Moving Toward Software as a Service
We’ve all seen the news blurbs on Google’s venture into the SaaS space with the availability of their Docs and Spreadsheets beta, but what is the real impact of these announcements? Google is far from being the only company venturing into the space – they just happen to be the media darling, and so they get all the press. Microsoft itself has had a fairly healthy reception for their Office Live offerings, which, as Kevin Tolly points out in NetworkWorld, “appears to be a true software-as-a-service offering.”
But where is the real impact of SaaS? I would argue that arguments around applications to create documents and spreadsheets are irrelevant – these tools are ubiquitous, as every platform and just about every major software vendor has a solution that works. So where is the real action?
Line of business applications. Hosted applications that solve specific business problems, such as project and portfolio management, customer relationship management, and enterprise content management. Hosted apps are gaining more and more attention from the industry rags, and more often than not, their appeal is very targeted (for example, eWeeks pits 2 products against Microsoft’s Project Server here).
According to an article in October’s Baseline Magazine entitled ‘Pedals to the Metal,‘ the number of companies offering software-as-a-service is growing, but you’ll notice that few, if any, are gearing up to offer vanilla (generic) desktop productivity solutions. That’s not where they’re getting traction. Instead, they’re focusing on niche areas of expertise.
One common thread for those at the top is that most don’t actually sell software in the traditional sense—rather, they sell software as a service, in an “on-demand” model. Of the top 10 companies, eight have software-as-a-service models.
“On-demand is the right way to buy software,” says Michael Ferro Jr., CEO of Click Commerce, a provider of supply chain management software and the No. 1 company on our list with 128% year-to-year growth. “Especially for our market, you have to touch outside constituents, so most people don’t want it inside their four walls anyway.”