Software-as-a-service is often pitched as a way for SMBs to gain access to applications they might not otherwise be able to afford, such as business intelligence.
But larger businesses are also using SaaS, sometimes as a way to supplement their on-premise deployments by filling niches that the traditional software doesn't adequately address.
That's exactly what Welch's did, as described in this Intelligent Enterprise article. Though Welch's uses a suite of Oracle BI and ERP software, it opted for an additional application from SaaS vendor Oco to get a better handle on its logistical data.
One of the application's biggest advantages, says Welch's director of purchasing and logistics, is the ability to expose data on a very granular level. Having identified customers whose orders rarely fill a truck, Welch's can try to help them adjust their ordering patterns to cut freight costs. Because Welch's learned many of its customers place orders on Fridays, it shifted its own shipments to other times in the week.
The article mentions that Oco leveraged its experience with Welch's to create transportation and logistics dashboards and reports for its new software geared toward suppliers of industrial products and packaged consumer goods.
As I read the article, I recalled that BlinkLogic's David Morris and Bill Stewart told me in an interview last month that some of their clients were interested in using BI to improve a specific business process and found SaaS a highly flexible way of doing so -- just as it sounds Welch's did. Said Stewart:
... now we're seeing larger enterprises more receptive to on-demand BI, and the SMBs are lagging a bit. I think that probably has to do with the reality that the major corporations have had to live with: They've already invested heavily in BI, but they are not getting the kinds of returns or the kinds of user adoption that they are looking for. They are saying, "We've built it, but they've not yet come." So they want an inexpensive way of empowering more users so they get the benefits of BI.
SaaS also gives companies the ability to more closely control their costs and to trial applications without committing to large on-premise deployments. Stewart said:
If you know that everything is locked down for the company or the department you are buying for, and there's not going to be any change for three years, then on-premise starts to make a bit more sense. But I think that everyone has learned is that there is a tremendous amount of volatility in the world, and you can't predict out three years. SaaS gives you tremendous flexibility and that notion that "I can buy one extra user at a time." Whereas, if I am buying on-premise, I have to buy in chunks.
BI consultant Rick Sherman makes some similar points on his The Data Doghouse blog. Though conventional wisdom is that suites from the likes of Oracle, SAP and IBM will dominate the BI market (and those companies all purchased BI specialists in the past year to flesh out their offerings), Sherman isn't so sure.
Microsoft didn't begin adding a lot of additional features -- and cost -- to its Office suite until the software was already ubiquitous, notes Sherman. In contrast, there is no single dominant BI vendor, and many users find BI software too costly and/or complex. Writes Sherman:
Companies are looking for BI and data integration software that provides the functionality they need but at a reasonable cost in terms of people, skills (both IT and business user), time and budget. The suites may be the most features packed offerings available in the market but that does not mean they are the best fit for everyone. These suites have not become pervasive for a key reason: too high a TCO (total cost of ownership). This provides a market opportunity for software vendors such as MicroStrategy, Actuate, SAS, Dimensional Insight, QlikTech, Information Builders, SAS and others. In addition, TCO is a prime driver for the interest being shown in open source and On-Demand (or SaaS software-as-a-Service) software offerings for BI and data integration.