Saas Predictions for 2014

News of hybrid SaaS, PaaS and happier customers is all on tap

By Chris Kanaracus
Mon, December 23, 2013

IDG News Service (Boston Bureau) — While the bulk of enterprise software is still deployed on-premises, SaaS (software as a service) continues to undergo rapid growth. Gartner has said the total market will top $22 billion through 2015, up from more than $14 billion in 2012.

The SaaS market will likely see significant changes and new trends in 2014 as vendors jockey for competitive position and customers continue shifting their IT strategies toward the deployment model. Here's a look at some of the possibilities.

The matter of multitenancy: SaaS vendors such as Salesforce.com have long touted the benefits of multitenancy, a software architecture where many customers share a single application instance, with their information kept separate. Multitenancy allows vendors to patch and update many customers at once and get more mileage out of the underlying infrastructure, thereby cutting costs and easing management.

This year, however, other variations on multitenancy emerged, such as one offered by Oracle's new 12c database. An option for the release allows customers to host many "pluggable" databases within a single host database, an approach that Oracle says is more secure than the application-level multitenancy used by Salesforce.com and others.

Salesforce.com itself has made a shift away from its original definition of multitenancy. During November's Dreamforce conference, CEO Marc Benioff announced a partnership with Hewlett-Packard around a new "Superpod" option for large enterprises, wherein companies can have their own dedicated infrastructure inside Salesforce.com data centers based on HP's Converged Infrastructure hardware.

Some might say this approach has little distinction from traditional application hosting. Overall, in 2014 expect multitenancy to fade away as a major talking point for SaaS.

Hybrid SaaS: Oracle has made much of the fact its Fusion Applications could be deployed either on-premises or from its cloud, but due to the apparent complexity involved with the first option, most initial Fusion customers have chosen SaaS.

Still, concept of application code bases that are movable between the two deployment models could become more popular in 2014.

While there's no indication Salesforce.com will offer an on-premises option -- and indeed, such a thing seems almost inconceivable considering the company's "No Software" logo and marketing campaign around the convenience of SaaS -- the HP partnership is clearly meant to give big companies that still have jitters about traditional SaaS a happy medium.

As in all cases, customer demand will dictate SaaS vendors' next moves.

Geographic depth: It was no accident that Oracle co-President Mark Hurd mentioned during the company's recent earnings call that it now has 17 data centers around the world. Vendors want enterprise customers to know their SaaS offerings are built for disaster recovery and are broadly available.

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