IT Outsourcing - What makes SaaS different?

When talking about the cloud and what it means for industry today, the terminology Software as a Service (SaaS) is often used. In fact, many have often considered SaaS to be synonymous with cloud-based services because it describes the use of applications run as a service, rather than as locally installed tools.

But what really makes SaaS IT different? You might remember the old term ASP – for Application Service Provider – something that came into use after the service bureau model of IT services was sold to companies in the sixties and seventies. ASP really described the concept that a service could be sold through a terminal that has no locally installed software.

That entire bureau ‘nonsense’ went out of fashion as the PC boom took off in the 1980s. Soon everyone wanted their own PC on their desk with their software installed on it. Microsoft enjoyed huge success because this model of computing meant millions of individual DOS or Windows licenses could be sold, and once they started dominating the office tools market with Word and Excel, then the same applied all over again.

Anyone who has tried emailing a Word document to a colleague or client and found that they could not read it due to them running a different version of the software knows where this story ends up. Even within a single company, the CIO has to manage an estate of tens of thousands of PCs, all with an operating system that needs to be managed, patched, and upgraded, and all with office automation tools like Microsoft Office. And all those tools need to be kept up to date with patches and bug fixes, in a way that doesn’t cause a problem to the end user. Most people just want to get on with their work without having to maintain the PC on their desk.

And so, many companies have started exploring a return to the old idea of the bureau – or Software as a Service as we are supposed to call it. There are two main reasons that this has become possible recently; the web browsers are a lot better than a few years back so applications can exist within a browser and not feel clunky. And the ubiquity of good broadband access means it is a lot easier to rely on applications that need to be constantly online – who can remember the old days of going online to collect email then quickly disconnecting one they had downloaded?

Web-based email is a good example of a cloud-based software application that has become extensively used by people all over the world. It’s not penetrated as far into the corporate world yet, but there are real CIOs out there questioning the need to pay for expensive licenses from Microsoft or IBM – Exchange and Lotus Notes being the two office automation tools that dominate the market.

Early in 2009, Guardian News & Media, a well-known newspaper and media group in the UK, switched two and half thousand staff over to Google Apps. That meant they were using Google’s Gmail for their email service and the Google Apps suite of tools for their word processing and other office automation tasks. Given the minimal capital investment in systems and software – you just pay as you go by user – CIO Andy Beale claimed it was one of his easiest ever purchasing decisions.

The French auto component supplier is an even bigger example of a firm moving to a SaaS environment for all their office software. With 122 plants, 61 R&D centres, and 49,000 people across 27 countries, they need a robust way to connect their teams. Yet Valeo’s management claim that by using Google Apps they not only reduce the cost of their office infrastructure, they have a more productive and collaborative environment.

https://www.guardian.co.uk

https://www.valeo.com

There are still questions over data security, the practicality of having an ‘always online’ system (how do you work on a train or plane?), and the fact that cloud-based SaaS systems have to be more standardised, but this is clearly an idea that has returned to the mainstream.