The old adage of "Never outsource your mission-critical business functions or processes," no longer holds true. More and more companies are seeing the benefits of a Software as a Service (SaaS) business model. It enables companies to focus on revenue-generating activities and lets the service provider handle the product upgrades, hardware, performance and network connectivity. IT departments do not need extensive training nor do they have to worry about implementation, database configurations, or wonder if the technology with integrate interoperably with the existing infrastructure. Deployment is a matter of days compared to a matter of months so ROI is achieved that much faster.
There is absolutely a paradigm shift to the SaaS model. Even giants like SAP are moving into this space for a competitive advantage. SAP is taking the NetWeaver platform and moving their Enterprise Services Achitecture (ESA) to a services architecture. They even went as so far to acquire a SaaS company to provide added functionality to their CRM/SRM solutions.
Microsoft is another company that is trying its best to adapt to a changing world where legacy software is no longer king. A source close to me in the Microsoft camp told me that there is much confusion these days. He is told to say that their customers still prefer on-premise solutions yet they went out and acquired Placeware 2 years ago to provide a SaaS web collaboration solution. (They have not been successful in selling Live Meeting to their customers. Even their Microsoft Gold Partners opt for WebEx because of the added security (WebTrust Certification), robust functionality, and real-time communications architecture where nothing is ever stored on the WebEx network.) Instead of admitting that the Live Meeting technology is not where it should be from a reliability, ease of use, or functionality standpoint, Microsoft simply says, "our customers like on-premise solutions. They do not like and stay away from Live Meeting because all content is stored on our servers." This is 100% correct! What company in their right mind would feel comfortable storing content and company data on servers outside of their firewall? Talk about increasing one's RISK exposure.
My personal recomendation to any IT individual is to look closely at the Live Meeting solution from an infrastructure and data transmission perspective. Ask them about the "iVault server" and how and why content needs to be upload, converted and stored on their server. Ask they why they cannot support video if communications are truly "real-time?" Microsoft is a great company. I own stock in it myself and it has made me plenty of money over the past 8 years but to invest in Live Meeting simply because it is from Microsoft is foolish.
WebEx is helping customers experience on-demand software delivery by providing more people with access and exposure to the model," said Erin Traudt, IDC software as a service research analyst and co-author of the report, "Recent studies have shown increased customer interest in the SaaS delivery model and web conferencing applications is high on the list in terms of SaaS adoption."
The report also states that, "IDC finds that not only are cost-savings benefits and rapid implementation times fueling overall SaaS adoption, but also intangible benefits such as increased employee productivity and efficiencies are being recognized."
I predict we will start to see more and more companies following in the footsteps of WebEx. 27 consecutive quarters of revenue growth...hard to argue against the SaaS model.