Project And Portfolio Management Applications Get SaaS-y
And they are getting them, with the growing number of PPM applications being offered today on a Software-as-a-Service basis, making them easier to scale to a midsize company's needs and budget.
"We've seen a tremendous uptake in the on-demand business," said Jose Mora, senior director of product marketing at CA, which unveiled an "Essentials" version of its CA Clarity PPM On-Demand application in April that's easier to implement and is particularly suitable for midsize companies. CA is among a growing number of PPM software developers offering customers a greater range of hosted/on-demand PPM options.
Sales of CA's on-demand PPM applications have been growing by a factor of three with sales to both new customers and customers switching from on-premise software, Mora said. But SaaS still accounts for only about 15 percent to 20 percent of the company's PPM sales.
PPM company Planview, Austin, Texas, began offering a SaaS version of its portfolio management application in December, and that offering, combined with a hosted version of the vendor's software, also accounts for 15 percent to 20 percent of the company's sales, said Patrick Tickle, executive vice president of products. Compuware also provides a hosted version of its Changepoint PPM software.
All of this comes as the recession has had a mixed impact on demand for PPM applications, according to some of the leading PPM software vendors. Some companies have frozen or even slashed IT spending this year and that includes purchases of PPM software. But for others, the downturn has brought home the need to add PPM tools to their IT governance toolbox to help get their IT operations under control and reduce costs.
"It's sort of a double-edged sword," Planview's Tickle said.
"Project and portfolio management in this economy is very, very topical," said Bruce Randall, director of product marketing for PPM, Hewlett-Packard Software and Solutions. "Businesses and IT organizations are looking to reduce costs, but in a smart way. This is a product that a company can use to target the right cost reductions for them."
Strategies for effectively using PPM tools to manage enterprise projects and control IT costs will be among the major topics of discussion this week at Everything Channel's Project And Portfolio Management Summit in Garden Grove, Calif. Other items on the agenda for the three-day conference include the evolution of the project management office (PMO), how business process management practices can boost PPM results and the state of the PPM software market itself.
While SaaS is a popular delivery vehicle for some applications, notably customer relationship management, it's been slower to take off in other areas. But a Gartner report released earlier this month said sales of on-demand PPM are accelerating. "Small PPM budgets, a need for a fast PPM deployment and functions meeting immediate needs continue to drive the interest and need for SaaS-based PPM systems," the report said.
As with CRM and other kinds of software, SaaS lowers the risks of a PPM implementation because it doesn't require the financial commitment of an on-premise system, including license and maintenance fees and the need for investments in IT infrastructure. "For this and other reasons, SaaS IT PPM vendors are growing rapidly in customer count," the Gartner report said.
In January, Daptiv released the results of a Forrester Consulting study it commissioned that concluded the payback for using Daptiv's SaaS PPM applications was less than two months. Randall said PPM can help reduce a company's IT budget as much as 7 or 8 percent within a year.
Other emerging vendors making a name for themselves in the Saas PPM arena include Innotas, PowerSteering Software, AtTask and Genius Project.
Seth Patton, director of product marketing for Microsoft's Office Enterprise Project Management applications, said many businesses still prefer on-premise applications because they can be customized and more tightly integrated with other IT and line-of-business systems. He said the perception that on-premise applications may be more secure also is a driver. "It's still a relatively small part of our overall business and of the market," Patton said of Microsoft's hosted project management applications. "But interestingly, it has more than doubled in just the last year."
Customers for the hosted versions of Microsoft Project, Microsoft Project Server and Microsoft Project Portfolio Server (collectively known as Microsoft EPM) include midsize businesses and departments within large companies, Patton said. An example of the latter is Procter & Gamble, which has 500 Project Server users -- a number that will soon increase to 800. Microsoft has some 8,000 resellers for its EPM products and another 1,000 ISV and integration partners.
"We're seeing a significant trend toward the SaaS business or hosted model," agreed HP's Randall.
Beyond the rise of SaaS PPM applications, another trend is the growing use of PPM tools for project management tasks outside of IT. Microsoft's Patton said he's seeing growing use of PPM for managing research and development projects, product development operations and professional services. Other vendors are seeing some uptake in real estate, health care and financial services industries, use of PPM for managing complex grant application processes and growing use within specific line-of-business departments in big companies.
Vendors also have been taking advantage of the collaboration and content-sharing capabilities of Microsoft's popular SharePoint software by linking their PPM software to that platform. Not surprising, Microsoft has done that, redeveloping Project as a SharePoint application to tap into its search and document-sharing features. CA's Mora said CA plans to integrate CA Clarity with SharePoint to improve the PPM application's usability and adoption rate.
But the PPM software industry also has seen its share of vendor consolidation. In October, Oracle acquired Primavera Software, a developer of PPM software with a particular focus on the professional services automation market, for an undisclosed amount.