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Development of SAAS Based Applications

Written by: Jon Hansen

Article Overview: Member Question: Many research firm has predicted SAAS is going to become a next level Application Development. 1.How can i convert a existing applications into SAAS based Apps. 2.What are requirements need to develop a SAAS based Applications. Question Submitted By: Rajasekar Nonburaj Business Intelligence Consultant India

Development of SAAS Based Applications

While Software as a Service (SaaS) is a model offered by many of the "next generation" vendors such as COUPA, it is not indegenous to new organizations or to a specific "emerging" technology.

Based on my series of interviews with an Ariba senior executive I wrote an article titled The Ariba Interviews: Re-engineering the Future of On-Demand that would be worth reading.

SaaS, which was originally referred to as an On-Demand model, is not new to the industry. However its adoption and subsequent introduction to the market by incumbent vendors such as Ariba and SAP have been somewhat slow due to the challenges associated with the model's inability to support of their current infrastructures. Specifically, the SaaS model substantially reduces the revenue streams associated with traditional licensing models and adjunct maintenance contracts thereby making it virtually impossible for these companies to generate the necessary levels of revenue to maintain and/or sustain profitability.

In fact it appears that Ariba's more aggressive move as of late to an On-Demand pricing structure was predicated more by their continuing financial struggles (between 2001 and 2004 Ariba lost $3 billion on $1 billion in sales), rather than a shift in technological capabilities or visionary ideals.

Otherwise they too may have followed the lead of other Vendors like SAP, whose gradual "dipping of their toes into the SaaS waters" was demonstrated by their somewhat muted announcement at last year's Sapphire conference that a $10K trial license for their strategic sourcing module would be made available to interested organizations.

The fact is that SaaS may very well be available through your current vendor without having to make a change.

This point is demonstrated in a 2-Part article I wrote titled Yes Virginia! There is more to e-procurement than software.

What is interesting about the case study of the Commonwealth of Virginia's eVA program is that back in 2001 (when it was launched) market awareness of the On-Demand or SaaS model was not widely known.

Despite this, and in an effort to land the contract, Ariba in conjunction with their implementing partner American Management Systems (now CGI) agreed to a contract whereby they would absorb the lion's share of the up front implementation and customization costs in return for receiving a percentage of all transactions processed through the new system.

This meant that Virginia's focus shifted from an exercise in cost justification to one in which operational imperatives established with key stakedholders became the focal point of the initiative. This also provided the vendors with the necessary impetus to ensure that the system became "effectively" operational as quickly as possible.

The results needless to say are impressive. In fact Virginia represents the minority of organizations (15%) whose initiative is considred to be successful.

At the end of the day, conversion of your existing applications to a SaaS model will be governed more by your organization's will to change and the vendor's desire to keep you as a customer, than any technological breakthroughs.

This would be the first avenue I would pursue as it is usually easier to work within an existing framework with a known entity.

That said if your vendor is unwilling to investigate the SaaS option, you will want to make the change to a new vendor now rather than later for a variety of reasons including the current vendor's long-term survivability prospects.

Related Articles
  How to implement a successful SaaS Model
  Software as a Service
  Applications in Cloud platforms
  Concept of Software-as-a–Service
  Web 2.0 and SaaS for Human Resource Managers

Article Tags: adjunct, aggressive move, case study, commonwealth of virginia, coupa, demand model, e procurement, emerging technology, infrastructures, interested organizations, maintenance contracts, necessary levels, profitability, revenue streams, saas, sap, sapphire, technological capabilities, worth reading, yes virginia



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