Organizations are seeking outsourced and hosted solutions

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Apr. 23, 2007

Overall, many organizations are no longer willing to tolerate the long deployment cycles, ongoing administrative hassles, high operating costs and low overall ROI associated with traditional on-premise software, according to new research conducted by the Cutter Consortium.

As a result of this, a growing number of companies are looking for outsourced and hosted solutions that offer comparable levels of functionality, but at a fraction of the overall cost.

Today's viable alternative to on-premise solutions, SaaS (Software as a Service) is expected to significantly increase for the next several years.

On average, the percentage of business software spending on SaaS will increase from 5 percent in 2005 to about 25 percent in about 4 years from now, according to various new studies done by industry analyst firms.

ASPs (Application Service Providers), the first companies to offer software via the Internet, hosted third-party applications in various data centers. At the time, the software had limited functionality and required expensive server installations.

Today, SaaS applications operate at much higher speeds and offer significantly greater capabilities because of breakthrough in technology and new programming developments such as Asynchronous JavaScript and XML (AJAX).

AJAX programming provides an intelligent and efficient approach to client/server interaction and enables automatic changes to content without requiring the full Web page to reload, allowing users to move rapidly between different areas of the application.

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Software ends up operating much like familiar desktop programs and provide similar functionality. For example, the improved interactivity and usability of the applications make it easy to conduct real-time actions, such as drag-and-drop, grab and scroll, and grab and zoom.

New advances in AJAX and other HTML standards, open source systems and the growing availability of open application program interfaces (APIs) have made it possible to develop and enhance SaaS more quickly and less expensively. SaaS providers now have greater customization and configuration capabilities.

Many solutions enable administrators to configure applications across the entire business, setting parameters that meet the company's particular requirements. Customization also allows resellers and systems integrators to add new fields, create new interfaces and succesfully integrate data from other software applications.

In the old days, integration used to be a challenge for SaaS applications and a deterrent for potential customers who needed the hosted program to integrate with their existing applications, databases and architectures.

Advanced integration middleware, service-oriented architectures and open APIs are making it easier to create connections between software systems. Many SaaS vendors now offer a variety of options, such as file and batch transfer, and provide a defined set of programming interfaces to make it easier for customers to integrate their SaaS and on-premise applications.

According to Jeffrey Kaplan, managing director of THINK Strategies, "the advent of AJAX and other de facto Internet-oriented application development standards has helped to accelerate the growth of the SaaS market by making it easier for users to implement and integrate on-demand software services."

Soon, an even wider array of service options and capabilities will become available as developers make further advances in programming technology.

Various experts even suggest that an increasing number of SaaS vendors will offer fully functioning offline versions of their AJAX-based services that synchronize with a user's online account when reconnected to the Web.

Kaplan suggests the growth of offline capabilities is a natural market evolution for SaaS solutions.

SaaS providers will also continue to focus on improving security, reliability and integration capabilities.

They will also enhance more features offered to end users. With current market penetration levels and expectations for growth, it's apparent that SaaS is asserting its position in the software industry, an affordable alternative that allows SMBs to break free of costly enterprise applications.

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Source: Web Services.org

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