Is SaaS a realistic IT solution for the global manufacturer? 

Yes. 

I was first going to define what Software as a Service actually is. When I tried to find a clear concise definition I had trouble finding one covering all the possible deployment, payment, and support models.

This is what I came up with:

Software as a Service – A software application that is available exclusively for use through a web browser,  paid for using a pre-determined payment schedule based on predefined usage metrics negotiated with the SaaS provider, and supported by an entity that is not the end user or end business unit within an organization (regardless of where data is physically stored).

This is the Wikipedia entry for Software as a service.

This is what Oracle has determined SaaS to be.

Here is what PC Magazine has determined SaaS to be.

I encourage you to form your own definition and let me know what you come up with.
The major issues that have been communicated to me as reasons why manufacturing IT executives are hesitant or completely unwilling to place their priceless data inside an application almost completely under the control of a third party are as follows:

1. Security is by far the greatest concern, and it should be high on the list, it feels like almost monthly we hear about another data base breach at a major credit card processing firm or student medical information stolen from a university data center (Hackers steal UC Berkeley health  records). Unless you as an IT executive are confident your organization has security measures that are far superior to those commercially available, security should be knocked further down the list of concerns. We have all been using SaaS for many years to facilitate the business of moving actual money for years. Can you name a bank or Fortune 1000 manufacturer that does not use some sort of electronic tool to transfer money or process payments? The issue of security as related to SaaS should be thought of on a case by case scenario addressed individually with each provider you are considering sourcing your software from. This should be done before any contract is awarded prior to any data being placed on infrastructure outside your control. 
2. Availability aka uptime is also a major concern. If the data is not accessible all the time how can the business run? The answer to that is determined by the criticality of the data. You would be hard pressed to find an internally hosted application that has not experienced some sort of downtime, especially when you consider the volume of patching Microsoft performs. Aside from natural disasters or area wide network outages, downtime can be addressed through proper planning and effective communication between the service provider and the customer base. 
3. Cost cutting on hardware . . .  Depending on the type of master data being stored and the data model being used to store it there are many options for hardware configuration. Options like dedicated vs. shared server hosting models can be a huge factor in determining the cost to maintain a hosted SaaS solution. If the data is financial in type, then most certainly dedicated hardware should be used. On the other side of the servers if you are storing data like spare part information, most likely available without so much as configuring a password, why not utilize the cloud. When a hosted SaaS solution is implemented hardware, support, hosting is all moved into a usually reasonably low monthly payment.

Yes. If properly planned and properly implemented software as a service is a realistic solution to alleviate many issues with internally hosted and maintained applications.

Tags: linkedin, SaaS, Software as a Service

This entry was posted on Tuesday, May 19th, 2009 at 3:20 pm and is filed under Chris Roberts. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.