The phenomenon of software as a service (SaaS) has changed the way
organisations access their applications, as more and more users deploy
hosted software delivered direct to a web browser.
The range of applications and services available over public and private networks has also mushroomed as networks have grown more robust and reliable.
As a result, SaaS is being used for many types of applications. E-mail is probably the biggest growth area analyst Gartner even believes that e-mail is leading the way for the mainstream adoption of SaaS, which it views as coming under the banner of cloud computing.
Gartner has predicted that the percentage of commercial mailboxes using a SaaS model will grow from 1% of enterprise seats in 2007 to 20% in 2012. The expansion will be driven by falling prices and new e-mail service providers, which will include established software suppliers.
Matthew Cain, research vice-president at Gartner, says, "Events during the past year have created the conditions for the rapid growth of the cloud delivery model for enterprise e-mail, with companies such as Google, Yahoo, Dell and Microsoft all making major investments in cloud computing."
Webmail
"Webmail is increasingly seen as a viable option for business, and Google's seriousness in this area can be gauged through its acquisition of Postini last year, one of the main SaaS-based e-mail security vendors," he says.
But Cain predicts that traditional e-mail SaaS suppliers will come under tremendous price pressure from "mega-scale vendors", which will mean more end-users with under 1,000 seats gaining from the lower-cost cloud approach.
When it comes to enterprise security, organisations can now put together whole security stacks based on SaaS.
Helpdesk and backup are also popular SaaS applications, and many organisations are even using hosted supply chain, accounting and business management software - areas once dominated by monolithic in-house applications.
SaaS penetrates
Craig Roth, vice-president and service director at Burton Group, recently carried out a study of 318 North American SaaS users across a range of industries.
He says that improvements in rich internet applications, and faster and more ubiquitous internet connections, have allowed SaaS to be applied to "practically any application category".
Applications such as Google Apps have also demonstrated that highly interactive applications, such as word processors and spreadsheets, can be delivered through SaaS.
Roth says, "Web conferencing is the most common SaaS in enterprise use, which is not surprising since it was historically rooted in a SaaS model and involves less information security risk and integration.
"The human resources SaaS category [HR, benefits, payroll, and recruitment] is also popular for enterprise-wide usage. SaaS e-mail is more likely to enjoy enterprise use in small organisations.
"I believe that ERP, blogs, wikis, e-commerce, and enterprise content management are set to double SaaS usage in the next two years. In each of these categories about as many respondents indicated they were likely to adopt them as SaaS in the next 24 months as were already currently using SaaS."
Testing
Another growing SaaS sweet spot is application testing, says Bola Rotibi, principal analyst at Macehiter Ward-Dutton.
She says the attraction of SaaS is twofold: applications come from lower-cost cloud computing (which offers internet-based SaaS) and can be harnessed to powerful and time-saving grid computing (which uses multiple connected servers). Organisations can therefore effectively ramp up their processing capabilities by harnessing additional IT resources over the web on demand.
"Online development services offer organisations the ability to create virtual servers that can be used for additional processing power to develop and deploy a software stack," says Rotibi. "They can then run and test their applications on this for whatever purpose, and after prototyping them, bring them back on the premises."
Rotibi adds that users are getting more comfortable and confident with the technology, and have fewer fears about security and losing their data to a third party.
One application developed using the cloud computing model - and which is also available itself as SaaS - could point towards the future of SaaS.
The Google factor
It is hard to talk about Saas and cloud computing without looking at Google. Google has attracted many enterprises and individuals to its e-mail and search services, but its ambitions go much further.
Google Apps Premier Edition is a set of SaaS services for enterprises that offers communication, collaboration and office productivity tools over the web.
The Telegraph Media Group recently signed a deal to implement Google Apps as a key part of its plan to move towards cloud computing. The move will let Telegraph journalists and commercial staff access e-mail, documents, diaries and other information from anywhere in the world and on any device with an internet connection.
Another user, construction and engineering company Taylor Woodrow, recently transferred all 1,800 employees to Google Apps.
The company set up a Google Site to host online training documentation and videos for employees to familiarise themselves with Google Apps.
The applications Taylor Woodrow have deployed include Google Mail, Google Docs (documents, spreadsheets and presentations), Google Calendar, Google Sites and Google Talk. The company also uses Google Message Discovery for e-mail security, content policy management, discovery, and archiving services. It has been using the Google Search Appliance for over two years, to manage search and retrieve documents on its intranet.
Taylor Woodrow says it moved to Google Apps because it offered flexible and mobile communications. The hosted nature of the technology, and the inclusion of phone, e-mail and web support in the package has also saved the company around £1m.
As well as cutting the cost of running front-office applications, SaaS can also cut the cost of deploying back-office and supply chain applications.
It is not clear where Google will go next. What does seem very likely, however, is that IT directors will be making more use of Saas, particularly for hosting e-mail and e-mail/web security. Beyond these killer application areas, the take-up will depend on suppliers offering innovative services that businesses are unwilling to build themselves.
By Arif Mohamed, ComputerWeekly.com
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