2009
SAAS (Software As a Service)
Any real business value or just a fad?
One of the latest terms for marketers to get hold of this year has been “The Cloud” or
“Software as a Service”. We ask the questions is this just a myth?, does it actually exist
and how could it help your company.
Aranxa Technology
1/1/2009
Aranxa Group White Paper Software as a Service – Any Real Business benefit?
About The Author
John Courtney, contributes to a number of UK and
International organizations as an independent IT
Strategist and Consultant. With over 25 years
experience in technology, he has worked at every
level on the international IT Stage. Having been
awarded the Sunday Times New Media Internet
award, in 1997, John has spent much of the last 10
years contributing to internet technology innovations,
and applying them to business. John holds associate
positions in a number of organizations, assisting in
internet, Web Database, and web 2.0 strategies. In
the late 1980’s , while being educated in Devon, John
wrote and commercialized a number of Computer
Games and utilities, and was an original pioneer of
first computer games market.
Business Brief Page 2
Aranxa Group White Paper Software as a Service – Any Real Business benefit?
Introduction
One of the latest terms for marketers to get hold of this year has been “The Cloud” or “Software as a Service”.
We ask the question, is this just a myth? Does it actually exist and if so how could it help your company?
The Cloud is not new...Oh no, it may surprise you but it’s been around since the first search engines evolved
during the dark years of the nineties. In fact it existed before the famous hyped Y2K Bug. The Cloud or
Software as a service (SAAS), is something you or your business demands and are served at a given time. Think
of a search engine if you can remember back that far, AtlaVista, eXcite, Yahoo or even Google, these are all
services which you demand and they respond! The Cloud provides you the service on demand, as and when
you want to use or pay for it – self service, well almost! For far too long, business information providers have
received a bad name in the industry, it is slow, expensive, and rarely does what you want and you seem to
have to pay a fortune. Well this will change over the next 5 years and suppliers who still rake in super large
revenues, will not continue unless they change. The upsurge and adoption of open platform and open source
solutions, means the consumers are now starting to be empowered to make their own decisions.
Business examples of SaaS
The Cloud or Software as a service, provides an on demand service to customers, freeing the consumer of the
cost of massive infrastructure.
Aranxa’s CuroERP, the Online ERP and Workflow Enterprise Solution ‐ aimed at the Small and Medium verticals
for Publishing, Private Healthcare, Professional Service Organisations, Trading and Logistic companies ‐ is
further developing its international market penetration by using Cloud Technologies to distribute its support
and education for its products range.
YouTube, Google’s biggest investment to date, needs very little introduction. It shot to fame, almost overnight,
when Google acquired it in Oct 2006 for an estimated $1.65B. We all know that watching a film, is easier and
more entertaining than sometimes reading the book. YouTube, have captivated the world with its ease of use
to add your own videos and has discovered a new form of entertainment. But the real reason YouTube, is so
important, is that it commands our attention, and therefore the big advertisers budget.
Using advanced technologies such as YouTube, users can self educate and resolve many of their own problems
themselves. Initially CuroERP released 3 introductory videos outlining the richness and ease of use of the
CuroERP system itself.
Within the current economic climate, costs of distributing traditional product information material using
standard methods can become prohibitive, so using YouTube as a channel seems an obvious and simple
solution. YouTube gain by getting yet even more unique content, while in the case of CuroERP, the customer is
getting something informative, focused and straight to the point.
Why spend 100% of your Business IT Costs and receive only 30% of its benefit. There are 168 hours in a
calendar week, but most business, including SMEs utilizes such servers only for 40 hours per week?
In the fast paced complex business environment, we find a new category of business called virtual enterprises.
Virtual enterprises orchestrate multiple services and makes new kind of products or services. Customers feel
the new virtual enterprise as a single product or service provider. But the reality is there are many parties
involved in the service provision. Each party is responsible for specific service like logistics.
Virtual enterprises require integration of systems of various parties. This integration is done via web services
and the systems expose their service to the outside environment by implementing web services. Consumer of
web service is another system in the client environment.
