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August 23, 2006Software as a Service: Evolving from a Software Shop to a Service ProviderBy: Ahmar AbbasLed by the success of companies like Salesforce.com, the buzz around Software as a Service (SaaS) has been building over the past few years. More recently Microsoft, SAP, Oracle and other large software firms have started putting their weight – and their marketing effort behind the concept.The SaaS delivery model is rising from the rubble of the failure of the application service provider model of the mid and late nineties. While ASP’s took traditional shrinkwraped software and provided it as a hosted offering to customers, SaaS providers are developing software specifically for web-based delivery from centrally hosted location. Independent Software Vendors (ISV) that venture into the SaaS world have taken on two distinct sets of responsibilities. First, like a traditional software company, a SaaS vendor is responsible for continually delivering innovative and relevant software products. Second, the SaaS vendor is now also responsible for developing, managing and supporting the infrastructure that is used to provide the software to the end user, under a regime of demanding service levels agreements and associated penalties. Consider the burden that ISVs take on as they assume the role of a Service Provider: 24 x 7 x 365 Operational Monitoring and Management The entire technology stack – which includes servers, storage systems, databases and application, has to be monitored on a 24 x 7 basis. A technical team has to be established that has the depth and breadth to be able to handle issues and resolve them within system availability guarantees. Process expertise has to be developed to do incident management and problem resolution. Infrastructure Resiliency, Performance and Capacity Management Planning The delivery infrastructure has to be developed so that it is free of single points of failures. In many cases, this requires deploying clustered systems (databases, servers etc) that add further to the complexity of the managed systems. The entire technology infrastructure has to be periodically tested under various load and failure conditions. Appropriate fail-safe mechanisms have to be in place that so that when a failure happens, the infrastructure can support the expected load while operating in a degraded mode. Key capacity planning processes have to be put in place to determine infrastructure requirements as the number of end users increase as well as for any surge or episodic events that increase system utilization. Disaster Recovery and Business Continuity A technology infrastructure disaster recovery plan has to be developed and implemented. In many cases the entire infrastructure may have to be replicated in geographically distinct areas. Continuity plans for staff have to be in place as well. These have to be tested frequently and available for audit by discerning customers. Data Protection The technology infrastructure and processes have to take into account the fact that the systems contain very valuable and sensitive customer information. The burden is greater for the SaaS provider because substantial care has to be taken in architecting the application so that data can remain segregated between the various clients. Technical Support The technical support staff at a SaaS vendor must not only provide product focused support, but now also must address any system accessibility problems. The support team needs to be able to isolate problems that are network related versus those are actual product issues. Volume of support calls are higher and range of issues that need to be addressed is much broader for SaaS vendors. Given these challenges - how are ISVs evolving from being software shops to bona fide service providers? Many SaaS providers are choosing to entirely outsource the 24 x 7 infrastructure management and service delivery of their offering to third parties – while choosing to just write code. Some SaaS providers continue to have their internal IT organization manage the revenue generating infrastructure. Creative on-call coverage schedules are used as substitutes for live 24x7 support and monitoring. A limited few are taking the challenge head on and investing in the appropriate technology and human capital to really become top notch service providers. Instead of entirely outsourcing infrastructure management and service delivery they are looking at augmenting their operations with technical and process expertise from third party providers. As customers use the SaaS model for more of their mission critical applications a service disruption small or large will be painfully noticed. Over time customers will almost always choose SaaS providers that offer system stability even at the expense of losing some sought after feature. SaaS vendors that make service delivery a focus of their attention and truly embrace the notion that they are now in the service business and not in the software business, are bound to flourish. Ahmar Abbas is Senior Vice President, Global Infrastructure Management at Slashsupport Inc, a San Jose, CA firm with service delivery centers in Chennai, San Jose and Singapore. Prior to that he served as Vice President of the SaaS/Hosting division of e-learning firm Blackboard Inc. A veteran of leading companies on the East Coast and Silicon Valley, Abbas has also held senior management positions at ONI Systems, Zaffire Inc and UUNET Inc. He started his career at Salomon Brothers. He is the author/editor of Grid Computing: A Practical Guide to Technology and Applications (Delmar Thomson, 2004). 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