By Josh Epstein
In today’s enterprise IT industry, the cloud has gained broad acceptance, and will continue to have an enormous impact on businesses. While there are use cases for moving enterprise workloads to cloud-based Infrastructure-as-a-Service (IaaS) offerings like AWS and Microsoft Azure, the adoption of Software-as-a-Service (SaaS) is far more prevalent. This “SaaSification” of the enterprise has enormous implications for IT organizations and line of business managers.
The rise of SaaS has transformed the enterprise software business. Nearly all independent software vendors provide or will provide cloud-hosted versions of their offering. Business-focused SaaS offerings span all enterprise software categories including human resources, financials, enterprise resource planning, customer relationship management, and support. Additionally, there are SaaS businesses offering industry vertical-specific software such as healthcare, banking, legal, telecommunications, and manufacturing. Even enterprise software giants like SAP, Oracle, and Microsoft are moving toward SaaS delivery. While SaaS is particularly attractive to small and medium businesses that lack or have small IT resources, larger enterprises are also favoring the approach over hosting and managing software applications on premises.
During the last several years, modern cloud-based software companies have delivered functionality and user experiences that are on par, or even better than, traditional on premises hosted software. While the psychological leap of moving from on premises to SaaS is significant, the switching costs of moving from one SaaS provider to the next is much easier. For this reason, SaaS is ultra-competitive with different providers competing on quality of user experience, customer support, and advanced functionality in addition to cost. SaaS offerings also tend to be extremely agile, with new functionality released with a continuous delivery model.
The most compelling reason to adopt SaaS is to get out of the business of managing and maintaining the application delivery infrastructure that supports enterprise applications. Procuring and managing infrastructure such as servers, storage, and networking is complex and expensive for enterprise IT organizations. Application performance, security, availability, scalability, and overall return on investment depend on making the right infrastructure strategies. Even for leading IT-driven businesses, managing infrastructure is not a core competence.
For SaaS businesses, application delivery is part of their fundamental business model. Infrastructure strategy is as much a core competence as software development is for SaaS companies. SaaS infrastructures must deliver the performance, security, availability, and cost structure to support a SaaS business model and enable providers to deliver the competitive offering required to grow. It is typically far more cost-efficient to design application delivery infrastructure at scale, than to build one-off infrastructure for a single on premises hosted application. Whether a SaaS provider chooses to build its products on a public IaaS offering or their own private cloud depends on their own scale, application requirements, and competencies.
Moving forward, the SaaSification of the enterprise will continue as the as-a-service delivery model becomes standard for software providers. As a result, businesses demand for more efficient use of IT resources. SW
Josh Epstein is the VP of Global Marketing at Kaminario, a leader in all-flash storage, and is responsible for developing global marketing programs and telling Kaminario’s story. With 20 years of experience in technology marketing and strategy, Epstein has held a range of marketing and business development roles at high growth startups and global technology companies including EMC, CA Technologies and Oracle. He also serves as an active advisor to several early-stage Boston-MA area technology companies, and holds a B.S. in operations research from Cornell and an MBA from MIT Sloan.
Nov2016, Software Magazine