Software-as-a-Service Tops Industry Trends

Software-as-a-service (SaaS) is going mainstream and innovative technology vendors are being rewarded by rising adoption rates. The simple reason, which has always been at the heart of enterprise computing solutions, is customer value. SaaS offers significant customer benefits including lower costs that are aligned with usage, minimal up-front expense, rapid implementation and time to value, and reduced risk. Industry analyst firm Gartner predicts that by 2006, 15 percent of new sales application deployments will use a software-as-a-service model and by 2010, 30 percent of all new software will be delivered as a service. And while the mid-market is an obvious target for this model according to research from analyst firm Summit Strategies, one SaaS application area of particular interest to larger corporations is channel management. Channel management solutions are designed for complex ecosystems of legally independent partner organizations, aligning business processes across the entire value chain from vendor, to partner, to customer. To truly manage indirect business relationships, enterprises need to close the loop between all participants, but this can be a daunting task for global channels comprised of thousands to tens of thousands of partner participants. Achieving this level of business process alignment requires an application that reaches well beyond traditional enterprise boundaries. Enter channel management software-as-a-service: an n-tier, browser-based, Net-native application supporting XML-based Web services standards to streamline process integration. It represents the combined software architecture, delivery, and user interaction model needed to support hundreds of thousands of globally dispersed users. The software-as-a-service delivery model is the best choice for a channel management application because it:
  • Can be implemented in days or weeks, rather than months or years
  • Promises and typically delivers significantly higher availability rates than in-house applications
  • Can be managed and transparently updated by the ISV, rather than a customer's own IT staff
  • Can reduce security risks by providing external users with access to a system that does not reside within the customer's enterprise Vendors, of course, are just beginning to understand the powerful implications of this new delivery model. Adoption rates will continue to rise as enterprise-class SaaS vendors pioneer enhancements in delivery, usage, and security, and these enhancements will, in turn, spur even greater market acceptance. Innovators such as BlueRoads and others who will enter this space will need to:
  • Blend the ability to meet high expectations and individual requirements (characteristic of enterprise customers) while maintaining a leveraged infrastructure model to keep costs down,
  • Shift deployment services and expertise away from old-world technical deployment skills toward an emphasis on process alignment and true business process re-engineering,
  • Advance SaaS infrastructure and architecture models to meet security requirements for mission-critical enterprise applications, addressing access, authentication, and data encryption, while not overengineering the solution (keeping it simple to deploy and use)
  • Evolve service level agreements to reflect the individual requirements of enterprise-class customers by providing various levels of programs. Enterprise SaaS market leadership will not be won through more product features, but rather by offering a scalable service that continues to drive down the total cost of ownership and makes users successful with the application and in their jobs. By focusing on the best economic and technological approaches to solving the complexities of indirect channel business, customers have the ability to leverage the role that software-as-a-service plays in turning the channel into a competitive weapon. About the Author Axel Schultze is the president and CEO of BlueRoads Corporation, a channel-management software company. For more information visit
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