How Fast Is the Road to SaaS?

Vendor would make it easier to migrate apps to hosted model

How quickly can the software industry migrate to a SaaS model? Managed hosting provider Savvis has rolled out a service that it hopes will speed up the process by helping independent software vendors offer their applications as a hosted service.

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The service allows software vendors to take a single-tenant application and offer it as a hosted service to multiple clients, says CTO Bryan Doerr. It is available first in the United States and the United Kingdom, and will be offered worldwide by the end of the year.

Savvis partnered with Parallels to use its Virtuozzo Containers virtualization software to offer the service. The product divides a server OS into individual containers, each of which is assigned to a vendor customer and hosts multiple instances of its application. Customers also use Parallels' Automation software for provisioning accounts, billing and linking to payment systems.

More and more end customers are turning to SaaS to reduce costs, putting pressure on software vendors to offer their applications as services. Customer relationship management has seen the widest uptake, with 15 percent of software revenue in 2007 coming from SaaS applications, according to Gartner. The fastest growing segments are for office suites and digital content creation tools, where SaaS revenue will roughly double on average each year from 2007 to 2011, Gartner says.

Some vendors have developed multitenant versions of their applications, which allow multiple end users to access a single instance of their software. Savvis hosts applications for some of those vendors, but the new service is for vendors that have yet to develop multitenant products. They don't need to rewrite applications to use the service, according to Doerr, and need only to bring it in and test it in the SaaS environment. "We think [vendors] will use this as a quick go-to-market [option] and eventually rewrite their application to be natively multitenant," Doerr says.

Savvis competes with other managed hosting providers such as AT&T and Terremark, SaaS hosting specialists such as OpSource and platform providers such as Salesforce.com and Microsoft.

Copyright © 2008 IDG Communications, Inc.

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