Evaluating Software as a Service (SaaS)

Almost every technology vendor is talking about the cloud, presenting their solutions and explaining how it has embraced the concept of cloud computing. How effective it is? The cost savings involved? and a lot more.

Cloud computing is Internet-based computing, whereby shared resources, software and information, are provided to computers and other devices on-demand. Cloud computing allows consumers and businesses to use applications without installation and access their personal files at any computer with internet access. This technology allows for much more efficient computing by centralizing storage, memory, processing and bandwidth. A simple example of cloud computing is Yahoo email or Gmail etc.

Now in case you’re wondering why I am talking about cloud computing but in fact my topic is about Software as a Service (SaaS)? The definition between cloud computing and SaaS is almost the same but not quite. There’a a very thin line separating the two.

Cloud computing refers to the bigger picture – basically the broad concept of using the internet to allow people to access technology-enabled services. SaaS on the other hand is software that’s owned, delivered, and managed remotely by one or more providers. It also “allows a sharing of application processing and storage resources in a one-to-many environment on a pay-for-use basis, or as a subscription.

SaaS adoption is growing fast because of its payment nature – pay for use basis or as a subscription. Which means companies need not invest too much on their infrastructure because SaaS providers provides the hardware and software for the companies. So given all the benefits of SaaS, the next question is – who is the right SaaS partner for my company?

According to Gartner, Inc., SaaS will likely penetrate every company at one level or another and recommends that organizations consider four steps when evaluating SaaS:

Determine Value
SaaS is not a panacea, and companies need to evaluate and understand the trade-offs that SaaS presents. While it limits infrastructure overheads and management, and lowers short- to medium-term total cost of ownership, third-party application tools are limited and SaaS applications cannot be counted as assets on a balance sheet.

Develop Governance
The next step is to develop a SaaS policy and governance document. This document should be a collaborative effort between the business and IT to create internal and external SaaS governance model.

Evaluate Vendors
Organizations need to evaluate SaaS vendors for specific application needs as applicable. A vendor’s commitment to SaaS is not just measured in business performance, but in technical considerations, such as operations management capabilities.

Develop an Integration Road Map
This step will be a continuous process of developing an integration road map on how SaaS applications will integrate with on-premises applications and other SaaS solutions deployed.

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