SaaS - Software as a Service > SaaS Business Fundamentals > 10 Things to Know About SaaS

source: eWeek.com

Big Business,not big IT. 75 percent of SAAS contracts are signed by business, not IT, management. Central IT initially ignored SAAS by omission and commission and was not involved in acquiring it, but the dynamics are changing. IT departments are realizing that SAAS isnt going away and IT must get involved.

2.	It's Not Just for Little Guys. While many have doubted that SAAS could become a true enterprise-class application delivery model, 75 percent of SAAS revenue is generated from enterprises with revenue of over $1 billion.

3.	What Service Agreement? Sixty-five percent of SAAS deals have no SLA (service-level agreement) attached to them. That means customers are dependent on the good graces--and data centers--of vendors.

4.	It's Not Just CRM Anymore. CRM (customer relationship management) applications make up no more than 20 percent of the overall SAAS market. Other applications include ERP (enterprise resource planning), content, communication and collaboration, office suites, and supply chain management.

It's a Global Market. Some of the largest SAAS implementations are outside the United States, like Salesforce.coms Japan Post deal, which is providing SAAS for 45,000 users. In a European study, cost reduction, particularly in power requirements, turned out to be the key reasons 88% of European businesses wanted to invest in SAAS.

Beyond Multitenancy. While Salesforce.com has put multitenancy at the heart of SAAS application discussions, analysts say vendors moves to rearchitect software for multitenancy as it exists today will probably not be the end of the journey. Further rearchitecting will be likely to fully exploit the emerging infrastructure and platforms from Google, Amazon.com, Sun Microsystems, and others.

Client/Server Still Wins on Security. Security is the main worry for companies considering adopting SAAS, followed by fears of loss of control and reliability. SAAS is not inherently safer than a hosted app, but companies can require that the SAAS vendor have appropriate security accreditations beyond what is possible in their own data centres.

Not for Everything. There are applications and categories of applications that will likely never see broad adoption of a SAAS model, including those that require high-volume, real-time integration, extensive customization or near-perfect availability. Few large manufacturers are asking how to move global execution-system applications to SAAS.

9.	Pricing: More that Meets the Eye. SAAS pricing is not as simple as it looks. Additional charges often apply for support, configuration services, additional functionality or exceeding a preset storage limit.

10.	Bite at Contract's End. The end of an SAAS contract can bring hikes in subscription fees if users decide to stay with the service, or hidden charges if they decide to leave.