We recently witnessed a slew of public announcements from legacy enterprise software vendors who are repackaging their on-premise solutions as SaaS offerings. This is, in my opinion, a misleading marketing tactic. Fortunately, today’s customers are smarter, and can quickly sift through the marketing fluff and understand the real deal.
Let’s discuss exactly how these vendors are bluffing:
Hosted is not SaaS
What we see are enterprise software vendors take an on-premise application, load it onto a server and put a big SaaS sticker on it. Although it has happened countless times, it still amazes me. Just because they are hosting their legacy software, does not mean it has become a SaaS offering. Since they don’t provide all the benefits of the SaaS model to their customers, they should not be calling it SaaS:
SaaS is about leveraging the cloud to provide new value through integrations with customers, vendors, and employees. Its about new business value through simplified integration. This value is simply not available when a legacy, hosted application cannot be easily extended.
SaaS is about eliminating the upgrade cycle. Customers spend a fortune updating, upgrading, and customizing their on-premise software. This, in turn, leads to high TCO. That’s one of the main drivers for SaaS. But, these problems do not go away when the same application is running in a hosted model. Someone (i.e. the customer) still has to cover that upgrade cost, or be left using an old, unsupported release.
SaaS is about ongoing product improvement. Typical SaaS vendors deliver new functionality on a quarterly release cycle (we work on even shorter ones) to bring new value to their customers. Legacy, hosted applications still run at a 2 year (or longer) release cycle, so customers are locked out without new capabilities during that time.
SaaS is about aligning software costs with business needs. Its about giving customers a better way to align the software costs with the evolving business needs, eliminating shelfware, and making it easier to use the application. The fact that a hosted vendor offers a subscription-based model does not make it a SaaS offering.
Its the Same Old Technology Pig
Most of the legacy, on-premise software solutions in the IT Asset Management and IT Service Management markets are about 10-15 years old. This means their architecture and technology foundation were established a decade or more ago. Many vendors grow through acquisitions, which only makes matters worse because they must try to combine different technologies and product infrastructures together into one “integrated” solution. In reality, this also means that these products were designed and built long before the Web as we know it today even existed. Take that kind of an application, and deliver it over the Web and you still get a pig – no matter how you dress it.
It Looks Like a Pig
One of the things that we are most proud of when it comes to our service is its innovative, leading-edge usability. We built our service from the ground up as a modern Web application, and use the latest technologies like AJAX, jQuery, Ruby on Rails, and many others to make it easier for our customers to use and benefit from. Most of the legacy enterprise software solutions on the market contain interfaces that were created a decade ago. And today, it is still old, boring, legacy software and people don’t enjoy using it. Users have grown accustomed to simple and convenient Web experiences like Facebook and Gmail, and are now demanding the same from their enterprise software solutions. Point is, when moving to a modern application, make sure it does not look like a pig.
Eliminate the Marketing Fluff
When considering a SaaS vs. an on-premise solution, you need to carefully evaluate whether you are going to gain the same benefits delivered by the SaaS business model through use of a hosted, legacy solution. Look for a pure-play SaaS offering, such as SAManage, to truly take advantage of the cloud computing revolution, and to better integrate your systems as more and more of them become cloud-based. Can the service integrate via standards-based Web services? Can you easily extend it with Google Apps, Salesforce.com, or any other cloud services you currently use or will consider in the future? Are you going to benefit from new capabilities without having to spend any money on upgrading, patching, and maintaining customizations? Only a pure SaaS offering can provide these benefits, and its important to ask these questions when considering your options.