Tuesday, October 9, 2007

Hey internal IT, you're a SaaS provider too

If you don't provide service to external users are you still a "Software as a Service" (SaaS) provider?

As the term SaaS becomes increasingly popular, I hear this question more and more. Here is my $0.02:

Yes. Saas is about the relationship between the service provider and the service consumer. The physical characteristics of service delivery are almost inconsequential.

In any SaaS relationship there is a service provider and a service consumer. In my opinion, the defining feature of SaaS is that the business contract between the two parties is the sole recourse the service consumer has to manage the service (aside from in-application config options). The service consumer has no hand in running or maintaining the service other than what they request via the contract.

Over the past few years there has been a major push inside enterprises towards being "service-oriented" (and ensuring clear lines of demarcation between business units and IT units). The end goal has always been for business users to be able to establish a business contract on which IT delivers a service. From the both the internal IT and end user point of view, SaaS is just another acronym on this service-oriented path on which they have already been traveling.

So internal IT, congratulations you're a SaaS provider too. In defining a SaaS world, focus on the relationships... physical characteristics of service delivery and who signs who's paycheck are just distractions.

2 comments:

Ben Kepes said...

so yes you're right in that the service-centric aspect is paramount and all else is just peripheral decisions. But you're wrong (in my belief) when you say that cloud based location isn't an important trait - I believe going forward t will become more and more so

Damon Edwards said...

"Cloud based location" is all about perspective.

From a business user's (SaaS consumer) point of view, all application services come from the "cloud".

From a service provider point-of-view, no matter if you are providing your service to people inside the same enterprise or outside of it, "cloud" is a made up term that describes a condition where your internal operations are hidden from your users. It means your users have no exposure to how you provide the service specified in the SaaS contract. It just works all the time (well, in theory at least).

So you are right, the cloud concept is an important one... but not because of the physical location of the cloud provider... but because of the relationship between provider and consumer it describes. And there is nothing that dictates that those two parties have to be inside separate corporate entities.