On Demand Blogging by Stephen Pech

The Software as a Service (SaaS) business strategy promises to take organisation infrastructure and processes to the next level of modularity, management and financial flexibility – but how well does it deliver on its promise today?  An enterprise that utilises only SaaS offerings for its IT&T systems is called an All SaaS Enterprise (ASE).  Can a company run purely on this model? 

At my company, NexGen, SaaS’s biggest Asia Pacific cheerleader, we have always endeavoured to ‘eat our own dog food’, and run an ASE. We succeed - almost.

As a start-up our requirements were clear.  We needed solutions that were quick to rollout, easily managed; offered flexible access, low upfront costs, and the ability to scale with our growth.  Software as a Service solutions offered each of these.  We deliberately went out to be as realistic as posible, building up our platform as if we were a normal non SaaS aligned start-up and based only on our internal requirements.  We did this to better understand the end customer and the industry.

The first step was finding suitable applications.  Part of our vision at NexGen is to evangelise Software as a Service in and for the Asia Pacific region so we are in a good position to know the offerings available but for someone outside of the industry it is still too much of an effort to find and test all the applications we required.  The SaaS community, including NexGen in the Asia Pacific region and the new channels that are emerging hope to improve this soon.  We utilised sources like Tanooma, SaaS Showplace, IBM’s SaaSpace and Neobinaries

We built our infrastructure carefully starting with the essentials, Office Productivity (MS Office), Networking (Linked In ), EmailSales Management (SalesForce), Document Management (Local storage), Telephony (desk Mobiles/Cells), Faxing (a fax machine), and basic website hosting (local web host).
Then in came the manual replacements - advanced Telephony (Alianza), advanced Banking (upgraded banking service), Fax Management (efax ); and more functionality advanced Document Management (Xythos On Demand), advanced web hosting, advanced Email and Calendaring (Hosted Exchange), Blog + Wiki (Hosted SharePoint) and Web Meetings (GoToMeeting ).
Finally we implemented Systems Management (TriActive ), Email Marketing (iContact), collaborative office productivity (Google Apps & Buzzword – see my article SaaS in the Office ), and mind mapping (bubbl.us).
Still to come are Business Intelligence (Enovation – see SaaS Business Intelligence), Billing (Aria ), advanced Business Networking (Xeequa ), and a Knowledge Base (Hosted SharePoint).  To give a simple user experience all applications are brought together in our Intranet (Hosted SharePoint). (local web host),

Is Internet access a problem? No, there is MORE access than the in-office alternative. I have access to our SaaS platform in our offices, as well as hotels, airports, and cafes, and I don’t require a VPN nor suffer from the slower access you normally experience with one.  It will get even easier with the rollout of services like WiMAX in Asia and the Pacific .

 What about support?  Believe it or not but we have LESS user incidents on our All SaaS platform than on an equivalent internal platform, due mainly to the focus on usable user interfaces and on applications doing one thing and doing it well.  Of the incidents we have had, most of the problems have been able to be solved very simply by either internal technical team members or even by the user themselves, mainly because of a high availability and relevance of self support options such as FAQ’s, training video’s, online manuals and built in hints and tips.  The main area of inconvenience has been in the few incidents that have required support by the vendor.  Though we have found SaaS support to be generally of a high standard, multiple vendors mean multiple support teams rather than one internal IT team, absence of advice in the context of our company, and a slower pace to action.   This suggests that there is space in the SaaS Ecosystem for outsourcers, MSP’s and aggregators to pull together multiple offerings and provide company contextual support and advice.

Is there a SaaS solution for everything?  We found suitable solutions for everything except Accounting and offline office productivity .  Being based in Singapore brings many advantages but it also brings specific accounting rules and a small market that has not yet been reached by a product focussed at small businesses – hopefully soon.
Also desktop based Office Productivity and email/calendaring are required when offline, however the offline web via Firefox 3, Adobe AIR, and Google gears will soon fill this gap (refer to my article “SaaS in the Office – Web based Office Productivity ”)

What is the overall experience? We have been running most of our All SaaS platform for the better part of a year and our experience has been almost unanimously good.  Of most importance to our business is that we have more functions available more often, and kept to a higher standard of availability than if we had in-sourced our infrastructure.  Our COO is effectively our entire IT department, but we still have hundreds of on-call systems experts to help us.  And most importantly of all, process implementation and change is more business driven, not technology driven.  See a full list of benefits in the accompanying All SaaS Enterprise (ASE) - the Applications and Analysis article.

