Internetnews.com wades through the top stories and issues that rocked the industry in 2006 in this week-long series.
This year will likely be remembered as the year that software-as-a-service
(SaaS) finally came into its own.
Players in this business model have gone from edgy to establishment while
on-premise vendors have gone from dismissing on-demand software to mimicking
its attributes. And, in the surest sign that a market is maturing, SaaS
companies have gone from evangelizing their own business models to competing
with each other.
The business model has succeeded largely by putting performance issues to
rest, convincing enterprise clients that their data is just as safe in the
cloud as behind their firewalls, and by addressing overhanging issues like
customization and interoperability with legacy systems.
The year in SaaS actually got off to a rocky start, as the sector dealt with
AppExchange benefits Salesforce.com by giving it a way to offer its customers a wide
Since the launch, Salesforce.com has done nothing but build on that
Later this year, it introduced a new Java-like programming language to help developers customize its applications on
This promises to help address connectivity issues with legacy systems from
Netsuite, Salesforce.com’s most well-known rival in the SaaS space, launched
All in the name of creating an ecosystem. The industry, say analysts, will never look back. Next page: The big fish want it, too Page 2/2
They point to a growing adoption of SaaS applications among larger
And there are hard numbers to support those claims.
According to a study conducted by THINKstrategies and the Cutter Consortium,
In fact, Jeff Kaplan, managing director of THINKstrategies, said that the
Not only are more companies using SaaS, but they are using it for purposes
A survey of Global 2000 companies published by Forrester Research reveals
That figure is one of several debunking the idea that SaaS applications are
Other studies show the growth of SaaS into new vertical niches.
For instance, the Aberdeen Group published a study
According to Forrester analyst Ray Wang, SaaS has finally convinced the
“Issues around data security and reliability have pretty much gone out the
No wonder then that new SaaS vendors proliferated in myriad industries: Workday
Traditional on-premise vendors have also either converted entirely to SaaS
SAP
Other on-premise vendors to have switched to SaaS or created hybrid versions
Microsoft
Beyond acknowledging the importance of SaaS, it created a SaaS-oriented developer site in August and a SaaS-enablement program for ISVs in November.
The new Exchange Server 2007 offers a hybrid of an on-premise e-mail server
This was also the year that traditional vendors decided to buy their way
Unlike Oracle’s acquisition of Siebel, these were made specifically for the purpose of getting into
Payroll specialist ADP
Kaplan of THINKstrategies agreed that SaaS went “well beyond the tipping
“The tolerance won’t be there, and people will have second thoughts.”
the PR fallout from outages at bellwether Salesforce.com .
But the iconic vendor of on-demand customer relationship management (CRM)
tools quickly reversed the bad-karma tide in January by shipping AppExchange, which is a platform for other SaaS-based point solutions.
range of applications, thus preventing defections from its installed base.
platform, launching OEM Edition, which subsidizes smaller SaaS vendors looking to create point
applications using AppExchange as a base.
the back end.
vendors like SAP and Oracle
.
SuiteFlex, an application development platform of its own, this summer. Internetnews.com wades through the top stories and issues that rocked the industry in 2006 in this week-long series.
enterprises, as well as defensive reactions from traditional on-premise
vendors, as indications that SaaS has gone from being a minor irritant to a
major threat to traditional software vendors’ business models.
almost half of all companies are already using SaaS in one form or another,
and more than a third are considering adopting a SaaS-based application.
number of companies considering a SaaS deployment rose by 10 basis points
compared with last year.
that go well beyond CRM, the traditional bailiwick of Salesforce.com.
that 54 percent of enterprise are using on-demand human resources applications, and 40 percent are using SaaS-based ERP
primarily for smaller companies or narrow departmental buys.
this year showing that more than 50 percent of companies have deployed a
SaaS supply chain management application.
doubters.
window, because most of the vendors have been able to deliver on what they
promised,” he told internetnews.com.
for human resource management; nSite for business intelligence; and Arena Solutions for product lifecycle management come to mind.
or have developed hybrid models combining Internet-based application
delivery (on-demand) with a single-tenancy architecture (harkening to their
on-premise roots). was, to its credit, among the first to sense the
shift. It launched a hybrid SaaS version of its CRM module, mySAP,
in February.
include Maxager in manufacturing productivity and Callidus in compensation.
has so far resisted putting its software
on the cloud, but it has been making strides in that direction.
with hosted hygiene services.
into the space in a big way.
the on-demand game. acquired HR specialist
Employease this summer, and last month, Business Objects acquired nSite,
an on-demand counterpart.
point” this year, but did warn that another significant outage like the one
suffered by Salesforce.com customers last year could dent the momentum SaaS
vendors have worked so hard to gain.
