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SaaS Presentation at SCIT Conference

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Keynote speech at Symbiosys IT MBA school

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SaaS Presentation at SCIT Conference

  1. 1. SaaS : Software As A Service Suhas Kelkar VP Product Management Digité ( www.digite.com ) Keynote Speech For SCIT ( www.scit.edu ) Software Development Challenges & Issues Seminar January 19, 2008
  2. 2. Agenda What is SaaS? Why SaaS? History and current state of SaaS SaaS Architecture
  3. 3. SaaS Elevator Pitch <ul><li>&quot;Software deployed as a hosted service and accessed over the Internet&quot; </li></ul>
  4. 4. Business Services versus Consumer Oriented Services
  5. 5. What is SaaS? <ul><li>SaaS is a software delivery method that provides access to software and its functions remotely as a Web-based service. </li></ul><ul><li>SaaS allows organizations to access business functionality at a cost typically less than paying for licensed applications since SaaS pricing is based on a monthly fee . </li></ul><ul><li>Users don’t need to invest as much in hardware, server support, security audits and need fewer in house IT staff </li></ul>
  6. 6. SaaS Advantages <ul><li>Lower Costs. The user need not pay a single (usually large) licensing fee. He only needs to pay recurring subscription fees. </li></ul><ul><li>Smaller Storage and Hardware Requirements. The user need not store software or data stored on his computer </li></ul><ul><li>Fewer Personnel. SaaS reduces the need for specially trained IT personnel to handle maintenance, monitoring and software updates. </li></ul>Key Advantages for the End User <ul><li>Continuous and recurring stream of income </li></ul><ul><li>Reduced losses from piracy and unlicensed use of software </li></ul><ul><li>Greater valuation for the company! </li></ul>Key Advantages for the Vendor
  7. 7. Key characteristics of SaaS? <ul><li>Network based access and management of commercial software </li></ul><ul><li>Central management of commercial software rather than at each customer’s site </li></ul><ul><li>One to many application delivery model based on single instance, multi tenant architecture </li></ul><ul><li>Centralized updating of software </li></ul><ul><ul><li>No more install hassles, downloadable patches and painful upgrades </li></ul></ul><ul><ul><li>Upgrades are frequent and completely transparent. Gmail version keeps changing </li></ul></ul>
  8. 8. Why SaaS? <ul><li>In 2005, Gartner estimated SaaS sales were 5% of total business software sales. </li></ul><ul><li>In 2011, Gartner predicts that share will grow to 25% (As per Gartner, September 26, 2006) </li></ul><ul><li>From IDC Directions Video : SaaS Tipping point in ’07 </li></ul><ul><ul><li>IBM will create online marketplace on Web Sphere </li></ul></ul><ul><ul><li>SAP, Microsoft will accelerate SaaS strategies </li></ul></ul><ul><ul><li>Salesforce.com will be acquired </li></ul></ul><ul><ul><li>2/3 rd of line of business managers favored SaaS delivery model </li></ul></ul>
  9. 9. Why SaaS? Target the “long tail” <ul><li>Targeting the &quot;long tail&quot; of smaller businesses, by reducing the minimum cost at which software can be sold . </li></ul>On-Premise Software Market SaaS Opens up New Market
  10. 10. Why SaaS? SaaS Showcase Example <ul><li>daptiv formerly eProject </li></ul><ul><ul><li>$45 per user per month, claims to have 100,000 users. Adding 2000 users per month </li></ul></ul><ul><ul><li>Grew 128% to $16M revenue in FY06 </li></ul></ul><ul><ul><li>Positioning themselves as “SalesForce for the PPM market”, via eLounge (online customer collaboration environment) </li></ul></ul><ul><ul><li>Gaining market share and winning many deals </li></ul></ul>
  11. 11. Agenda What is SaaS? History and current state of SaaS SaaS Architecture
  12. 12. History of SaaS <ul><li>SaaS as a concept is not fundamentally new! What is new is the timing and success of SaaS! </li></ul>
  13. 13. ASP Versus SaaS <ul><li>It is important to understand the difference between ASP and SaaS. It is very common to confuse SaaS with ASP. </li></ul><ul><li>ASP applications were traditional client-server applications with HTML façade </li></ul><ul><li>ASP suffered with poor performance </li></ul><ul><li>Shift in center of gravity : SaaS is about what customer wants, ASP was what the client would offer </li></ul><ul><li>ASP concept did not scale! </li></ul>