 What would I do differently next time?  We are very happy with our infrastructure but if ‘next time’ the Web based Office Productivity area is solved, and there are Software as a Service Aggregators who can provide support in the context of our company, then we would take advantage of these.

See a full list of the SaaS offerings, benefits, hassles, worries see the accompanying All SaaS Enterprise (ASE) - the Applications and Analysis.

* I also post versions of relevant AsiaPacific articles from this this blog on the SaaS Asia Pacific Community site.

At my company NexGen , we routinely evaluate and analyse SaaS solutions and we have been ruining an All SaaS Enterprise (ASE) for the better part of the last year (see the All SaaS Enterprise Business Case sibling article ).  How well do the solutions fare?  What are the benefits? What are the hassles?  What is the jury still out on?

SaaS offerings 

We chose applications based on our requirements, not SaaS ideology.  The decisions we made are by category of application are :

Accounting – QuickBooks

Try as we might we have not yet found a suitable SaaS accounting solution that suits our company – a Singapore based start-up with a QuickBooks experienced accounting team - Quickbooks have a SaaS application but it is only availabale for the US.  There are many good solutions out there, including some Asia Pacific SaaS solutions (SaaSu , Xero , and myworkspace), just none right for our situation.

Banking – CitiBank

Our executive team uses our banks SaaS account management application which utilises a dongle to create, approve and enquire on transactions amongst other things.  One of the best examples of SaaS, it is easy to use and enormously valuable in that it enables even the most mobile executive to keep financial control all over the world at any time of the day.

Billing – Aria
Aria provides full customer billing lifecycle management.

Blog – WordPress , and managed Sharepoint
Both offerings provide a good quality blog as part of wider function sets.

Business Performance management / Business Intelligence – Enovation
Enovation provides an excellent easy to use and quick to value SaaS BPM offering.

Document Management – Xythos On Demand, Local storage, and Local Backup
Xythos provides a full document management solution, including online storage and access control, version control etc.  We utilise the solution only to half of its full extent but it still one of the most valuable for our very mobile organisation.  It ha a web absed file amanger interface but also require a local client for synchronisation of files onto a PC.

Email and Calendaring - Hosted Microsoft Exchange
We looked at Zimbra, Google apps and other solutions but a Hosted Exchange solution won for three reasons – it had the breadth of functionality we required, our users were comfortable and experienced in using it, and we could not find suitable Zimbra hosters in region.  This is an area we will continue to review as there are many exciting things happening here.

Email Marketing – iContact
Email marketing is an important function for us to keep in touch with our networks.  iContact does the job cleanly and well with an easy to use interface. We also looked at ConstantContact which was also a good quality product.

Fax Management - efax & physical fax machines
Despite the prevalence of email, faxes are still an important communication method.  With a mobile workforce a single location specific solution was not tenable for quick communication.  E-Fax allows us to receive and send faxes as if we were in the office when we are anywhere in the world.  We still have physical fax  machines but these are rarely used.

Intranet – Hosted Microsoft SharePoint
Sharepoint is not without its issues but it is still a good intranet solution.  The hosted model and it’s availability in combination with hosted exchange made this the best intranet choice for our business.

Mind Mapping - bubbl.us
Mind Mapping is an excellent tool – I encourage everyone to add it to their office communications practices.  It is not as fully featured as some of its on computer rivals but it is good enough and makes sharing and collaborating on mind maps extremely easy.

Networking - Xeequa & Linked-in
Networking is an essential function for a SaaS hub like NexGen.  Linked-In is a staple personal networking and relationship management solution.  Xeequa is for both individuals and their companies.  It adds company to company relationships and some advanced ways to interact.

