The Benefits of the All-SaaS Shop: Money, Application Integration, and Did We Mention Money?

While many companies have dabbled with adopting software as a service, one CIO at an open-source database vendor has taken the plunge. "On premise" software applications have become a thing of the past.

Doug Harr has some views that might make on-premise software vendors shiver. As CIO of open-source database vendor Ingres, he's already predisposed towards cheaper alternatives (such as open source) rather than proprietary technology. With that in mind, Harr has embraced software as a service (SaaS) wholeheartedly. The company has added 10 SaaS apps to Ingres's internal technology portfolio during the past two and a half years.

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Harr says the obvious benefits of SaaS adoption are cost and maintenance. However, he discovered, the ease of SaaS application integration is another selling point often overlooked by IT departments and their CIOs. At this point, Harr says, close to 100 percent of his critical enterprise applications are SaaS or open-source based.

"When we started, we raised some eyebrows and drew a few chuckles," Harr says. "But [SaaS] has worked and saved money. The on-premise model really is dead and it's the wrong direction to go."

Ingres was spun off from Computer Associates back in 2005. In a way, the company was starting anew, and as such Harr wasn't beholden to any particular software model. He could choose what software he wanted and how he wanted to deliver it.

With other executives at Ingres, he stressed the importance of easy maintenance and cheaper costs compared to on-premise software, and he says they quickly agreed with him. So he set about planning his technology architecture, which in some ways isn't entirely different than on premise software, Harr explains. You need to think about each department, what their technology needs are, and how best to create bridges so that those systems can talk with one another efficiently.

Where the fundamental difference lies, he says, is that the SaaS model allows you to shop for "best of breed" offerings: software that focuses on doing one thing very well. Most SaaS vendors don't rely as much on making themselves a one stop shop for all IT needs like traditional vendors. "I prefer a [SaaS] company that says, 'we know a type of automation, we do it well, and that's what we focus on,'" Harr says.

Won't this lead to a bunch of disparate applications, except now in a Web browser instead of a desktop environment? Harr says it won't, provided you plan carefully and make sure that the provider has built its applications on open standards.

"Good SaaS companies have built their apps on a Web-services based architecture," he says. "It's less proprietary, and as such it's easier for SaaS apps to share data with one another."

As an example, for Ingres's sales and marketing needs, Ingres uses Salesforce.com, the CRM software often credited with kicking off the enterprise SaaS movement,. They also needed an app that dealt with financials, and he picked Intacct because the two applications talked well with one another. For instance, Harr explained, when you're ready to launch a sales order in Salesforce.com, the end user has a window that opens up and allows her to punch financial data in Intacct.

Harr looks for such features when he chooses software for Ingres and its IT group. "We give preference to companies that can provide that kind of integration, with tools that were built with these kinds of integrations in mind," he says.

Other notable SaaS apps Ingres adopted include ADP for his human resources and xactly for sales performance management, all of which he said brought integration to the table.

Harr won't disclose specific dollar amounts on what he's saved from implementing SaaS with its "per user per month/year" rates, but says he has estimated what it would have cost to install the equilvalent software on premise. Based on his experience, he says, the purchase and installation would cost more than using a SaaS app for five years.

His advice for CIOs?

"Get on the bus and be part of the solution," he says. "I read a Forrester report recently that said departments are going around IT and implementing SaaS without them. I find that sad. Maybe it's due to the fact IT held all the cards back in the 90s and they told [rather than asked] departments what software they'd use. But now I think it's wrong to go completely in the other direction to say a department is just going to get these tools and not have IT involved. You need to have a partnership."

Copyright © 2008 IDG Communications, Inc.

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