On-demand in demand

The term "software as a service" (SAAS) has been buzzing around IT and business departments for the last ten years or so. But as more SAAS vendors succeed in the marketplace, Brid-Aine Conway discovers that on-demand software may finally be hitting the mainstream.

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By  Brid-Aine Conway Published  March 15, 2008

The term "software as a service" (SAAS) has been buzzing around IT and business departments for the last ten years or so. But as more SAAS vendors succeed in the marketplace, Brid-Aine Conway discovers that on-demand software may finally be hitting the mainstream.

Everyone knows the IT world loves its buzzwords, its acronyms and all the other industry colloquialisms it uses to put complex technical ideas in a nutshell.

Enterprise customers are not going to continue to pay top dollar forever when they know that there are viable solutions which are as good or better at a fraction of the cost.

At times, however, these words buzz only briefly before the industry realises it has overshot itself - Microsoft Bob, handwriting recognition for PDAs and perhaps RFID being some good examples.

If the concept doesn't go the way of the dinosaurs, however, then the buzz dies for different reasons. The idea drifts into the mainstream and becomes an integral part of modern technology, usually something people can't understand how they ever lived without - like pretty much all modern technology - and it looks like SAAS may be ready to do just that.

Companies like Salesforce.com and MessageLabs have become household names through market success and, along with Google's much-publicised move into the enterprise market, they are now pulling SAAS into the mainstream consciousness.

Much of what has previously held the SAAS movement up - concerns about security, data privacy, the role of the IT department and connectivity - is being swept aside by the evidence from early adopters.

Security and data privacy are large concerns of any company considering IT outsourcing, and certainly when looking at employing a web-based software such as CRM or ERP.

"Security is probably one of the largest obstacles to mass adoption of this service," says Jesper Frederikson, head of Google's enterprise activities in the Middle East, "I think there's definitely a job for us as vendors to talk people through what it is we do and how we do it and why it's better to be secure and structured and so on, and then I think a lot of it is perception. It's getting comfortable with the fact that more and more functionality is moving off your own network into the cloud."

And the way to change people's perceptions of SAAS is for prospective customers to look at the evidence of those companies that are already using on-demand software, according to Woodson Martin, Salesforce.com's vice president of EMEA marketing.

"The customers who evaluate us look at our history and they look at the pattern of some of the largest companies in the world who are investing and managing their business processes using Salesforce.com, companies like Citibank, Cisco, and Dell. They see that these organisations have conducted deep security audits and judged the service to be up to standards," he explains.

And companies that are using SAAS back this up - they are trusting SAAS vendors on the strength of others' experience of them: "Many financial institutes are using it; the list of references that are using Salesforce and other online applications is very long and security in terms of financial transactions is very crucial," says Hussam Kajan, account manager of IT & T at Dubai World Central, a Salesforce.com customer.

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