Office Productivity – MS Office (locally installed), Google Apps , Wiki, Buzzword
Unfortunately I can’t say we are all SaaS here.  We use a mixture of solutions to match the requirement of the situation.  For one internal project we use only Google Apps, we communicate collaborative group information via a wiki, and we use Buzzword where it makes sense, but the main product of use is MS office.  This is mainly because this way of working is accepted by our staff and always accessible.  There are however many areas in Office productivity that SaaS can improve on – see my SaaS Office Productivity article for my thoughts here.

Sales Management – SalesForce
Being a SaaS hub keeping track of our relationships and opportunities is core to our business so this was one of the most important pieces of our infrastructure solution.  We also looked at entellium and hosted Suger CRM.

Systems Management – TriActive
A mobile workforce means, until our SaaS infrastructure is completely clientless, mobile computers and the requirement to manage them.  With some Systems Management experience of my own I really appreciate the value a SaaS model brings to this area.  Systems Management was formally a heavy lifting area with full time staff needed to install and maintain a local system.  With TriActive you get all the functionality you need with none of this hassle.

Unified Communications / Telephony – Alianza
Our team is very mobile in both the Asia Pacific region and in the U.S. which can mean expensive phone bills.  It also means that they could be hard to get hold of.  When I first heard of VoIP as a SaaS product it took me a while to appreciate that business telephony does not have to be a special case and can be viewed as another business system like the rest of our platform.  Amongst many other benefits, our SaaS based VoIP and IP-PBX solution from Alianza means that we have the same number wherever we are via either deskphone or softphone, and that our team can all change their call forwarding via an easy web interface

Web Meetings – GoToMeeting
Web meetings save us an enormous amount of time and money and can also be our partners preference in many situations.  This is an essential piece of infrastructure and GoToMeeting is the one we rate to be the most intuitive solution by a good margin.

Website – Externally Hosted
This is a no brainer but it is important to note that it is still SaaS in a broad sense, and one of the earliest forms.  You could host your website internally if you wanted to but unless there are some big reasons to do that why would you?

Wiki – Xythos , Hosted Microsoft SharePoint
Both offerings provide a good quality blog as part of wider function sets.

Benefits, Hassles and still to be decided

From our experience we have been able to compile a list of benefits of our All SaaS platform, they are :

• Interface is business focussed, not geek focussed - easy setup
• Up and running straight away
• Supports and enables an independent workforce
• Lower costs
• Less hassle
• Less downtime
• More uptime – best quality backups for quicker recovery (we have not lost one byte of data yet)
• More access (when in the office, travelling with laptop and using a foreign device)
• Running better apps than we could by ourselves (some examples are systems management, business intelligence, location independent VoIP, billing)
• Enormous upfront cost reduction
• Change is a business decision, not a technology decision
• No sleepless nights worrying about backup and stability
• New features with no upgrade pain
• Consistent cost - our systems are listed under business infrastructure on our P&L
• We know the cost of doing business every month right in front of me
• Single access point for all applications in security enabled internet accessible intranet
• Also gives independent end users control - SaaS apps are generally accessible and usable
• No application conflict worries

We also have been able to put together a list of hassles

• Dealing with many different vendors rather than one it team
• Support
  • Though mostly good, is unable to advise in the context of our company
  • For one product in particular remote support has been an issue, as opposed to having internal it dept.  For other apps it has been fine to have email alone.
  • Support is slower Finding suitable SaaS solutions for our business

And what else should be considered for your organisation :

• Internal technical resources bring product knowledge with them
• Options to suit all organisation types (i.e. we couldn’t get an adequate accounting package for a Singapore small business)
• SaaS doesn’t solve everything – solution introduction still requires co-ordination, but for user experience, not installation
• The effect of other support & training Mechanisms - On line scalable customer care - FAQ’s, Discussion boards, online support desk, pre recorded video’s, built-in helpdesks.
• How does the offering facilitate switching providers?
• Am I choosing the best product?

Are any services are deviceclient dependent?

Two applications (Offline Office Productivity, and Accounting) require local installs. Six applications require a local client installed on the users device for full functionality.  Only one is very specific device dependant (Unified Communications).

