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I recently deployed a SaaS fully-hosted performance testing engagement on an upgraded SAP ECC 6.0 core. A great white paper at details their five major benefits of SaaS. “Regardless of what specific application you might be evaluating, you stand to benefit from SaaS in five major ways,” states the white paper.

Let’s explore each benefit and see if I profited from a remote, third party service instead of the traditional software license purchase.

1. Save money list several factors contribute to saving money with a service over an application install, including lowering IT costs, leverage economies of scale and the ability to pay as you go. Did I lower our IT costs with this engagement? Sure, by removing the landscape, hardware and overall implementation labor requirements I instead spent labor for about 1-1/4 people and tied up 5 PC’s for a total of 9 hours. Now to be honest, we did have 2-1/2 other SAP projects going at the same time which truly placed an “oblongata” of a roadblock for internal resources. Not to mention a large server migration project, this performance test requirement would have placed too costly of a burden on the resource infrastructure if it was an implementation over a service. Rather than a pay as you go approach, we opted for planned future engagements and locked in a two year discount. This way we control when and to a point how much of a service we need instead of paying a monthly subscription. Even though a monthly expense is easier to “hide” in a budget, it made more sense to plan single purchase requisitions and budget the small engagements as expense and the larger engagements as capital. Coming in at just over 12% of that of an implementation project, I guess I agree in the short term, we saved money…seven more to go.

2. Save time When measuring short term time, this one is clear and simple. I have estimated an implementation project would take eight months, but the SaaS engagement took three months. But wait, the service only accomplished 33% of what I would expect from an implementation, but it did deliver in 37% of the time. So if I do the math correctly by amortizing out just the service deliverables and labor, I did loose 9% of time: a pretty nominal cost in the short term. In the long run though, the time cost decreases as the planning time is significantly reduced each time the service is deployed. I guess I should factor in the time not saved in an implementation by infrastructure needs, but we can let the time remain on a happy path.

3. Focus technology budgets on competitive advantage, not infrastructure (Budget) I agree that we want and should focus our time, efforts and expenditures on our core business activities. Though push comes to shove, technology budgets will always need lines for managing hot packs, enhancements, patches and equipment. If not ours, then the SaaS companies…or will it be SaaS for SaaS? If your focus is quality, then can you make an argument that testing is a sub-process of your core business? When it comes to hardware and software comes not only supporting the infrastructure but also the long term purchasing activities. However, if the one installation is a single rain drop in a sea of installations, what’s one more server, software license? There are many examples where a service offers a competitive advantage, but it is a hard sell in this engagement. What we save in short term installation and training, we loose to no long term knowledge of the tool.

4. Gain immediate access to the latest innovations With a SaaS engagement, no need to worry about upgrading your software. To get the biggest bang for your buck, it is the SaaS company who will continually apply new releases or bear the cost of upgrading. Upgrades can be painful, even if technical in nature. But if there is new functionality in the new version, sometimes we just let it go by with an installation. Fortunately for us, a SaaS engagement may bring the latest and greatest in technology so they may maintain their competitive advantage.

5. Join a community of interest For a company like the one I work for, the traditional software license is the way to go. However, when the implementation installation is over, the vendor and all their knowledge walks out. I can see the argument that a community of interest is formed through SaaS subscribed services, but what of a fully-hosted service. If the vendor owns the license, completes the prep tasks and executes from a load farm, then what community did I just join? Well, I could site a better relationship with the vendor which the SaaS division may be just a very small piece of the vendor. The repetitive service engagement may be leverage for a long term agreement. Even though we regularly benchmark ourselves prior to any installation, a SaaS company is most likely in a better position to collect their experiences from other customer engagements and realize less turn over than the traditional implementation installation. With the exception of a few interviews and some marketing line cards, I do not feel like the “community of interest” is crossing the street with an apple pie. But I do have to comment that the vendors staff had a large community of their own to leverage, so I did benefit.

Summary Well, I’ve dissected some more than others, but let’s add up the score of the “five benefits” I achieved by going with a SaaS engagement over an implementation. Well use a scale of 1 to 5, five meaning I realized the benefit completely.

Save money 5 – At time when the resources are pulled in many directions, a quick and least costly option of a service worked out well.
Save time 4 – Again, we needed a hip-shot type project to shoe horn it into the rest of the global schedule.
Budget 2 – Yes, a small engagement fits nicely into many budgets, but since the hardware was “readily” available, I’ll score this item a little lower.
Innovation 4 – You betcha, even though we would have implemented with the latest version, we seldom upgrade with each release. Through SaaS, we can dictate latest release in our negotiations.
Community 3 – I have to be honest, the vendors knowledge base was vast, but I’m still waiting for the apple pie.

Overall, it was a good experience and we got exactly what we paid for in the little amount of time. If you have more free time on your hands, Business Week has an old article titled Software-as-a-Service Myths that I recommend reading prior to thinking about a SaaS engagement. There are many newer articles on this topic however this one in particular hit home from me. 

White paper: Five major benefits of SaaS

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