Corporate SaaS considerations myriad, complex

Amid the growing popularity of software-as-a-service, IT managers are faced with a sometimes monumental task of developing big-picture strategies and policies to govern service-based applications as well as defining performance metrics and support.

Devising corporatewide standards for online service deployments is a way to ensure that services are run under the same sort of parameters mandated on internal networks for things such as security, backup, storage, data integration and integrity, and business processes. But to what end?

Studies show that near-term strategies can be shortsighted because savings can diminish over time and complexity can arise as more services are deployed. In addition, those deployments can bring compliance risks and auditing issues, and one-off service contracts may eventually need to be altered to align with any enterprisewide strategy.

The need for such a big picture look is becoming critical as the use of services within companies begins to grow.

A recent survey by Cutter Consortium shows that 63% of respondents are using the SaaS model in their organization while 28% are considering it. Last year in the same survey, 32% were using SaaS and 36% were considering its use.

Furthermore, Saugatuck Technology says that by year-end 55% of North American businesses will have deployed at least one SaaS application, and Gartner predicts that by 2013, functional equivalency between SaaS and on-premises software will be commonplace across a range of applications.

A Gartner study last year found that SaaS deployments in most large companies began without the CIO knowing about them or having any involvement. As part of the findings, Gartner recommended that CIOs "develop a SaaS strategy and incorporate it into their application strategy and portfolio management."

Getting the message

Some executives are pioneering the advice and starting to include long-term strategy when considering the promise of short-term gain.

Derrick Jackson, systems and database manager for Mapp Construction, headquartered in Baton Rouge, La. , has formulated a policy that gives his company an "exit strategy" for when it might want to take an application in-house.

"You have to evaluate these providers on whether or not they have a plan in place to get you off the SaaS model, sort of an exit strategy, in the long term," he says.

Mapp uses iEnterprises' Empower CRM software, which is hosted on IBM BladeCenter servers, IBM WebSphere, DB2 and Lotus software. That configuration, Jackson says, provides him with the ability to move in-house when and if the time arises.

"You have to plan five years from now for when the application is growing out and is a cornerstone and how you get it back into your environment if you want to do that," he says.

Jackson's view is borne out in recent Gartner research that says cost savings begin to break down after the first two years of a SaaS deployment.

Jackson says having services that run in a hosted infrastructure that somewhat aligns with the internal infrastructure can make moving applications more cost effective.

Others are looking at SaaS providers as partners who can help educate internal staff for that possible in-house move or to augment the service with in-house work.

"We partnered with our provider to help train our Web application programmers," says Anna Sherony, a privacy and information officer for a financial services firm who last year contracted with WhiteHat Security to provide Web site security services.

The company's programmers learn the ins and outs of the service and how to write more secure code. "It is important when looking at these solutions to have a partnership. You have to be able to build a relationship with the vendor," Sherony says.

Join the CIO Australia group on LinkedIn. The group is open to CIOs, IT Directors, COOs, CTOs and senior IT managers.

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