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SaaS: Lack of IT Innovation Leading to Crisis?
Dave Girouard, Google’s general manager of enterprise business, warns of a crisis in IT. The “insane complexity” of technology causes many companies to spend 75-80% of their IT dollars maintaining existing systems.
The solution to budget-busting never-ending maintenance projects says Girouard is SaaS (software as a service). But there is still much aprehension towards SaaS that centers around security. Girouard argues that “information security, as critical as it is, needs to be taken care of by organizations who live and die by it, who invest the time, money, resources and staff.”
Google says that they want other companies to share in the on-line innovations that Google has came up with over the last eight years to help them grow into a $10 Billion company. Core to their current enterprise application strategy is “Google Apps“, a bundle that includes email, IM, a calendar and Web page design program. Google Apps is free for organizations with 25 or less people.
While convenience and freedom from IT infrastructure issues is a clear advantage of next generation Web 2.0 apps, SaaS providers like Google will need to go much much further before attracting medium and large businesses. One issue is that while the feature set of on-line tools is impressive and is improving on almost a daily basis, the experience and feature set still doesn’t match that of a thick client. And companies have major concerns about security, service-level agreements and training.
But that will change. And for some customers, the advantages of a SaaS model are already compelling. An interesting statistic is that IBM has 46,000 Lotus Notes Users, but the Economist, again quoting Girouard, says that tens of thousands of companies have already signed up for Google Apps — over a period of about five months.
One example is Arizona State Univeristy, last year 65,000 students switched the school’s email system to be powered by Google’s Apps for Education. These kinds of projects build mind share and momentum. SaaS and solutions like Google Apps are sure to continue to grow in popularity. And with powerful backers like Google of the SaaS delivery model, greater acceptance of SaaS should follow.
