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SAAS rising

SAAS rising

SaaS could make life more exciting and profitable for businesses by allowing them to configure their own computer applications

Yogesh Jagga is the CIO of a successful mortgage brokering company in California, which has its IT as well as its sales staff in India. Parsec Loans, the company, sells loans from some 20 American banks to retail customers in America.

Faced with enabling his company's sales with IT that would bring Parsec cost-effectiveness and few headaches, setting up the IT shop in India was a no-brainer. But Jagga took it a step further by not investing in any stand-alone customer relationship management software. He bought seats on Salesforce.com's enterprise edition to enable a sales team that operates from a call center in Gurgaon.

This allowed him to exploit a simple yet powerful idea. Salesforce.com hosts the customer relationship management (CRM) software for Parsec and gives the company's sales people all the access to the software and the related infrastructure they need to function effectively. "Using the Internet and the telemarketing agents, it takes up to 45 days from initial queries to the loan being disbursed," says Jagga. "This is laborious, requires tasks such as appraisals, multiple partners -- the lending banks -- are involved, and we need to work together. This is more of a relationship management effort," he explains.

Buying a subscription to the CRM then made a lot more sense than the higher initial investment involved in the conventional route of buying software, hardware and hiring people to put it all together. "I don't have to worry about initial expenditure. There isn't any down time, and if there are any upgrades or maintenance to be done, we know in advance."

The power of the idea comes from a host of other companies simultaneously being able to do exactly the same thing as Parsec. It's called 'Software-as-a-Service'.

Software-as-a-service (SaaS) is being touted as different things to different users by different vendors. The consensus, however, is that it could make life more exciting -- and profitable -- for businesses by allowing them to configure their own computer applications. They can do so only when they need to, with a little help from the CIO organization.

For the users, this might represent a reduction in upfront investments in computers and software -- money saved, which might then be employed more directly in the business. For the CIO, SaaS can take away the pressure of having to quickly deliver an application that the business users are hounding him to build yesterday -- the CIO can then ask his men to focus on building better rules for integrating IT with business and, down the line, on integrating the applications that come as a service with existing stand-alone applications.

For the vendors, the business model involves hiring out software applications for a subscription-fee, with upgrades and support thrown in. The challenges before SaaS include integration with existing customized software applications, and legal as well as security measures of allowing the vendor to host data for businesses -- usually a requirement for SaaS. Yet, a growing number of companies, from Parsec Loans to multinational network equipment maker Cisco, are embracing SaaS. Vendors too are coming together to help build an ecosystem of SaaS delivery. The opportunities are undeniable, and it's a matter of time before the challenges will be surmounted.

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