-by Mark Settle, Chief Information Officer, BMC Software
2010 was a watershed year in the evolution of the Software as a Service (SaaS) industry. Worldwide sales of SaaS tools within the enterprise application software market exceeded $9B. The industry bellwether — Salesforce.com — continued to grow its revenue dramatically. A variety of IT research organizations predicted that by 2014 SaaS products would account for more than 40 percent of all new software sales. By any reasonable measure, SaaS is now considered to be an acceptable and, in some cases, a desirable means of supporting a company’s business operations.
SaaS is Here to Stay
SaaS tools were originally considered to be niche products, largely confined to the CRM (Customer Relationship Management) segment of a company’s application portfolio. SaaS products have matured considerably over the past ten years and are now available to suppor t back-office and mid-office operations as well. A variety of SaaS tools support human resources functions, such as recruiting, contingent worker management, performance management, succession planning, payroll and bonus administration, and so on. SaaS products have also expanded into procurement and financial management functions, supporting such activities as pricing, quoting, order processing, tax and tariff administration, and currency exchange operations. SaaS capabilities have even crept into the IT function. Several companies, including BMC Software, offer tools for service desk operations, project portfolio management, vendor contract management, budgeting and forecasting, and compliance administration that are specifically designed for IT organizations.
BMC’s IT organization has implemented at least one new SaaS application per quarter since the first calendar quarter of 2009. We have realized several benefits through large-scale adoption of SaaS tools. The hard benefits associated with SaaS are well known to all IT professionals. SaaS products are built, hosted, maintained, and operated by the SaaS vendor. This approach can absolve IT of responsibilities for hardware procurement and installation, availability and disaster recovery management, and application maintenance and development. This transfer of responsibilities has enabled us to reduce the size of our data center and achieve savings in hardware depreciation and maintenance, cooling requirements, power consumption, and operator support. In addition, we have been able to repurpose several members of our applications teams into business systems analyst roles since their former responsibilities for software coding and testing are now being performed by the SaaS vendors.
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