‘Software as a service’ will have business continuity implications

The market for software as a service (SaaS) continues to pick up steam. According to Gartner the worldwide SaaS market reached $6.3 billion in 2006 and is forecast to grow to $19.3 billion by year-end 2011.

SaaS is hosted software based on a single set of common code and data definitions that are consumed in a one-to-many model by all contracted customers, at any time, on a pay-for-use basis, or as a subscription based on usage metrics.

“The dysfunction of the client/server era is driving alternative approaches to IT development, delivery and management, which SaaS is the most apparent version of,” said Ben Pring, research vice president for Gartner. “There is now a widespread consensus among the movers and shakers of the IT industry that SaaS is an important and meaningful issue which can no longer be regarded as the ‘lunatic fringe.’”

Saas adoption is broadening out from areas such as customer relationship management and human resources into new areas such as procurement and compliance management. However, the scale of change involved in moving to a SaaS approach is proving hard for many vendors to manage, says Gartner.

Although the SaaS market is still relatively small, service providers need to make important strategic decisions now. Gartner analysts said that the scale of change that SaaS will produce requires providers to make the following changes soon so they can keep ahead of the SaaS wave:
* Use solutions built on next-generation Web services, SOAs and highly automated server farms to produce multi-tenant, mass-customizable solutions that facilitate agility while sustaining uniqueness at a reduced cost.
* Make strategic decisions around whether to offer SaaS as simply one element of a broader portfolio or to fully evolve toward a SaaS-based delivery model.
* Act now because of the scale of change required to successfully exploit SaaS opportunities.
* Conduct thorough due diligence to be well-placed to take advantage of opportunities and manage risk as the market evolves toward SaaS.

Gartner analysts will further discuss SaaS trends at the Gartner Outsourcing Summit, March 19-21 in Dallas.

From a business continuity perspective, the move to SaaS changes the vulnerability profile for software applications. When applications are run in-house day to day vulnerabilities are limited to the availability of the organisation’s own computing infrastructure. Under a SaaS environment these vulnerabilities remain but, in addition, applications availability becomes dependent on the provider’s computing and delivery infrastructure. A further issue also arises; that of the financial viability of the provider company, especially where special software is provided by a smaller supplier. If the SaaS goes out of business, the software being provided will become permanently unavailable; possibly with no prior notice whatsoever.

•Date: 7th March 2007 • Region: World •Type: Article •Topic: IT continuity
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