Archive for the ‘SMB’ Category

The Three Key SaaS Management Challenges

October 15, 2009

We find very few people today that would dispute the notion that SaaS and cloud applications have become mainstream technologies in SMB and the midmarket.  The challenges for the SaaS industry are also changing as a result.   With the battle over the viability of the on-demand model largely won,  the questions are now turning to the operational and IT management  implications of a SaaS-centric environment.

Our customers and prospects here at Conformity are forward-thinking organizations that are aggressively leveraging the cloud delivery model for multiple, if not a majority of their business applications.  Given our strong  belief in the SaaS and cloud model, we believe that they are a good indicator of trends we’ll shortly be seeing more broadly in the market.    All of these organizations are struggling with what their management processes and approaches look like in a purely ‘on-demand’ model.   Among these multi-SaaS organizations we’re consistently seeing three general problem domains:

  1. User provisioning and administration – as they’re optimized for different problem sets, all major SaaS applications have fundamentally different ways of thinking about users, roles, profiles and permissions.  Organizations have tended to have separate business administrators for say, NetSuite and SuccessFactors.  Each of these admins as a result has had to develop a separate model of their organization, deparments and role structures, with the result being that various siloed identity stores have been created across the organization.  These stores are are all independent from each other and from on-premise directory services (Microsoft AD) and identity management solutions.  Normalizing these identity stores in support of centralized, streamlined administration and reporting is a common theme we’re hearing, and what what our solution here at Conformity is addressing.
  2. Single sign-on (SSO) / authentication – another common challenge we’re hearing is the desire to provide end-users the ability to access multiple SaaS applications (and often on-prem apps as well) using a single set of credentials, both for end-user convenience and security purposes.  This is the problem set being  addressed by vendors such as Ping Identity, Tricipher and Symplified.
  3. Data integration – the final theme we’re hearing is around cross-application data integration, and the desire to integrate multiple ‘best of breed’ applications across a common business processes or workflow.  This issue set consists of integration of cloud apps to both cloud and on-premise applications.   This is the domain being addressed by vendors such as Cast Iron Systems, Pervasive and Boomi.

While the data integation challenge is fairly distinct from the first two challenges, significant market confusion exists around provisioning and SSO, and whether a solution in one addresses both areas.  The short answer is no – the very simple analogy we use is that SSO tells you if you should let the visitor knocking on the front door into the house – provisioning and permissions management provides guardrails around what they can and cannot do once they’re in the front door.  Both are needed, but complementary capabilities – more to come on this….


New Midmarket | Enterprise SaaS adoption research

June 5, 2008

Saugatuck Research recently announced the preliminary results of their most recent worldwide survey on SaaS adoption and deployment. While most of the findings are consistent with other surveys of SaaS adoption (ie continued aggressive midmarket adoption, and a rapidly awakening enterprise market), there were a couple of interesting findings of note:

  • Among ‘large enterprises’ (5,000+ employees), only 4% are not planning on deploying SaaS, a radical departure from other market data we’ve seen from as recently as a year ago
  • Midsized companies surveyed (100 to 499 employees) had a 95% customer satisfaction rate with their SaaS deployments – we can’t recall seeing a number that high for anything, let alone anything associated with software

The customer sat number, in conjunction with several other observations, begins to shed some light on the dynamics driving aggressive midmarket SaaS adoption. Namely the SaaS deployment patterns of midmarket companies, vs SMBs and enterprises, tend to be characterized by:

  • Greater focus – the Saugatuck survey indicates that midsized organizations tend to be more focused and disciplined on where they deploy SaaS applications
  • Fewer expectations – midsized companies like SaaS for the core value proposition – lower costs, faster implementation and lower management overhead, and look less then their SMB and enterprise brethren for focus on ‘core business competencies’
  • Higher satisfaction – not surprisingly, greater focus + lower expectations = high mid-market satisfaction, leading to…
  • Increased adoption – adoption rates that are continuing to outpace SMB and enterprise segments

An article discussing the highlights of the survey can be found here – Saugatuck also mentions that more detailed survey results will be made available this summer….

A big week for SaaS

September 21, 2007

Quite a big week for SaaS, with both and SAP making major platform and product announcements…

At their annual user conference Dreamforce, introduced their new application development platform. The new ‘platform-as-a-service’ or PAAS offering (yes, another new SaaS-related acronym) extends the AppExchange environment, providing users a platform and toolset that enables them to leverage UI, logic, database and integration ‘as-a-service’ components. An early peek also was provided at VisualForce (currently only available as a developer preview), which will enable the development of custom UIs on the platform. On the application side, appears to be continuing its strong focus on the CRM market.

SAP also unveilved (finally) Business ByDesign, its highly anticipated on-demand mid-market ERP solution which was formerly know as A1S. With standard pricing at $149 per user per month, the jury is out around the cannibalization potential of BBD on SAP’s ‘legacy’ business, and the resulting impact that might have on SAP’s excitement around and commitment to the SaaS model.

