The conventional wisdom surrounding software-as-a-service is that it is a cost effective method for providing a relatively simple set of applications as long as they don't require much in the way of customization.
But as vendors and customers alike become more comfortable with the concept we're not only starting to see a broader array of application sets being delivered as a service, we're also starting to see applications that target some high-value niches.
For example, Signal Demand has created a software service for companies in the process industry that is designed to help them set the optimal price for a range of items such as corn, beef, chemicals and timber.
The system is based on a set of algorithms developed by analysts that work for Signal Demand, which essentially allows the cost of hiring these high-priced specialists to be deferred across all the customers of Signal Demand. In order for the system to really work Signal Demand has to send in a team of specialists to first cleanse and then organize all the pricing data that could reside in a spreadsheet, database, on any number of pieces of paper or between the two ears of various employees. Once that data is properly set up in the system the analysts can update the system on a semi-regular basis as new customers and products are added to the system. From that point, Signal Demand makes available to its customers business intelligence tools from MicroStrategy to help them better understand pricing trends.
Another place where we are seeing the software-as-a-service model expand is into the area of data governance. Adaptive has launched a new on-demand service that is based on a framework that customers can customize.
All things related to data governance tend to be time consuming and most customers don't really know where to get started. What Adaptive has created is a series of template that customers can use to create a model that can be audited. A series of wizards are then called upon to walk customers through the set up process. None of this will take the pain out of the auditing process but it does allow customers to leverage software-as-as-service infrastructure to create a launch pad for creating an approach to data governance.
Even the whole category of business intelligence-as-a-service is now starting to see some segmentation. For example, a company called LogiXML has created widgets that allow customers to embed a business intelligence service inside any Web or on premise application. This concept, now available in beta, essentially expands on the notion of delivering business intelligence as a service to make business intelligence an on demand component of an enterprise application.
What all this activity implies is that we're seeing the maturation of the software-as-a-service model. It can now be used to deliver very specific point solutions for various vertical industries, as platform for a specific set of business processes or used as a component of another set of applications.
From an IT perspective this means that the conversation should no longer be about whether to use SaaS, but rather where does it make the most sense. For some customers, that may mean relying on SaaS for any number of horizontal applications such as CRM. But the odds are good that an even great number of customers are going to rely on SaaS to augment and supplement there existing IT operations. And as that continues to happen the conversation is going to be about how to best blend all these options that it is about how any given service is actually delivered.