larger client base through USi's hosted model.

What sets USi apart?

* Experience. SaaS is the wave of the future; being the first to recognize this has given USi a huge head-start over our competitors, and a wealth of experience as an SaaS provider.
* Expertise. USi has achieved some of the largest and most complex software implementations to date for the world's top companies. We have more than 150 enterprise and numerous small and medium sized businesses as clients.

More about Usi

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Via Enterprise Systems : At its annual customer confab this week, Informatica Corp. announced an ambitious foray into software-as-a-service (SaaS) data integration, touting a astrategic partnershipa with salesforce.com, upcoming connectivity into salesforce.com CRM applications, and by early next year, a full-fledged SaaS version of its data integration platform. Is it a Hail Mary pass from a gutsy Informatica or, instead, an indication of CEO Sohaib Abbasias prescience?

Informaticaawhich likes to bill itself as the aSwitzerlanda of data integrationanow finds itself surprisingly engaged for a supposedly neutral power. In the high end, Informatica has its hands full with data integration heavyweights IBM Corp. and SAS Institute Inc.; in the mid-market, with commodity ETL players (and relational database superstars) Microsoft Corp. and Oracle Corp.; and, just about everywhere else, with BI upstarts Business Objects SA and Information Builders Inc. So Informatica canat afford to be on autopilot.

Brian Gentile, Informaticaas chief marketing officer, says autopilot is the last thing he and other company executives have in mind. He cites Informaticaas ambitious foray into software-as-a-service (SaaS) data integration as a case in point. Not only did Informatica announce its own, albeit primitive, SaaS ETL offering, Gentile points out, but it also notched deals with astrategic partnera Salesforce.com. Informatica also outlined a strategy to partner with other SaaS BI, CRM, and business process outsourcing (BPO) providers.

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Via CRN : In a merger ofA CRM software-as-a-service players , RightNow Technologies said Monday that it is buying Salesnet.

Both RightNow, of Bozeman, Mont. and Salesnet offer CRM and SFA solutions on a pay-as-you-go service model.

The buy brings RightNow "substantial sales workflow domain expertise to our business, accelerates our roadmap by more than a year and adds hundreds of customers,a RightNow CEO Greg Gianforte said in a statement released Monday afternoon.

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In the March issue of Redmond Channel Partner, Rich Freeman's cover story took a comprehensive look at Software as a Service. The gist was that Microsoft is moving rapidly toward this new Internet-based delivery model, and, as a partner, you need to start thinking about where that will leave you.

When we started working on the article, a lot of information was coming out of Microsoft about this services push, including internal memos from Bill Gates and Ray Ozzie and the company's efforts on Windows Live and Office Live.

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"Outsourcing" is a word loved by some and hated by others. Frustration is understandable, as many manufacturing roles, call center services, and openings in almost every industry have been shifted to other specialist organizations inside and outside the country. But the economic benefits and ability to follow-the-sun/operate 24x7 has had tremendous impact on many businesses as well. However, it seems that the outsourcing label is being applied by more people in more instances to SaaS, and it's important to understand the differences between having someone else help manage your IT services and subcribing to application functionality or business processes over the web.

Typically, outsourcing is used because labor can be hired for less money or outsourcers can operate more efficiently by spreading investments and cost across a wide group of customers.A While using a SaaS provider can save money, their services are generally employed because customers can turn them on nearly immediately (fast time to value), because they are specialists in a given application segment where they blend optimized feature/function/performance with fully managing the compute environment needed to deliver the functionality (shift complexity), and they can offer a lower, more predictable spend over time (shift risk). This allows the business to focus on business:

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Genius Incorporatedac,A an innovator of on-demand personal web analytics solutions for sales and marketing professionals, has recently launched SalesGenius product.A SalesGenius is the first web service that lets sales reps instantly qualify prospects by tracking individual visits to corporate web sites, without any programming or IT involvement.The patent-pending Genius Trackerac, an Instant Messenger-like client, alerts users immediately when prospects open their SalesGenius e-mail and opt to click to the corporate web site. One-click replay shows which pages have been visited and for how long. The result is that sales professionals have instant access to the information they need to qualify prospective customers and target their specific interests. Sales professionals can then prioritize call-backs to the most interested prospects and offer personalized follow-up.

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Infoworld: SAP AG is buying its way into providing on-demand supplier relationship management (SRM) software through the planned all-cash purchase of Frictionless Commerce Inc. announced Wednesday.

SAP didn't disclose any financial details about the transaction, which it announced at its U.S. Sapphire user conference in Orlando. The company expects to close the deal in July.

The Frictionless software already integrates with mySAP SRM, allowing customers to migrate between on-demand and on-premise SRM, SAP executives said.

The news comes the same day that SAP announced its first hybrid CRM (customer relationship management) software with the release of SAP CRM 2006s suite. The idea is that users can move between hosted CRM and on-premise CRM as their needs change, according to Shai Agassi, president of SAP's product and technology group,

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Via ITWales.com Software giant Microsoft is to focus on providing more software-as-a-service (SaaS) for firms, chief executive Steve Ballmer has said.

The company already has a number of services for small business in beta, including hosting, collaborative email and applications for managing employees and customers. Basic editions of the products are currently available for free, with more advanced subscriptions starting at $29.95 a month.

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SaaS is one of those buzzwords that have changed over the years. First, we called them application service providers (ASP), then just service providers, and now software as a service (SaaS). I think there is an unwritten rule that you have to switch buzzwords at least every tow years, else lose your market.

However, as I'm thinking about what these guys are becoming, I think their purpose is changing, thus the name should change. Hear me out.

