Why is SaaS so sexy?

By Sean Allen Vice President of Sales, NA Insurance
Software as a Service (SaaS) is firmly establishing itself as the delivery model of choice for a wide range of business applications. And that’s not just my opinion…
A recent KPMG study1 reported that nearly half of surveyed executives said that their most likely investments are expected to be in cloud-delivered SaaS while a 2013 report from Siemer & Associates found that the global SaaS market grew 16.8 percent in 2012 from a value of $14.3 billion market to one of $16.7 billion, with a forecast value of $21.3 billion by 20152.  
I can see at least five good reasons why SaaS is attracting this level of interest:
  • COST: SaaS can significantly cut the cost of deploying new applications. In the past, companies would need to buy, build, and maintain their IT infrastructures to support application deployment. With SaaS, the only infrastructure you need is a connection to the internet. SaaS applications are purchased through a subscription – so there is also a significant saving on the licensing costs that used to be the norm with software purchases. Finally, because SaaS providers are responsible for managing the infrastructure, end users avoid a major IT overhead for the hardware, software and people needed to manage their applications.
  • SPEED: SaaS solutions can be provisioned quickly and easily. A browser and an internet connection is all that's usually required to access a SaaS application, which can then be made available on a wide range of desktop and mobile devices. Users also become productive more quickly with a much flatter learning curve for internet-based applications. If you can use Google, you can use a cloud-based application!
  • FLEXIBILITY: SaaS simplifies the processes of scaling and upgrading IT. The multitenancy model allows organizations to scale rapidly without incurring additional infrastructure or staffing costs. Upgrading becomes just another task the SaaS provider manages automatically, freeing the end user from the task of downloading and installing patches.
  • RESILIENCE: The SaaS model also lends itself to swift and efficient disaster recovery. With the IT infrastructure and data hosted offsite in a service provider’s data center rather than your own, a significant workload is removed from your IT team and data recovery can become just another part of the on-demand service.
  • INTEGRATION: Implementing a SaaS solution can happen without disrupting day-to-day business and without necessitating a rip-and-replace exercise for your legacy IT.  It integrates with your existing investments, rather than displacing them.

With these advantages to recommend it, SaaS provides something of a template for how technology can deliver innovation in business.

As such, we find that SaaS is inevitably becoming part of our own activities – part and parcel of our innovative, technology-led Business Processing as a Service (BPaaS) solution.
For example, take a look at our recent acquisition of Market Maker 4, a SaaS-based e-sourcing technology which significantly expands the procurement service we can offer our customers into 2014 and beyond.
On the BPaaS front, see the newsletter we’ve prepared featuring research from Gartner outlining emerging trends in BPaaS, how we’re delivering these holistic services to our customers, and some real life applications of the solution. 
Most importantly, please let us know what <you> think.
Are these innovative technologies genuinely attractive? Or have they been overhyped?
We’d love to hear your views!
1 Embracing the Cloud, KPMG, November 2011
2 2013 SaaS Industry Report, Siemer & Associates


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