I started my professional career at the start of a major shift from client/server applications to the web-based applications. Subsequently, almost all software products migrated to the HTML front-end and the web-based presentation layer became the choice for all user interactions. Fast forward to today, the advancements of web-based computing and communication technologies have created a great turbulence and major shift in the enterprise application architectures, yet again. This time, it is not about client-server vs. web-based applications. It is the delivery of software as a service (SaaS) in lieu of an in-premise software deployment. In both cases, the user interface is still a web application. However, the concept of SaaS moves the actual storage of data and execution of application logic outside of enterprises’ firewalls, and into the cloud.
It is not the first time that the concept of SaaS has hit the enterprise technology departments. During the dot-com bubble days, the same concept was captured as application service provider (ASP) or managed service providers (MSP). The dot-com bust bankrupted most of those ASP and MSP providers but some did manage to survive. Now, those survivors have been joined by Microsoft Live , Salesforce.com, Google Apps, and Amazon S3 among others. It is a fair question to ask as what is different today vs. five years ago that makes SaaS is a viable option. I believe there are three major differences.
First is the ubiquity of computers connected to the Internet, the dramatic improvements in the communication bandwidth, and the cheaper availability of the storage and computing infrastructures. For example, in 2000, I paid $65 for my home Internet line. In contrast, today, I only pay $20 for my home Internet line that is actually faster and more reliable. It is almost a 200% decrease in cost with increases in speed, reliability and availability.
Second is the change in the way people use Internet. Though, younger generation has led the way here, the adults have also caught-up on the use of Wikis, Facebook, Mobile Web, Instant Messaging, Blogging and many other communications mechanisms. All of this has made Internet as ubiquitous as TVs, thus, the average users have become comfortable using the Internet and related applications.
Third difference that I believe is pushing enterprise technology leaders over the edge is the entrance of big players in the SaaS space. Large enterprises only do business with big software vendors because they want reliability and future assurance. Though, Google, Amazon and Salesforce.com were small companies five years, today, they are considered big companies with billions of dollars in revenues. Microsoft’ CTO, Ray Ozzie, recognized the shift two years ago. And even SAP, the biggest enterprise application software vendor, has admitted that SaaS has become a viable for small and medium enterprises. Of course, time will move those deployments to large enterprises.
However, make not mistake. SaaS model is a major change in how enterprise software is developed, deployed, customized and supported. It is not a mere change from fat client user interfaces to web interfaces as we had in the early days of Internet. It requires SaaS providers to not only develop but also deploy applications and platforms that are very highly available, highly secure, highly customizable, and web intergrate-able. It is not an easy task by any measure and certainly it is not a task that can be accomplished in few months or sitting in a closed lab for few years. The only way to do this is to deploy these SaaS applications on a trial basis, learn from those deployments, adapt the platform and software based on lessons, and then upgrade existing deployments seamlessly – all while keeping the customized logic intact.
The enterprise software developers and customization engineers might dismiss SaaS due to its limited customization capabilities but they would be wrong about it. Every major shift requires us to re-think our process, cultures, organizations, strategy and talents. This shift to SaaS warrants a re-thinking process. It is a change that will take five-ten years to materialize. But it is a change that will hit your processes, people, organizations, business systems in every way you can think of. Realizing the shift is only a start.