The net net? The addition of another major player to the SaaS market and the introduction of a new platform and tools to enable the rapid development of new SaaS applications – more choices and options for organizations seeking to leverage the SaaS model, and more to eventually manage as well…

The evolving role of IT in SaaS management

August 28, 2007

One question was inevitably bound to arise with the proliferation of SaaS within organizations- whether lines of business or IT should have ‘ownership’ of SaaS applications.  Which raises another question – what actually does ‘ownership’ of SaaS applications mean?  Without the need to manage, maintain and support on-premise applications, SaaS ‘ownership’ is less about managing the software life cycle, and more about ensuring that SaaS procurement, management and usage is consistent with corporate policies.  An interesting article appeared recently in SearchSMB exploring the role that IT is playing in SaaS procurement and management.

While business units typically have had free reign over SaaS deployments, evidence is starting to suggest that the pendulum is starting to swing towards greater IT involvement. A recent survey by Saugatuck Technology cited in the article shows that while 36% of organizations procure SaaS apps with no IT involvement, 24% require SaaS products to conform to pre-established guidelines from IT, and 44% require review by joint business/IT oversight committees. And why is IT increasingly feeling the need to get involved?

  • Integration – while business units have been happy to procure SaaS at will, IT is starting to be pulled in when business units realize the need for their SaaS application to integrate with data and/or applications that reside on-premise or with another 3rd party vendor. Many IT teams are only now finding out (the hard way) how broadly SaaS has penetrated their organizations and business processes.
  • Security and compliance – organizations are rapidly realizing the need for their SaaS and web-based applications to adhere to corporate access control, security and compliance policy requirements. Many organizations are increasingly looking to IT to ensure that SaaS usage in their environment is consistent with the policies and controls they’ve developed for traditional on-premise applications.

You can read the complete article here.

Q208 Results

August 16, 2007 yesterday released impressive second quarter 2008 results. A significant focus was placed on the continued inroads the company is making with enterprise customers, revealing that it now has:

  • 68 customers with >1,000 subscribers
  • 5 customers with > 10,000 subscribers
  • 4 customers with > 20,000 subscribers
  • 2 customers with > 30,000 subscribers

Salesforce must also be continuing to add SMB customers at a furious pace, as the average number of paid subscribers per customer is essentially unchanged (~23) from earlier in the year. Reports suggest that the customer base (now approximately 35,000) is equally split between SMB, MSE and enterprise customers….

SaaS Research Study – CIO Insight

July 29, 2007

CIO Insight recently released the results of its July 2007 Research Study on SaaS, SOA and web services. We typically think about SaaS adoption both from a breadth perspective – the number of organizations that have adopted at least one SaaS app – and depth – how many SaaS apps has the typical adopter deployed. The organizations with ‘deep’ adoption are the ones where we see management and control issues starting to emerge. While the report concludes that companies are ‘cautious’ in acceptance of SaaS, and that use of SaaS is ‘wide, not deep…yet’, taking a closer look at the numbers was instructive.

70% of survey respondents were IT executives from companies with 2006 revenues between $5 million and $1 billion; of those; of those approximately half were from companies between $5 and $100 million, so the survey had a clear bias towards SMBs/MSEs. The average respondent has 6 SaaS apps currently deployed – certainly nothing to sneeze at in this context. While the survey doesn’t have it, to get a better sense of adoption ‘depth’ it would be interesting to know what percentage of the total application portfolio for these respondents have ‘gone SaaS’. Our guess is that it would higher than most people expect. While SaaS pentration clearly hasn’t reached its potential, we get the sense from this (and other surveys and anecdotal evidence) that penetration within SaaS adopters is accelerating quicker than most would believe particularly in MSEs.

The other interesting note is that the survey was of IT executives who acknowledge that SaaS apps are frequently deployed at the departmental or business unit level. In many of these organizations, it’s likely that there’s additional adoption occurring below the radar screen of IT.

Read the full study here.


July 27, 2007

An answer to the first obvious question – why a blog on SaaS management?

As with many in the software industry, we at Conformity are excited about the potential for software-as-a service and on-demand models to fundamentally reshape the way applications and technology are used in organizations. As as there’s no shortage of statistics showing the rapid growth of SaaS adoption, whether it be among SMBs or enterprises, we think users are agree.

But as with everything, with rapid growth comes growing pains – the ‘laws of physics’ still apply to SaaS. We created this blog to help surface and address the management issues we’re seeing and hearing from organizations that have strategically decided to ‘go SaaS’, and leverage the model as much as possible. While many of the these issues that are arising have been around for awhile – access management, asset management, information security to name few – the on demand world is requiring users to take a fresh look. This is true both for the SMB that has gone ‘all SaaS’ and is using over 10 applications to support all of its core business processes, and for the large enterprise deploying across thousands of users globally.

Our goal is simple – to help identify and address the management and control issues that stand in the way of SaaS becoming a viable alternative for any organization. We look forward to the conversation!