  14. 14. SaaS and beyond <ul><li>SaaS is just the beginning </li></ul><ul><li>Platform As A Service (FORCE.com) </li></ul><ul><li>Hardware As A Service (HaaS) </li></ul><ul><li>Infrastructure As A Service (IaaS) </li></ul><ul><li>“ Blue Cloud” by IBM </li></ul><ul><li>Simple Storage Service (Amazon S3) enables storage in the cloud, </li></ul><ul><li>Elastic Computing Cloud (Amazon EC2) enables &quot;compute&quot; in the cloud. </li></ul><ul><li>Google computing services </li></ul>
  15. 15. Agenda What is SaaS? History and current state of SaaS SaaS Architecture
  16. 16. Paradigm Shift <ul><li>Moving from on-premise software to SaaS requires paradigm shift in following three areas </li></ul>
  17. 17. Application Architecture : SaaS Maturity Model <ul><li>Level 1: Ad Hoc / Custom </li></ul><ul><li>Level 2: Configurable </li></ul><ul><li>Level 3: Configurable and Multi-tenant efficient </li></ul><ul><li>Level 4: Scalable, Configurable, Multi-Tenant-Efficient </li></ul>
  18. 18. Application Architecture : SaaS Maturity Model <ul><li>Similar to ASP model </li></ul><ul><li>Each customer has i ts own customized version of the hosted application, and runs its own instance of the application on the host's servers </li></ul><ul><li>This level offers very few of the benefits of a fully mature SaaS solution </li></ul>LEVEL 1 : AD HOC / CUSTOM
  19. 19. Application Architecture : SaaS Maturity Model <ul><li>Vendor hosts a separate instance of the application for each tenant </li></ul><ul><li>Same code, no need to maintain customized application code bases </li></ul><ul><li>Easier to support/maintain since only single instance needs to be updated </li></ul><ul><li>More expensive than Level 1 in terms of effort required </li></ul>LEVEL 2 : CONFIGURABLE
  20. 20. Application Architecture : SaaS Maturity Model <ul><li>Single instance that serves every customer, with configurable metadata </li></ul><ul><li>Authorization and security policies ensure that each customer's data is kept separate from that of other customers </li></ul><ul><li>Eliminates the need to provide server space for as many instances as the vendor has customers </li></ul>LEVEL 3 : CONFIGURABLE & MULTI TENANT EFFICIENT
  21. 21. Application Architecture : SaaS Maturity Model <ul><li>Vendor hosts multiple customers on a load-balanced farm of identical instances </li></ul><ul><li>Scalable because servers can be added to meet demand without re-architecture </li></ul><ul><li>Changes or fixes can be rolled out to thousands of tenants </li></ul>LEVEL 4 : SCALABLE, CONFIGURABLE & MULTI TENANT EFFICIENT
  22. 22. Business Model <ul><li>Shifting the &quot;ownership&quot; of the software from the customer to an provider. </li></ul><ul><li>Reallocating responsibility for the technology infrastructure and management—that is, hardware and professional services—from the customer to the provider. </li></ul>Typical Budget For On-premise Software Budget Distribution For SaaS Software
  23. 23. Business Model <ul><li>Reducing the cost of providing software services, through specialization and economy of scale. </li></ul>SaaS Hardware costs get shared by all tenants resulting in economies of scale
  24. 24. Operational Structure <ul><li>SaaS providers not only have to be experts in building software and bringing it to market, they must also become experts in operating and managing it. </li></ul><ul><li>Monitoring SaaS applications </li></ul><ul><ul><li>For availability </li></ul></ul><ul><ul><li>For performance </li></ul></ul>
  25. 25. Trust the Platform!
  26. 26. Does this look all complicated to you?  <ul><li>Help is literally just around the corner! :) </li></ul>
  27. 27. Summary <ul><li>SaaS is going to have a major impact on the software industry, because SaaS will change the way people build, sell, buy & use software </li></ul><ul><li>As students of SCIT, you are the future of tomorrow’s IT industry. Hence you need to track SaaS very closely as it will have material impact on your future! </li></ul>
  28. 28. Thanks! [email_address]
  29. 29. Glossary and References <ul><li>http://msdn2.microsoft.com/en-us/library/aa479069.aspx </li></ul><ul><li>http://blogs.msdn.com/gianpaolo/ </li></ul><ul><li>http://www.microsoft.com/serviceproviders/saas/default.mspx </li></ul><ul><li>http:// en.wikipedia.org/wiki/SaaS </li></ul>