Why Software As A Service (SaaS) Could Be Good For CIOs

The other day Frank Gens, a senior vice president of research at IDC (a sister company to CIO’s publisher), briefed a gaggle of CIO editors about software as a service (SaaS): the direction of the market (up, up, up!); the evolving target customer for the big vendors (small and medium-sized businesses, or SMBs); the drivers behind enterprise adoption (line-of-business executives, who are less timid about the software-as-a-service model than CIOs); what those executives are looking for (business value and business relevance, what else?); why CIOs should focus on SaaS now (“It gets your head out of the infrastructure and into the business,” said Gens) and the role of IT in the future enterprise.

“IT,” Gens concluded, “is the underwear for business services.”

Not very glamorous, is it, being in charge of the business’s skivvies? The CIO title, one might hope, would put one in a more exalted position. Maybe being in charge of the business’s ties or suit jackets. But, according to Gens, and according to our cover story, “The Truth About Software as a Service”, thinking of oneself as a provider of business services is a lot more promising—and leads to a brighter future for CIOs—than thinking of oneself as a bulwark and guardian of the enterprise’s infrastructure. That, CIOs seem to agree, is a career dead end.

Of course, one must be realistic. “The Truth About Software as a Service” does not buy in to the hype that any business function in any size enterprise can be handled through a SaaS delivery model—and, indeed, adoption rates, while growing, are still relatively low. “Don’t expect something unique. If you need everything customized, you won’t have success with SaaS,” says Lloyd Hohenstein, VP for finance, human resources, real estate and corporate communications at Schwab Technology. But then again, do you really need something unique? “No one’s going to care who you’re using for payroll or Web conferencing, or even office productivity applications,” says Martin Perry, CIO of IT staffing firm Sapphire Technologies.

What’s interesting to me is how quickly SaaS talk—IT talk about software and applications, integration and security—turns into business talk, talk about business processes and adding value to the enterprise.

That is the conversation CIOs need to have, and that, increasingly, is the conversation they are having. Are you?