Techies love taking nearly impenetrable phrases and turning them into completely impenetrable acronyms. HTTP, XML, RSA, and so on. Most of the time those outside the tech world can just breeze past these terms and move on, but occasionally one will catch on and become a part of everyday business speak. Lately, the acronym SaaS and the phrase ‘cloud computing’ have done just that.
SaaS stands for Software as a Service, which is only slightly less vague than its shortened cousin. But this lack of clarity hasn’t slowed the growth of this software model. From 2004 – 2006 SaaS offerings experienced a 18% growth and from 2006 – 2011 Gartner is predicting a whopping 200% increase in the use of SaaS.
If you’re not entirely sure what exactly SaaS is, you’re forgiven. In fact, nobody really seems to agree on an exact definition for it. Fights have broken out as different service providers have accused each other of being less than true SaaS implementers. Some commentators have used analogies of religious war. Who knew software was so exciting?
The major point of contention is something called multi-tenancy. Multi-tenancy is a feature of a program that allows multiple users to work with a single instance of the software. To take an example, Google. At any given moment millions of people could be using Google’s search engine software. Does Google have to start up a separate copy of its programs for every single person? No. Everyone’s search requests get processed by essentially the same program, using essentially the same database.
The issue is that there are a number of ways of implementing multi-tenancy. Some argue that certain implementations aren’t pure multi-tenancy, and thus not pure SaaS. What does this mean for the end user? Almost nothing.
Ultimately from a business perspective, the choice to go with a SaaS provider is simply a choice to outsource a part of your IT infrastructure. As long as you make sure to choose a provider who’s capable of meeting your needs by delivering a consistent service, then it isn’t really important whether it’s true multi-tenancy, orthodox SaaS or a variant in the religious war.
Statistics suggest that ultimately IT outsourcing is a good thing, especially for SMB’s. An April 2007 by BizTechReports.com found that companies who outsourced their IT reaped a number of benefits. Here are some of the key findings below, as cited in the BNET blog post about the study
* The majority of SMBs that outsource (54 percent) spend less than 5 percent of annual revenues on maintaining and upgrading IT infrastructure, while 64 percent of non-hosting companies spend more than 10 percent of revenues on IT.
* Companies that outsource (68 percent) are much more aggressive about using IT assets to engage in e-commerce than companies that manage technology infrastructures internally (29 percent).
* By more than 85 percent, outsourcers report that their IT organizations play an important role in remaining competitive in their respective industries than those that do not outsource.
* Outsourcers suffer fewer security incidents and technical failures than their non-hosting counterparts, and they are better positioned to avoid or mitigate downtime risks.
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