One of the nagging worries that has many companies on the fence about software-as-a-service is security. Many of those who are interested in the cost savings and business flexibility of SaaS still struggle with the idea of entrusting sensitive data to an outsider, even a well-established SaaS provider with a good reputation.
Appliances offer a possible solution, as IT Business Edge blogger Art Cole wrote last week, since they allow companies to enjoy SaaS advantages while maintaining local control of their data.
He cites a Forbes article in which author Dan Woods suggests that it would make a lot of sense for Google to roll out an e-mail appliance similar to its search appliance. Industry pundits are also speculating that Microsoft will develop a SQL Server-based appliance using technology acquired from DATAllegro.
Anyway, Art's post resonated with me because I'd recently had a discussion with Jeff Kaplan, managing director of IT consultancy THINKStrategies, in which he shared a similar take on what he believes will become a common SaaS model. Rather than the blend of traditional on-premise and multi-tenant SaaS that I wrote about in September, Kaplan sees SaaS appliances as one of the most interesting developments in the near future. He told me:
Today when we talk about a hybrid approach, we talk about traditional single-instance on-premise applications in combination with a multi-tenant service. But I think the definition of hybrid will change. The new definition will be a multi-tenant service offering that I might select to acquire in an appliance form factor. So I have a packaged app that can be hosted on my site, behind my firewall, but connected to the cloud so a vendor can continuously maintain and update it on my behalf.
It's an interesting thought, albeit one that didn't make it into the article for which I interviewed Kaplan. It's about three companies that run all or most of their businesses on SaaS, and I think (shameless self-promotion!) it's a pretty interesting read.
My favorite insight of Kaplan's that did make it into the article: Don't become so focused on functionality that you ignore the underlying business processes and SaaS' ability to change them for the better.