 The options available to run an All SaaS Enterprise are both varied and rich but there are some small holes in our ability to find the right business software solutions for every requirement.  There is a long list of benefits that far outweigh the hassles.  Though there are still some questions to be answered the SaaS industry is hard at work on them.  Best of all we have found both an excellent solution for our business, and all the better that it is SaaS.

Also have a look at another companies All SaaS Enterprise enterprise experience.

* I also post versions of relevant AsiaPacific articles from this this blog on the SaaS Asia Pacific Community site.

Human history and development shows that human advancement has been fundamentally linked to specialization.  It is the concept that a service can be performed more effectively and efficiently by an organization or process setup to perform that specific task.
SaaS is the current wave in the perpetual tide of progress of specialization.  The buzz behind SaaS, effectively business process and systems maintenace & management outsourcing, is the result of a “perfect storm” of many forces, one of the most notable being the drive for efficiencies from specialisation. 

What is it about?  Why?

Read this article for an Introduction to SaaS

It’s not about lower TCO, but SaaS is likely to provide that

It’s not about low to no Capex, but SaaS almost definitely means that.

It’s not about 24/7 access from anywhere, though you’ll probably get it.

It’s not even about better data security & backup, better reliability, and more uptime, though they are benefits you’re likely to enjoy.

SaaS is about the perfect storm of better technology, maturing customer demands, maturing of business process best practices, and the relentless drive for efficiency via specialization producing a solution that improves on the superseded traditional model  in not all, but in many ways,  and in many scenarios.  Treb Ryan has a interesting take on the movements these factors have taken in his blog entry Cloud Hogwash.  You can loosely combine the first two points under “cloud applications”, and the fourth under “cloud computing”.  The factors are:

1. Technology can do it – web, UI, and internet technology has developed to a point where it is now viable to deliver a solution from a remote location anywhere businesses need it.
2. Businesses demand it  - they now see the benefit of, and want to outsource where it is not their core competence.  This has been encouraged by success in other out sourcing areas.
3. Commoditisation allows it – The explosion in all forms of communication, books, TV, newspapers and of course the internet, have allowed people to share information like never before.  Some of this information covers business processes and best practices and it is this sharing of information that has led to the commoditisation of business processes beyond even what has been available in the Client Server era.
4. Efficiency requires it - I expand on this below

Specialisation and Outsourcing

Mining sites, military bases and hospitals can have their own electricity and/or  water supplies, and they should because they have large, specific  requirements, but I personally use the common electricity grid and water supply very successfully.  Over time products and services become commoditised, you don’t make your shoes nor bake your own bread, but you still have shoes and bread, and they required fewer resources and lower opportunity cost, because they were manufactured by a process tuned for that specific purpose.   

SaaS & Specialisation

Just as transport has moved from horses, to trains, to cars, to planes - so business process solutions have moved from mainframes, to internal hosting, to out sourcing (including ASP/MSP), to SaaS.

The IT platform of the last 20 years has been very effective at helping us realize the potential of technology because of its versatility and flexibility.   This Jack of all trades platform is and always will be needed, but some, and increasingly more of the processes we trusted to that platform are not suited to it anymore.  Organisations directed at a specific process can perform with fewer resources and a lower opportunity cost

Just as in the mainframe days, the requirements of the customer are too much for their internal IT departments to handle.  With mainframes the attraction was processing power, now it is amongst other things, mobility, reliability and manageability that make SaaS so attractive.

Where to next?

SaaS is taking the processes that it enables closer and closer towards a commodity utility.  This is making the value proposition of SaaS too compelling for businesses to ignore.  As Geoffrey Moore states in his book ‘Living on the Fault Line’, it’s only in areas that are mission critical and/or where a clear competitive advantage is derived that organisations should be looking at in sourcing functions and processes.  SaaS adds enormously to the reliable ecosystem of offerings needed for that vision.

References

• Nicholas Carr, ‘The Big Switch’
• Geoffrey Moore, ‘Living on the Fault Line’
• http://www.itbusinessedge.com/blogs/sts/?p=285
• http://www.vnunet.com/itweek/news/2206496/carr-picks-saas-global
• http://www.opsource.net/blog/2008/02/04/cloud-hogwash

* I also post versions of relevant AsiaPacific articles from this this blog on the SaaS Asia Pacific Community site.