Today, most software you use is installed and runs on your computer, for example Microsoft Office and Adobe Acrobat Reader – we call this the traditional software model. Over the last few years we’ve seen more and more applications available on the internet and accessed via your web browser, for example Hotmail or Gmail and Flickr – this is known as software as a service (or SaaS). SaaS has the potential to significantly change the software landscape. Some people predict it will largely replace traditional software. Looking at some of the advantages, its hard to dispute these predictions;
- Always use the latest version
- Access the application from any internet-connected computer
- Its often free, or appears to be free
The first two benefits are pretty obvious so lets explore at that last statement; how can software be free? Simple: its funded by advertising just like many television channels. Why are companies like Microsoft, Google and Yahoo (to name a few) interested in providing application for “free”? Plain and simple: you have to have a username to use them, and once signed in, they can track what you do on their websites and ad networks. This tracking is then used to display relevent adverts on the pages you view. Lets look at an example; I have a Facebook account, in my profile I’ve told them rock climbing is my main hobby – now I get Google adverts all over Facebook offering me climbing-related products and services.
Are you feeling that your privacy is being invaded here? Wake-up call: next to nothing is anonymous on the internet. Websites & Internet service providers may not know your name, but they’re tracking the sites you visit and every time you supply some information, their profile of you gets updated. How? By something called a cookie. SaaS applications are the new battleground for internet advertisers simply because they’re able to get richer profiling information on you. Every email you send/recieve via Gmail helps Google build up a profile of what you’re interested in – therefore helping them target you with more and more relevant adverts. The more relevant the ad, the more likely you’re going to click on it – and this is where they get paid. And its not just Google, they’re just the best at it…
Whilst I digress, this is useful background. This post is really about a whitepaper I wrote in 2007 which looks at the impact SaaS may have on software and large companies (which the IT industry calls Enterprises). Microsoft publish the Architecture Journal four times/year covering many subject which are of interest to Software/IT/Business Architects. The August/September 2007 edition was focused on SaaS and ran my whitepaper entitled “The Implications of Software plus Services on Enterprise IT“. I’m proud to have written the article and I’ve had a lot of good feedback on it, so I’d like to share it more broadly.
To summarise the conclusions I draw in that paper; the maturity of SaaS providers is not sufficient for enterprises for a number of reasons:
- SaaS is simply not reliable enough yet as you can read here
- Integration with the enterprise existing IT is difficult or impossible
- Most SaaS providers do not provide a data export capability – therefore you’re tied to that provider.
Consequently, most SaaS applications are today aimed at consumers or small/medium business and generally are not providing line-of-business functionality. However, this is changing rapidly; point 1 is getting better as SaaS providers gain more experience and as the big players move into the market (Google, Yahoo, Microsoft). Point 2 will be addressed when the SaaS providers serious start to target the enterprise customers which will also drive number 3.
Ultimately, we’re undergoing a fundemental change to the way software is being developed, delivered and used along with a corresponding change to business models. Its an exciting time, and we, the users will gain from the invetments and innovations this change will bring.
Nicholas Carr has written an interesting article on how Google is disrupting many traditional businesses, from newspapers to movie studios and internet firms, and in so doing he explains their motivations (in his opinion) and draws a comparison with other businesses, including Microsoft.