Eight Insights on the True Value of SaaS
Cloud computing and SaaS bring so much more to the table than simple outsourcing.
Warning: Your eyes may glaze over at the next paragraph, particularly if you're a business user. That's a normal reaction to techno babble and marketing-speak. But stick with me, I promise this is going somewhere useful.
Cloud and SaaS vendors love to throw around the term "multi-tenant," and that's also true with those specializing in SaaS integration. I know what it means technically: It's a way to design software-aka, an architecture-so it runs on one server, but is used by multiple clients or tenants. You can read that on Wikipedia, for Pete's sake.
But I didn't really understand the business arguments. In fact, I was pretty dismissive of the term-I'd hear it and feel a bit uncomfortable, as if they told me something random, irrelevant and vaguely personal, like "I'm a Lutheran" or "I'm a lacto-ovo vegetarian."
It's built to be multitenant and easy to use and differentiated from the perspective of who can manage Informatica Cloud. The self-service interface and core performance of the engine runs transparent to the customer but the benefit is if you already have an Informatica solution in house you can support a hybrid implementation. Informatica Cloud allows users to build jobs in the on-premise environment and then run jobs in the cloud, which requires less technical staff involvement. IT can then focus on the more complex data integration efforts which truly require more technical skills.
Still, seeing that question was an embarrassment and a revelation for me. I can't believe in all my talks with companies bragging about their multi-tenant solutions I hadn't once thought to ask that.
In my defense, this became a big topic in niche tech sectors over the past year, and I've spent nine months of that time pregnant, which, for me, translates into a lot of sickness and the attention span of a very stupid dog.
There's no doubt Informatica has an impressive eat-your-own-dog-food story, which Ann All recently explored in "Are Growth-Oriented Companies More Likely to Use SaaS?" But other cloud and SaaS apps are part of that story, too, according to Informatica CIO Tony Young, who writes that Informatica's IT Apps team contributed 60 percent of its budget to innovation in 2009 and 2010-as opposed to the average 20 percent-thanks in large part to SaaS applications.
So, clearly, multi-tenant architecture has worked out well for Informatica and other SaaS vendors. But given that IDC says SaaS now is growing at six times the rate of on-premise software, I started wondering: What's in it for the rest of us?
In other words, does it matter to you, an end-user organization, how SaaS vendors build their apps? Is there any business benefit to it? Can it save money? And what about integration-how does it impact that?
Or is all this multi-tenant talk just marketing-speak?
I decided to do some digging. Although there are SaaS/cloud offerings that use a single-tenant (dedicated server) approach, many of the discussions I found focus more on why SaaS, as multi-tenant, is better or not better than on-premise, which tends to be single-tenant. That means most of the information written comes from mid-2010 or earlier, when vendors were still trying to sway businesses.
Still, much of the information still applies and I did find more general posts about multi-tenancy. What I've learned is that there are many pros, a few issues that can be cons and some surprising issues that are both. I'll share my findings Monday.