Hybrid SaaS Approach Is Likely Way to Go


I addressed one of the most common bugaboos about software-as-a-service -- concerns over its integration capabilities -- in yesterday's post, citing users who say integration isn't a big issue because of the Web-services based architectures upon which many SaaS vendors have built their applications. Their good advice: Grill vendors about integration during the vetting process.


Integration was one of the concerns mentioned by SMBs that Forrester Research surveyed about SaaS earlier this year. Other issues were total cost of ownership, security, impact on application performance, lack of customization, complicated pricing models and difficulty finding the desired applications. Most of these same factors also show up on a list of SaaS concerns among larger companies.


This isn't exactly news. Over and over again, we've heard about these same worries slowing broader adoption of SaaS. And they aren't going to go away. Which is why a number of folks, including ZDNet's Joshua Greenbaum, believe that a hybrid approach incorporating both SaaS and traditional on-premise delivery models will ultimately prevail. (Sorry, Marc Benioff, the rumors of traditional software's death have been greatly exaggerated.)


Customers always want choice, Greenbaum insists. Vendors who offer both SaaS and on-premise applications -- much like Microsoft and SAP hope to -- can better offer their customers the kind of customization capabilities and control over data and processes that SaaS pureplays cannot, writes Greenbaum.


I couldn't agree more. In fact, earlier this year I opined that SAP should focus on offering online tools or services that would extend the capabilities of its on-premise software, something of interest to companies of all sizes.


Rightly or wrongly, plenty of folks just aren't quite comfortable putting sensitive data in the cloud. That's why, writes Greenbaum, smart SaaS vendors "will have a hybrid offering precisely to capture these customers and either convert them when they see the light or keep them from going to the competition."


A hybrid approach, which is inherently more flexible than a traditional suite of on-premise software, lets customers have their customization cake, eat it too and, heck, maybe even get the recipe. They can customize apps to their hearts' content, in instances in which customization lends a strategic benefit, while opting for a less costly and complicated straight SaaS model elsewhere.