<<From a SaaS delivery perspective, SOA is what separates the current generation of SaaS providers, epitomized by the likes of Salesforce.com and NetSuite.com, from the failed application service providers (ASPs) of the dot-com era. From a consumption perspective, you certainly don't require a SOA to use SaaS, but if you want to effectively mix and match external services with on-premise assets and services, SOA will make it possible to efficiently build, deploy and manage composite apps.
We explore the relationship between SaaS and SOA, two emerging approaches for delivering IT functionality, applications and end-to-end business processes. If you're thinking of using SaaS, look beyond the buzzwords and price points, and make sure there is the solid foundation of SOA; without it, there's little chance that service will scale and flexibly change with your needs. And if you're building or considering SOA within your enterprise, keep in mind that SaaS offerings (and lower-level services) will be crucial ingredients that will help you quickly deliver composite applications without getting bogged down in development. SAAS MINUS SOA EQUALS ASP Like SOA, SaaS is one of those white-hot buzzwords getting what might seem to be an inordinate amount of attention. After all, SaaS accounted for only 5 percent of the business software market in 2005, according to Gartner. That growth has analysts, investors, CIOs and enterprise architects taking notice: by 2011, Gartner expects 25 percent of business software to be delivered SaaS style--a 500-percent increase. Back when SaaS players were known as ASPs, they enjoyed a great deal of hype as well, but barriers to scalability, flexibility and, ultimately, profitability proved to be the undoing of many ASPs. "It boils down to whether you have a multitenant environment or not," says Philippe Vincent, a partner at Accenture who advises software vendors on the emerging SaaS market (see "Debriefing"). "The first-generation ASPs offered conventional software on demand in a single-tenant environment, and they didn't do too well. That's essentially outsourcing application management and maintenance and offering it on demand." In contrast, SOA-enabled SaaS providers can serve thousands or even tens of thousands of customers out of the same instance of the application, and their architectures and best practices enable them to scale, flexibly change and version the software in a very efficient way (Salesforce.com, for example, boasts it has nearly 25,000 customers and more than 500,000 subscribers). Be warned, however, that many of the thousands of lesser-known vendors now hopping on the SaaS bandwagon aren't building on the foundation of SOA. "SaaS vendors have to be able to offer something that is flexible enough to meet customer needs, but you can't do that efficiently without a very good SOA model," says Vincent. "If they don't have the flexibility to deliver the functionality you want, or if they can't integrate with you significantly faster than a classic on-premise piece of software could, odds are it's not real SaaS." Page 2 MAKE THE TRANSITION By some estimates, top SaaS vendors including Salesforce, NetSuite and RightNow currently account for some 80 percent of the total market (in terms of revenue and customers). SaaS wannabes with few customers face little pressure to invest their time and money in SOA, as buyers are much more interested in the classic benefits of subscription-based software: reducing application deployment and ownership cost, and accelerating time-to-benefit. In the short term, these vendors can deliver, but that gets harder and harder as the customer ranks swell and demands for scalability and flexibility mount. RiskMetrics Group is making the transition to SOA to better serve the more than 650 customers that subscribe to its financial-risk-analysis software. Its customers are typically large banks, insurance companies, asset managers and hedge funds that load portfolio information into the application to track exposure to defaults and market volatility. "Once we have our SOA in place, we'll be creating many different configurations, both in the user interface and on the processing side, based on customer requirements," says Paul Schmitter, RiskMetrics' head of process management. "SOA will enable us to scale and put together different combinations of our services." As a service provider, it's no coincidence that RiskMetrics is also a SaaS consumer. The company switched from conventional CRM software to Salesforce.com nearly three years ago, and Schmitter says the company's SOA will enable it to better integrate Salesforce with both its on-premise Epicor accounting system and customer-facing information systems (see "Field Report"). Page 3 MASH IT UP Delivering applications over the Internet is certainly nothing new. WebEx, for one, has offered its online meeting application since 1996, but over the years it has improved and expanded upon its core applications as infrastructure, bandwidth, browsers and Web development approaches have evolved. For years, WebEx has offered integrations that let users launch meetings from within CRM applications, Office documents and other applications using a standard service API. But customers also want to be able to do the reverse: start with Web-based collaboration but then tap into critical information within the enterprise. Taking advantage of Web services, WebEx recently introduced WebEx Connect with an eye toward integrating internal resources into its collaborative applications. "What we're trying to do is create a new class of collaborative composite application," says David Knight, a vice president overseeing the new offering. "SOA is a key enabler in doing that because it lets us bring external data sources into our collaborative environment and build new business-to-business micro apps." In a bid-and-proposal scenario, for example, a sales manager could connect with his sales team and partners, then tap into pertinent data and documents within the enterprise. To work on the pricing proposal, the manager could create a composite form that could pull in underlying cost information from SAP and list-price information from the CRM system. The manager could then play with the discount percentage, calculate the gross margin and automatically update the approval workflow based on rules on margin thresholds. "We can dip into systems in a variety of ways through a browser-based form builder that operates on Web services interfaces [using WSDL]," Knight says. "Previously, I would have needed line-of-sight access to the databases and hand-coded SQL to retrieve the data, but now I can simply drag-and-drop those sources onto the form." Web services have helped SaaS vendors solve the problems of integrating with on-premise systems and data sources. The challenges will get a bit more complicated, however, as oraganizations build "enterprise mashups" that will mix and match a variety of on-premise and on-demand services. "It's a challenge just doing composite apps inside the firewall," says Gartner analyst Robert Desisto. "When you bring SaaS into the picture, if I have five different service providers, that's five different points where I'll have to worry about uptime; I'll have five separate service level agreements, and I won't necessarily have control over releases and versioning." While the question for today for many enterprises is whether or not to use SaaS, Desisto says many firms will be "pushing the envelope" of composite deployment within three to five years.>> You can read this article in full at: http://www.intelligententerprise.com/showArticle.jhtml?articleID=194500397 Gervas
