Despite a sluggish economy, job losses and relatively flat IT budgets, the corporate appetite for software-as-a-service (SaaS) continues to rise at an amazing pace. So surprising was this “perfect storm” of convergence around SaaS that IDC recently increased its SaaS growth projection for 2009 from 36 percent growth to 40.5 percent growth over 2008.
What makes this new software delivery trend truly unique is that, according to Forrester Research, growth was driven primarily by business units attempting to free themselves of IT, much as desktop computing first infiltrated the corporate world when business units slipped PCs in the back door under “office equipment” invoices. It goes without saying that business units will continue to pursue innovation that SaaS offers and thwart IT control by using their own operational dollars.
The SaaS transformation will only serve to manifest another problem within the business itself: Corporate objectives, such as improved retention, reduced costs and increased productivity, often land upon line-of-business management with little thought to the staff, goals and budgets within IT. While alignment between departments and divisions are not easily solved, IT needs to evolve from its traditional role of on-premise controller to that of a contributor to each SaaS deployment. No department is better suited than IT to support the security, data quality and integration issues of SaaS.
Traditionally, IT departments are entrusted with infrastructure and vendor selection but must evolve from gatekeeper of the “T” of technology, to being the delivery person of the “I” of information. The IT challenge is how to meet “information” needs with timely delivery of high-quality data across a growing number of SaaS applications. IT departments are still perceived as holding steadfast on “approved vendor” selection standards, often to the detriment of their business units and innovation.
IT organizations must quickly step “into the breach” and show proactive support of SaaS where it can transform the business. IT must redefine itself as a SaaS steward, much like network administration roles emerged in the move to client/server software, security and Java specialists during the Internet emergence, and the specialized help desk staff as BlackBerrys became ubiquitous.
To understand what stewardship entails, two essential questions must first be answered:
- What assets are being entrusted to IT? Stewardship of what?
- What activities are involved in taking stewardship? Conducting, supervising or managing?
The SaaS steward will be entrusted with quality of data and will not attempt to control it. The SaaS steward will manage the transformation and delivery of data, to SaaS providers, but will not supervise their technology. The SaaS steward will supervise an audit of data privacy and security but not conduct vendor selection. IT departments, and SaaS stewards themselves, will be measured on speed of deployment, not focused inward with rigid architectural policies.
Software-as–a-service has taken that on-premise concept of infrastructure control and turned it upside down, with IT now forced to respond to a new world order of data delivery. IT must prepare for life outside the firewall.
In reality, SaaS should be viewed as an IT savior because it reduces and eliminates many of the mundane infrastructure issues. IT would often remain months behind current software or hard product releases to test compatibility issues with other applications. All that is now required for user support is a browser. SaaS also allows IT to focus on core applications such as e-mail support, VOIP and Internet security that are relevant to all parts of the business.
Nicholas Carr’s new book, The Big Switch, highlights an eerily similar transformation resulting from the mass-production of the automobile. In Chapter 5 he writes, “… Ford’s plant could produce standardized Model T’s so inexpensively … dealers were selling millions for just $290 apiece. Americans abandoned electric trolleys and trams and took to the road in their own private cars. That spurred heavy investments in oil fields, refineries, and filling stations, flooding the market with inexpensive gasoline …”
The application and refinement of mass-production techniques ultimately made autos and gasoline a commodity item and eliminated most trams and trolleys in the years that followed. When faced with the potential that software, hardware and storage become nothing more than a commodity, IT departments might do well to consider how they become the new mechanic, refinery or service station to meet SaaS demands. If they don’t evolve they may find themselves irrelevant.
About the Author
Matthew Mikell leads Product Marketing for SMB markets and Software-as-a-Service (SaaS) offerings at SAS, the worlds largest privately held software company. In his global capacity, Mikell supports strategic planning, messaging and new product offerings leveraging direct and indirect channels. He previosly worked overseas for five years as Manager of Business Development and Director of Alliances & Channel Sales at SAS International in Heidelberg, Germany.