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Readers Write 8/20/08

August 20, 2008 Readers Write 2 Comments

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Software as a Service
By John Holton, President and CEO, SCI Solutions

jholton 

Software as a Service (SaaS) emerged with a new technology delivery (ASP) and a new business model (subscription) a little more than eight years ago. Since this time, SaaS has evolved from simple collaborative applications, such as e-mail aimed at small to medium businesses, to enterprise-wide systems (manufacturing, HR) utilized by Fortune 100 companies. A recent study by Goldman Sachs of more than 100 of large enterprises (including a number of prominent health systems) indicates that 55% of these companies currently utilize SaaS services for some of their IT needs.

One statistic highlights how far along the adoption curve SaaS has traveled: 10% of the companies currently have more than 25% of their applications being delivered via the SaaS model. A Saugatuck Technology survey reported that by 2012, "at least 40% of the mid to large companies will seriously evaluate SaaS-based ‘core’ financial systems of record.” In other words, they will rely on SaaS vendors for one of their most important IT applications.

Another area receiving increased attention is SaaS-supplied core IT infrastructure applications for a variety of system management services for desktop computers, servers, and mobile devices. SaaS is quickly moving from the confines of small business to being purveyors of mission-critical services to the enterprise.

Initially, large enterprises employing SaaS solutions were concerned with service levels, such as up-time reliability and software response time. Today, those concerns have been assuaged, with the SaaS vendors now focusing on interoperability with legacy on-premise software and compliance with the strict identity and access management requirements of large corporations (e.g. HIPAA). Enterprises moving forward with SaaS applications have benefited in a number of ways.

First, since SaaS vendors take responsibility for all aspects of software delivery, many IT departments have leveraged their internal resources by assigning increasingly more projects to SaaS vendors.

Second, because the SaaS vendors know their software intimately, installation and training is much faster with fewer problems than on-premise applications. Upgrades and services packs are installed almost immediately after general availability without being reliant on customer IT resources.

Third, since the business model is subscription-based without large upfront fees, capital can be utilized for other projects. The SaaS return on investment is almost immediate after go-live since the client receives benefits but has little capital invested.

Large corporations have had to adapt to SaaS realities that are different from their traditional on-premise experience. These adaptations include (a) limited control over the delivery of mission-critical applications; (b) less customization of software than they have had in the past;  (c) more vendor due diligence required before selection to insure compliance.

To continue their success, SaaS vendors will have to address enterprise expectations of customization, integration, and workflow. In addition to these challenges, unseating legacy vendor “stickiness” may prove difficult.

To date, successful SaaS companies began with the SaaS model and have not evolved from the traditional on-premise model. Traditional on-premise vendors have had difficulty with the SaaS model and its emphasis on rapid sales, installation, and training and software enhancement.

Saugatuck Technology predicts that by 2012, 50% of the SaaS companies will be pure plays and 50% will be today’s major players who started with traditional on-premise models (Microsoft, Oracle, SAP) that have re-positioned their businesses. This means major on-premise vendors will buy their way into the SaaS world. Expect significant consolidation within the current SaaS vendor community over the next several years.

Eight years after in inception, SaaS is a major component of successful IT management and a significant part of an enterprise’s cloud computing strategy (IT utilizing the Internet).

Siemens Layoffs
By Clinton Judd

Otis Day is wrong. The Soarian development layoffs are not because Soarian Financials is ready and stable. The truth is that Siemens is having trouble converting even single-hospital INVISION sites to Soarian, let alone multi-hospital or academic sites.

For example, Medicorp Health System has pushed their go-live back for at least the second time, for a total 11-month delay. The implementation will be about 27 months long if they hit their new go-live date.

My opinion, and this last comment is just an opinion, is that Siemens is looking to improve short-term results and continue to milk the INVISION product line, even if it means that Soarian development and adoption will slow. I don’t think Siemens really cares whether the sites use INVISION or Soarian — they basically get paid the same regardless (except for the one-time implementation and conversion fees).  If I were a Soarian customer, I’d be concerned.

The Problem with Meetings
By Richard Hell

Here is my thunk-the-head insight from attending hundreds of meetings.

The problem with meetings starts with the invitation list. You and everybody else looks to see who else will be there and how they rank among their fellow attendees. One of two strategies is chosen: either dominate the meeting because you’re the big dog or use the opportunity to impress everyone with the details they missed or the insight that only you could bring to the table. You were invited, so show you earned your chair. 

The only value managers can add is to question those who know their stuff, often without zero preparation. The engine that powers overheated gum-flapping is vast experience and intuition, not quiet diligence. It’s mental combat and it’s personal.

First meeting: horror of horrors, you’re not as uniquely brilliant as you thought. All the good ideas and smart conclusions have been taken by the other attendees. How dare they steal your brilliance? Now you have to challenge their thoughts as the quiet sage who has seen and done it all, or maybe make up a quick new tack right on the spot. Either way, you have to elbow into that limelight and show you deserve to be there. That means shooting down their ideas and furthering your own, all while self-importantly working the BlackBerry instead of paying attention to anyone else talking.

The big loser is the convener of the meeting. Instead of just validating the work already done, now there’s a rat’s nest of new concerns, options, and points of view. Everybody is engaged and empowered, although nobody wants to do any real work. Just looking smart in meetings is good enough. Losers do legwork.

So, the problem with meetings is meetings and the egos of those attending them. By definition, meetings ensure that broad viewpoints are represented. They also ensure that nobody gets anything done except ongoing posturing at the inevitable follow-up meetings. For managers who always pace the sidelines instead of influencing the game on the field, the conference room is its own battlefield.

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Currently there are "2 comments" on this Article:

  1. Saas – can you spell shared service???

    Nice article by John Holton. Good guy, good company. It’s nice to know that in my old age what my uncle (long gone ) said is still true. What goes around comes around!

    If SaaS is not just 1969 shared services revisited with new tech spin, then what makes it different? I think the next article on HIS Talk should be – ‘THE RETURN OF THE MAINFRAME’.

    Nice going John, keep up the good work.







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