How Companies Swiftly Deploy Apps

Businesses are turning to Software as a Service, or SaaS, for fast software implementation with reduced upfront investment and minimal IT staff resources. They’re taking advantage of a growing portfolio of applications using the on-demand model.

Accelerating time to market and reducing cost of operation keep CIOs in their jobs. Moving the software’s management and operation from the internal IT department to a vendor with intimate knowledge of the software’s capabilities also can maximize benefit to the enterprise.

SaaS offerings are growing in number and application type, but most of the new applications comes from small startups with short track records. Traditional licensed software platforms purchased and amortized over multiple years of a capital budget generally remain less costly in the long run than SaaS alternatives. Businesses also remain reluctant to relinquish existing investment in critical applications or to entrust control of their IT resources to a third party.

Still, SaaS is poised for tremendous growth. Granted, licensed software will continue to dominate the market. SaaS revenues will reach more than $19 billion by 2011 from $6.3 billion last year, according to Gartner, and will account for 25 percent of the total software market.

A recent survey of Service & Support Professionals Association members by consulting company McKinsey found the proportion of CIOs considering SaaS adoption jumped to 61 percent this year from 38 percent in 2006. The survey also found that, of 34 software application areas examined, only nine, including financial change and configuration management, are unlikely to see SaaS adoption by 2008. “It is clearly a disruptive force causing virtually all software players to provide some type of service solution,” Gartner analyst Robert Desisto says. Indeed, industry software giants Microsoft, Oracle and SAP have either added an on-demand element to their portfolios or will soon enter the SaaS market.

Business are demanding vendors provide options for software purchase and management, and the largest vendors believe their ability to mix, match and migrate users among service-based and licensed portfolios is best. Some SaaS startups will provide acquisition fodder for the established vendors, and a great number will eventually fail, leaving some businesses reluctant to embrace the unknown. But the risk of using service-based products is lessening, and a decision to abandon an SaaS-based project generally carries less of a penalty than exiting a licensed platform. “CIOs are looking for ways they can out task rather than outsource their IT requirements,” says Jeff Kaplan, founder of IT consultancy THINKstrategies. “The last wave of IT evolution was to hand as much of the mess as possible over to a third party. Now, CIOs are selectively finding specific tasks that can be addressed by software as a service.”

Case in point: In 2005 Internet security specialist SurfControl was having a CRM meltdown. Growth fueled by acquisitions had left the company with engineering and sales operations strewn around the globe, each running a different version of Goldmine customer relationship management software. SaaS allows for the same software to be used everywhere in the enterprise, so SurfControl leaders were attracted to the on-demand CRM solution furnished by Not only that, but they hired Salesforce vice president of systems architecture Max Rayner as SurfControl executive vice president of products and services and charged him with revamping their floundering IT operation.

“There was no systems control, and business processes were significantly different country to country with each version of the software,” Rayner says. “It was imposing an immense drag on the company. Just getting a forecast was like a meeting of the College of Cardinals in Rome, with the smoke rising only weeks later.”

Last November, SurfControl implemented a phased rollout of Salesforce CRM to 300 workers in Europe, America and the Asia-Pacific region. It went live companywide in February. In the first quarter of use, SurfControl has seen a 10 percent increase in sales, with a smaller staff of commissioned reps. The company has also reduced demands on the IT staff, which had spent months attempting to coordinate the disparate Goldmine platforms, Rayner says.

SurfControl has turned to Salesforce for sales, marketing, technical support and internal case assignment. Staff meetings are now productive, with various groups working off a standard platform, distribution of software upgrades is easier, and use of a “modern” CRM platform improves sales staff recruitment, he says. “Every time we wanted to make a business process change, or introduce a new offering, it took months to coordinate differences. Now when a marketing campaign generates leads, we get direct and usable data. In the bad old days, the file had to be broken apart and loaded in the specific program, and two months later when the lead was dead, we’d see the information.”

Ask Your CEO:

Do we understand how well regional and task-oriented groups within the company communicate?

Ask The Sales Staff:

Are you satisfied with the usability and reach of your salesforce automation and CRM software?

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