In the first generation SaaS technology, the SaaS guys where standing up very sophisticated applications, typically driven through the user interfaces. In essence they replicated enterprise applications on the Web, first in a poor way, now they are actually better than their enterprise-based counterparts. Salesforce.com is the best example of that.

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Axentis, a provider of governance, risk and compliance (GRC) management solutions, today announced continued rapid customer adoption of its software-as-a-service (SaaS) based GRC solution, Axentis Enterprise. Axentis currently serves more than 700,000 users from leading Global 2000 organizations, the largest user-base for any GRC or enterprise SaaS application.

aThe recent customer growth validates the companyas original vision of providing leading organizations with a consistent and integrated method to managing all key governance, risk and compliance applications,a said Scott Berkey, CEO of Axentis. aAxentis customers have pressing requirements, and our SaaS solution allows them to deploy applications much more quickly and at a significantly lower cost than with traditional software offerings. The end result is an effective GRC initiative that puts the company in a position to succeed.a

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News Via TheOpenPress Springboard Research, a dynamic innovator in the IT Market Research industry, today released a study showing strong growth in adoption levels across Asia for Software as a Service (SaaS) in 2005, and even brighter prospects ahead. The regional market (excluding Japan) saw revenues increase over 80% to US$80 million in 2005, and the market is expected to grow to US$501 million by 2008.

SaaS is an emerging software delivery model in which application software is delivered remotely through a subscription-based fee rather than being sold for perpetual use. The users do not buy the license of the software, but only a right to use it. SaaS is also referred to as On-Demand Software and On-Demand Application.

aThe SaaS market is receiving considerable focus from software vendors operating in various spheres of the industry,a noted Dane Anderson, Research Vice President at Springboard Research. aGlobal software giants, local ISVs and emerging on-demand software vendors all have a healthy dose of respect for the power of SaaS to disrupt the competitive frameworks of the software industry in the future.a

A survey of Asian Small and Medium-sized Businesses (SMBs) identified cost benefits as the primary driver for SaaS adoption, but ease of use and business benefits were also cited as important market accelerators. Of the surveyed SMBs that had adopted SaaS, estimated savings ranged from 5-55% compared to the traditional licensed model, with the majority (58%) reporting estimated savings of between 20-30%.

Although SMBs represent the primary SaaS market in Asia today, a key study finding is that adoption is picking up in the large enterprise sector as well. Large enterprises are far less likely to leverage the SaaS model for core applications such as ERP, but for applications deemed less mission-critical and those on the edge of their infrastructures, SaaS is receiving considerable interest.

Customer Relationship Management (CRM) currently represents half of total SaaS revenue in Asia, followed by Web Conferencing and Collaboration and back-office applications. However, a number of other software market sectors are now gearing up for a SaaS push. Two segments in particular that appear poised for strong SaaS advances over the next several years are Security and Collaboration.

Given the cultural and economic complexity and diversity of the Asia Pacific region, the adoption of SaaS is not uniform across the region. Australia and New Zealand are closer to North America in terms of SaaS adoption trends, and Australia is the largest SaaS market in the region. China and India are seen as countries with the greatest potential in the mid to long term future.

Asian software vendors are slowly entering the SaaS marketplace, but North American vendors currently dominate the market. The top 5 vendors a Salesforce.com, WebEx, RightNow Technologies, Oracle and NetSuite a represent more than 50% of market revenues, and their dominance is likely to continue for the next few years.

About this Study
This Springboard Research report a The Software as a Service Market in Asia Pacific, 2005 to 2008: Blazing New Routes-to-Market a examines the key trends in the Asia Pacific Enterprise Software as a Service (SaaS) market. A key focus area of the report is in providing an array of market data including market size and growth forecasts for key application segments of the enterprise SaaS market in Asia Pacific excluding Japan. A survey of 210 CIOs and IT decision-makers at small and medium enterprises in Australia, China, India, Korea, Malaysia, the Philippines and Singapore assesses the level of awareness and adoption of SaaS in the region. The report also profiles leading SaaS vendors in the region, their offerings and business strategies.

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On-demand CRM vendor NetSuite, Inc. has announced that awithin six months of implementation of NetSuite, Portland, Oregon-based Learning.com has achieved immediate results by accelerating business processes 15 fold and is on track to double its business from the previous year.aA With NetSuite, Learning.com has automated revenue recognition, which eliminated data-entry errors and duplicate spreadsheets, and expedited invoice processing-without adding staff. Previously usingSalesforce.comA and QuickBooks, Learning.com standardized its entire front and back office operations on NetSuite for one, integrated software application.

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Business software maker SAP AG will unveil a module for its hosted CRM offering at its Sapphire customer event next week.

SAP Marketing on-demand will be the second of three core CRM (customer relationship management) modules that the German company plans to offer this year, SAP spokesman Bill Wohl said Wednesday.

SAP launched the first module, SAP Sales on-demand, in February and made its long-awaited dive into the hosted, subscription-based CRM on-demand market where rival Salesforce.com has a strong presence. The third module, SAP Service on-demand, is expected next quarter.

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Managing business processes should be easy; so why are so many organisations not in control? We all know it is just a matter of:

• Defining the processes related to a particular task (account opening, expense claiming, order processing...)


• When a process starts, passing responsibility on to the correct human or computer process for the next step.


• Providing all the records, files and documents required, whether they are digital or hard copy, to enable the step to be processed.


• Dealing with alerts, exception and overdue situations.


• Managing all the processes and being able to understand the status of all the processes, and then act when required.


• Reviewing the process definitions regularly to see how they can be improved.

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Extract from SaaS Players Jostle For Position