Business Transformation in Action

New data out of Saugatuck Research finds Software as a Service (SaaS) is gaining traction in today's enterprises. As reported in Network World, more than a quarter of companies are using at least one SaaS application, up from 11% at the beginning of 2006, the consultancy reports. Saugatuck goes on to predict that SaaS adoption will grow to 47% by the end of this year, and by 2010 it will reach at least 65% worldwide.

If Saugatuck is right, that means that SaaS adoption will double over the next few months, from 25% to 47%. This truly makes 2007 the year of SaaS.

The consultancy goes on to observe that integration with in-house software will likely require SOA, the report states. “SaaS is going to complicate and hybridize user IT and business operational environments faster, and to a greater degree, than most user and vendor executives understand at this point,� Saugatuck writes. “The vast majority of user IT departments will simply not have the resources to handle the influx of enterprise-level SaaS� expected to occur over the next seven years.

How complex can SaaS-in-house integration get? Chip Vanek, director of corporate and CRM applications for Magma Design Automation, recently led an ebizQ.net Webinar, discussing the integration challenges his company had to address as it moved to SaaS-based services. Magma, supplier of computer-aided design, relies on CRM func­tionality delivered as Soft­ware-as-a-Service (SaaS) from Salesforce. com to track orders and maintain customer satisfaction levels.

At Magma, SaaS-based appli­cations are highly integrated with onsite ERP applications to manage the compa­ny’s buy, sell, and make processes. ‘ SAP is our back- end system of record,’ Vanek explained. Vanek said that his company needed to do quite a bit of integration work to mesh data coming from the Salesforce.com system into the SAP system. ‘We have an issue where we need to take the information that we have in Salesforce and pull it back into our back-end system,’ he explained. For example, in the compa­ny’s ‘buy’ process, ‘we have hundreds of people around the world that are cre­ating purchase requisitions. We have to make sure that we have them properly approved. We needed a bi-directional synchronization between the two sys­tems.’