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The SAAS market is poised for strong growth through 2011, when worldwide revenue is expected to reach $11.5 billion. The rapid expansion of software as a service and the sheer number of companies touting their SAAS hosting capabilities is making it harder for application service providers to identify the right hosting provider.
As the next waves of SAAS approach, the right hosting provider should be able to provide world-class managed hosting support, as well as cutting-edge features such as end-to-end software development capabilities and cloud-based platforms. A willingness to act as a consultative partner to effectively address the changing needs of users is also an essential quality of the right hosting provider.
The following five tips will provide a starting point to help you more thoroughly evaluate and select the hosting service that will be the best fit, culturally and technically, with your business.
Tip No. 1: Select a hosting company that has widespread expertise in running a standard, global enterprise infrastructure.
Many companies, particularly broad service providers, are introducing SAAS offerings to capitalize on the buzz surrounding this software model. A number of brands in the telecommunications and software industries, as well as online retailers and search engines, claim to have SAAS capabilities. However, their existing infrastructure may not be able to handle every individual customer’s unique SAAS needs.
Undoubtedly, your hosting provider must have a reputation for successfully implementing hosted services. It also must be focused on addressing specific SAAS requirements, including capacity planning, compliance, visibility and new technology integration. In short, SAAS should be a natural extension of the host’s core business and expertise-not just a loose grouping of services packaged together to capitalize on the SAAS trend.
Tip No. 2: Find a SAAS hosting provider that will work with you to understand your specific SAAS requirements, helping your business and your brand grow.
Managed hosting companies have arrived at effective processes for developing, delivering and refining many of the essential elements of SAAS. As a result, ASPs and their customers now expect these capabilities-such as security, SLAs (service-level agreements), scalability, consistent uptime and rapid system response time-to be built in to the standard SAAS infrastructure offering.
Although a high-performing technological infrastructure is critically important to your ability to develop and sustain long-term business success, today’s frequent shifts in SAAS technology also require consultative assessment services to help facilitate your transition to a SAAS model and effectively manage business changes that may follow. Thus, when evaluating hosting providers, look for one with the tools to operate a SAAS application reliably and a willingness to help your business grow. This includes assisting with a go-to-market strategy and providing access to global markets.
The right hosting provider can also help extend your brand by offering additional avenues for growth, such as partnering with you to create clearly differentiated solutions, developing services that increase marketing and integration options, and granting access to its customer base, which gives you greater exposure to additional opportunities.
Reliable Hosting Services and SAAS Implementation
Tip No. 3: Ensure that your hosting provider can provide rock-solid hosting services and will handle all facets of your SAAS implementation.
As an ASP, you may want to save costs and avoid the perceived complexities of dealing with third-party vendors by hosting and managing your SAAS infrastructure internally. What you may not realize is that this approach detracts from your core capabilities-developing unique software solutions to meet a specific business need. And it provides no additional value to your users.
Despite these consequences, relinquishing control and shifting the technical implementation and management to a hosting provider can be daunting. You can alleviate some concerns about the transition by verifying that your potential host not only has a solid reputation as a managed hosting provider, but also possesses the expertise and capabilities to deliver the promised SAAS experience.
First and foremost, it should have ownership over essential, high-quality SAAS assets, including data center facilities, networks and other IT components. Additionally, the host should be able to demonstrate that it has established vendor relationships and service agreements already in place, offer performance SLA monitoring to cover critical elements of service (such as network performance and response times), and provide comprehensive security credentials. The ideal hosting candidate should also have a professional services team and 24/7, reliable and dedicated support to assist with any technical issues.
Finding a trusted, highly capable hosting provider will help free you from the responsibility of managing your SAAS infrastructure. Furthermore, it will enable you to focus on software and application development, thereby creating greater value for your users and differentiating you from the competition.
Tip No. 4: Select a hosting provider that has a wide network of partners to provide the right resources and greater choice.
Be wary of hosting providers that claim they can single-handedly solve all your SAAS problems. Many say they can get to know your entire software package, which is nearly impossible. Others tout their ability to address a customer’s every requirement or preference, which is difficult because these needs are not universal and are highly variable. Further, they may not have deep knowledge or expertise in new or highly specialized areas.
Successful SAAS implementation is about delivering on promises, not just making them. Your hosting provider should have an extended and growing network of alliances that can offer a highly differentiated suite of enablement capabilities, from multitenancy and application firewalling to software life-cycle development services, as well as unanticipated or emerging services as needed.
The Next Evolution of SAAS
Tip No. 5: Partner with a hosting provider that is looking and thinking ahead to the next evolution of SAAS.
The SAAS model has unfolded in stages over the past few years. Currently, the industry is in the midst of Wave Three, which is expected to continue through 2014. During this time, SAAS will develop into a more mature business model as a focus on basic capabilities (such as uptime and rapid system response time) gives way to broader functionality. Customization, integration, data sharing, content management and APIs will promote more ubiquitous adoption of SAAS technology and will lead to workflow-enabled business transformation. By 2014, the SAAS model will likely change to adapt to the rise of on-demand infrastructure.
These progressions will happen quickly and will require you to make significant modifications to your infrastructure. One of the key factors enabling these major and rapid changes is the strength of your hosting provider. As you begin to shape or continue to refine your SAAS offering, you should regularly evaluate whether your hosting provider has the physical and technical resources to anticipate and address future SAAS delivery challenges that your business could face. Additionally, the provider should understand how to package, price and promote profitable managed services.
Selecting a hosting company that has widespread and established credibility in running a standard global enterprise infrastructure is essential to ensuring smooth and successful transitions across the various waves of SAAS implementation.