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Article

Title: Tailored Software Becomes Key to SaaS Model's Success

Author: Twentyman, Jessica Article Type: Product Analysis
Source: Financial Times, pSR6(1) Publication Date: Oct 3, 2007
URL of Publication: http://www.ft.com

With recent advances in customization and integration, Software-as-a-Service (SaaS) is becoming a major feature of the IT landscape. With SaaS, applications and data are hosted, managed and upgraded by a central provider for a monthly per-user subscription fee. The absence of licensing fees, as well as installation and maintenance headaches, has companies very eager to jump on the SaaS bandwagon. Its ease of use, rapid deployment, and limited up-front investment have driven worldwide sales to an estimated 21 percent sales growth. The IT market research firm Gartner estimates that by 2011, SaaS will represent one-fourth of global business software sales. Naturally, there are liabilities associated with SaaS. The truism that 'information is power' raises questions of vulnerability for companies choosing to place their data in the hands of an external service. However, most potential SaaS weaknesses have been minimized. Reliability and availability are even better for many on-site software systems, with uptime guarantees by industry leaders NetSuite and Salesforce.com of more than 99 percent. Concerns over companies' abilities to customize centrally-offered software and integrate it with other applications have likewise been addressed. To enhance integration, most SaaS services offer application programming interfaces (APIs) which follow web-based standards and allow data to be exchanged by different systems. Of course, increased customization and integration bring an increased demand for outside help. But a 'consultancy ecosystem' is emerging to meet this demand. 'Already,' says Robert Bois of AMR Research, 'there are few areas of the enterprise applications industry untouched by SaaS.'

Companies:
NetSuite Inc Salesforce.com Inc

Products:
Web Hosting

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