Supplier Enablement

SaaS matures but money rules OK

In July 2006 I mentioned Microsoft's announcement of Software as a Service. Click here for a refresh of that.

More recently I have found an interesting note on Wikipedia that talks about the SaaS maturity model.

Well, this is quite academic at the moment aside from providing developers a reference point as customers are more concerned with the 'why' and not the 'how' are you doing it.

If you search on SaaS in Wikepedia you will find the maturity model or click here to go directly there.

The real debate is about 'why' with the choices being to go with the on-premises delivery of software or use SaaS. It is a passionate debate that is riddled with the vested interests of IT departments who want to preserve control of IT resources and their vendors who want to hang on to their customary license revenues.

Does the person at the top who carries the buck care?

Who is advising him/her and what will they say about the choices?

IT say - This is a strategic resource and we know our business better than any third-party service provider. We can deliver it cheaper and, importantly, we control the resource.

Finance say - our choice is upfront capital expenditure and the cost of our resources (salaries etc.) to have the system on-premises or monthly operational expenses with SaaS that we align with use and can turn off if we don't need it in the future or for that matter change if something better comes along.

If the on-premises deployment fails to deliver then the money is lost. The financial risk with SaaS is reduced and the time to benefit is shorter because we are using an existing service.

So new projects will not only be subject to the usual rigors of the 'business case' but also the evaluation of on-premises versus SaaS.

Interesting times ahead.

Click here for insight into using SaaS to deliver connectivity in the supply chain.

Labels: business case, on-premises, SaaS, supplier enablement

posted by FrankB @ Monday, May 14, 2007