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COVER STORY ■
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‘The business sees the benefit
because it ends up with something
it can use very quickly’
SOMETIMES you have to step back before you can go
forward. The technology boom of the late Nineties brought
many innovations with it, several of which promised much
but ultimately fell short of delivering the intended benefits
to IT leaders and the businesses they served. Some had the
germ of a good idea but never took root: the application
service provider (ASP) model, for example, was a concept
where software would be hosted in large data centres and
rented to organisations as they required. However, the
conditions weren’t quite right for ASP to flourish – the
lack of broadband infrastructure was one such obstacle.
Sounds familiar? The fundamental concept behind
software as a service (SaaS) – sometimes referred to as
on-demand or cloud computing – harks back to the ASP
model. However, in the five years or so since SaaS first
emerged, it has overcome the growing pains that blighted
ASP and is bedding down in mainstream acceptance.
The research firm Gartner is bullish about SaaS and has
said that much of this year’s growth in the IT market will
come from services delivered on a pay-as-you-use basis. By
2012, it predicts that 80pc of large enterprises will pay for
some cloud computing service and 30pc of them will pay
for cloud computing infrastructure. In a recent briefing
note, the company identified SaaS as a significant technol-
ogy shift and forecast that software spending would grow
more than other categories. “SaaS/cloud computing,
service-oriented architecture (SOA)/Web 2.0 and open-
source software are causing huge changes to the software
market. Many of these factors are impacting market
growth as enterprises replace assets with per-use services,”
said Gartner managing vice-president, Joanne Correia.
Sceptical CIOs with a few years under their belts have
encountered many ‘next big things’, so what’s different
about SaaS? Paul Turley, regional sales manager with HP
Software, believes the model represents choice. “There will
always be organisations for the foreseeable future that
want to own, manage and operate their own technology for
very valid reasons. There are others that want to focus on
their core business and leave the management of their
technology to others. In many ways, this is analogous to
the outsourcing market; it works for some and for others
it is not of interest,” he says.
SaaS is often typecast as being suitable only for small
companies, but its supporters, naturally, think otherwise.
The CRM provider
Salesforce.com has been one of the
driving forces of SaaS worldwide and boasts Merrill Lynch
and Dell among its customers – both with installations of
more than 40,000 seats. Ireland is not quite at that stage
of maturity and familiarity yet, but it is getting there,
September 2008 Knowledge Ireland 29
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