Inside-Out Software

HEATHER CLANCY

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Can be reached via e-mail at [email protected].

Their goal was to introduce me to the company’s brand-new CEO, Shinya Akamine, and update me on its corporate strategy for improving relations and processes between vendors and their channel partners. Unwittingly, perhaps, Akamine instead left me with several key observations about the role of software as a service (SaaS) that I feel compelled to share.

First, some background on Akamine’s background. His latest executive role was founder and CEO of Postini, the massive e-mail verification service, which handles somewhere in the neighborhood of 4 billion messages per week. He also was involved with Cygnus Solutions, the open-source company acquired in November 1999 by Red Hat, plus he’s got McKinsey credentials.

Akamine said it was BlueRoads’ decision to position its offering as a service that put him over the top about assuming the management reins at the company. In his mind, SaaS is the right story when three conditions exist. First, the data that makes the application in question valuable exists primarily outside the corporate firewall. Second, the value of the application or service rises in direct proportion to the number of users that decide to use it. And third, most of the data being exchanged is created and updated jointly in some collaborative fashion and therefore could benefit from management by a trusted third party.

I think many solution providers tend to think of SaaS as an either/or proposition. Certainly, it will require painful financial rationalization. But rather than dismissing SaaS developments out of hand as an untenable threat to your resale business, I’d suggest it’s time to sit back and think about what role a particular application will play for your customers in the future. The answer about whether SaaS is the right approach will lie in your client’s role within its unique ecosystem of customers and partners. On-premise applications will remain core for certain functions, but as more companies collaborate to survive, SaaS promises scalability and flexibility that cannot be ignored.

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Inside or out? The answer could guide your SaaS investment. HEATHER CLANCY, Editor at CRN, welcomes comments at [email protected].