As Managing Director of the company that developed the world's first browser based service management software, Colin Brown of Tesseract is a bit of an expert when it comes to both SM software and the Cloud itself so we asked him to give us some guidance on the SaaS model...
I’ve been asked by our dear editor to look at the SaaS model in delivering a service management application. SaaS or Software as a Service has been around many years but has recently entered the mainstream with the term “cloud”.
There is no doubt that many large software companies ignored SaaS, hoping it would go away, their business models based on big sales and complex, expensive IT infrastructures. Not small monthly amounts that SaaS proffers.
So without certain advancements - cost effective data centres, Internet and predominantly browser based software, SaaS would not exist. The cost would have been simply too high. There is no question that the SaaS model was born out of the right technology.
In 2005, Tesseract was in the vanguard of offering this as another option to deliver its service system. Salesforce.com has made SaaS more mainstream and now we see companies developing application software that is only available on SaaS and have a business model built around it. All of this in a short space of time.
From a service management perspective, the high cost of owning sophisticated software, which is a significant barrier, has been removed by SaaS. Now relatively small companies can now compete with larger rival as they can rent the same standard of software. This renting of the software reflects a huge shift in mind set by the developers. Historically, they would have been terrified of the software being copied and low value recurring revenue threatened their business model. However, most independent service companies have recurring revenue which actually fits neatly with “renting” the software.
This renting of the software reflects a huge shift in mind set by the developers
In large part, this is thanks to the hosted server a.k.a. The Cloud. SaaS data centres handle all the expensive, complex fire walls and demilitarized zones that keep information safe. We work with Rackspace in the US, the leading hosting and cloud global supplier, and Memset, an award winning UK supplier of hosting and cloud solutions. SaaS is also safer in that there are no systems in the office in case of disaster or power shortages. However, I think it is wise to invest in additional servers as back-up, giving a higher degree of resilience. This is something we offer at Tesseract.
The support offered under SaaS is also advantageous. Since access to the software is controlled by the supplier, all the software upgrades are installed and installed correctly (free of charge at Tesseract). Employees are no longer able to “play” with the data as it is hosted remotely, which reduces system errors.
However, it does not mean businesses are isolated from their systems, Most modern web products support Web services, including Tesseract, allowing connectivity to tracking solutions, accounts/erp packages, post code hosted solutions, hosted customer survey solutions and all new web-based services.
We have found that the service management industry is a diverse bunch with different requirements so we offer the ability to “Pick ‘n’ Mix”. Some customers take the rental and support option but would rather install the software on their own server; other customers require remote hosting and support but they prefer to buy the software and others want the whole SaaS package of hosting, rental and support. With all three options, the internet and/or an intranet are the delivery routes.
SaaS has really taken off in the US, more so than in the UK currently. All of our new business in the US is SaaS and we expect the UK to follow suit.