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SMBs, enterprises evaluating SaaS IT models

Posted on July 20, 2009

Cloud computing and software as a service (SaaS) has no doubt been hyped over the past 18 months.  The battle between SaaS and on-premise applications continues to heat up, a debate compounded by the more recent green IT initiatives which have been gaining in popularity among executives and IT professionals.  After reading the Gartner Predicts Report: 2009, I was intrigued by the analysis presented both on and under the surface. 

Because of SaaS, CIOs now have more enterprise software options than ever before, which can be integrated within their current network infrastructure.  How an organization’s IT environment is designed and developed varies widely based on organizational needs, industry sector, user base and scalability to name just a few.  The choice in enterprise software licensing models has benefited those CIOs who can integrate SaaS into their existing environment. 

However, I see the distinction as whether SaaS fits at all into an organization’s network topology. The answer requires the CIO and/or IT managers to critically assess key network components and end user requirements in addition to financial considerations. CIOs also are being asked to better understand and consider the implications to corporate balance sheets and income statements in addition to the life cycle planning of an application or system. 

Evaluating the true cost of ownership for both SaaS and on-premise applications is important.  SaaS has always been touted as having a low barrier to entry for smaller firms (and it does). SaaS provides small- and medium-sized businesses with enterprise applications without significant infrastructure investment. 

This technology model is becoming just as appealing to enterprises beyond cost considerations, including its ability to deploy standardized applications. Standardization is key here in controlling how systems are utilized and the efficiency with which they can be deployed. 

There is no one-size-fits-all solution to network development, but new software models aid in creating a sustainable and efficient IT infrastructure whether you are a 50-person organization or a 50,000-person organization.  The decision for SaaS or on-premise applications involves complex business decisions and requires IT managers to have closer access to executives as part of the business-planning process. 

The market for cloud services will no doubt continue to grow and for the most part will do so as a complement to existing IT environments.  As companies replace ailing legacy systems, SaaS may become an appealing option as services continue to move into the cloud. 

A hybrid approach to enterprise software is necessary in managing both resources and function. It could be costly to not analyze the benefits of each in addition to limiting the future capabilities of your network. Consider all the options as you look to build out your IT infrastructure; it just might help in shaping your strategic vision.

– Aaron Petras

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