While web services allow systems to integrate, some service provisions can be done through the direct use of
the system by users of client location. This described model is called Software as a Service model (SaaS). On
the other hand SaaS is a software development method. The SaaS realized software need to be able to manage
Business Brief Page 3
Aranxa Group White Paper Software as a Service – Any Real Business benefit?
various customer parties within the same system without any collision (especially information). This model
essentially has very extensive extendibility requirements as the business grows.
The CuroERP Cloud
The latest incarnation of Aranxa’s CuroERP is now available as an on demand software as a service model. On
demand computing, now widely known as Software As a Service (SaaS), provides businesses with the obvious
benefits of moving a large capital fixed cost, to a lesser but more frequent variable cost. With massive
improvements in interconnecting business, the internet can now reasonably provide speeds of delivery to a
user, on demand. This equates to savings as instead of, for example buying and installing the complete
Microsoft Office despite the actual use of the full Microsoft Suite is relatively low on a day to day basis. A user
can access relevant functionality as and when the requirement arises.
With the SaaS approach, Aranxa has now added a revolutionary twist to their tried and tested CuroERP
Enterprise Resource Planning model. The new approach attempts to provide sizable economies of scale to
small and medium scale businesses and CuroERP Cloud delivers effective vertical solutions for Book Publishers,
Healthcare and Service Industries as well as traditional business.
Aranxa Group is providing access to a feature rich, full blown sales and business management solution up and
running instantly for as little as £100 per user per calendar month. The self service data import wizard,
provides full online guidance to load your own data, including customers details, products and existing
financial transactions, based on a template. In an increasingly bold move, Aranxa offer their services in a
similar fashion to mobile telephone services, with inclusive transactions and top up available monthly.
Why Software as a Service? Accessibility to SME
Though the enhancements in the hardware and software technology can bring exclusive benefits to businesses
in terms of automation, accuracy and speed, the cost is not affordable to many small and medium scale
businesses. The SaaS model considerably breaks this barrier by reducing cost. On the other hand SMEs can
expect more quality service than the traditional software implementation methods. Further it isolates the
business from various technical concerns like security, middleware, maintenance etc. In addition it reduces the
risk of investment in large infrastructure and costs.
Business Brief Page 4
Aranxa Group White Paper Software as a Service – Any Real Business benefit?
Integrating Valuable Business Domain Expertise to Business
Generally the software service provider has incorporated proven, accepted methods and processes of the
relevant domain into their software service as a value addition and most of the time they possess specialized
knowledge in their area (e.g. Logistics, HR). This is beneficial to the customer as it makes the business more
methodological.
Support for mobile computing
Mobility is becoming an essential feature of computing. SaaS model fits mobile computing models well as the
heavy business logic resides in the server cloud and there is no new kind of communication protocols or client
side software involved.
Software Costs
Since the software resides on the cloud in the service provider’s side, there is no need of purchasing license as
the business expands (number of PCs increases). Service level agreement will be used instead.
Isolating Upgrades
Patches, version upgrades, feature enhancements are done in a centralized environment and it is reflected in
all the customer sites. This eliminates the need to download patches and upgrade each machine.
Timely Nature
Today we talk about a concept called real‐time enterprise where you cannot wait years to implement a
software solution in the enterprise. In SaaS we find very short implementation timeframes when compared
with traditional implementation methods. Virtualization has become essential to the SaaS model by providing
easy manageability and the extendibility through consolidated servers.
What Empowers SaaS?
SaaS has its own extendibility and manageability requirements. Furthermore, a software service alone is not
much beneficial. It should have ability to integrate with various legacy systems and also with other software
services. Following sections describes how it has realized these characteristics.
The word cloud has used to abstract the big picture of server space. It isolates the user from dealing with
complex technology infrastructure details. Extendibility is also a component of this infrastructure.
The cloud will host many applications of various parties in virtually isolated manner and it will automatically
allocate resources for each application according to the demand. The customers of the cloud are billed
according to the utilization of resources. This may include application up time, utilization of processing power,
memory and bandwidth. Today the many server clouds are powered by virtualization technology.
Virtualization
Virtualization supports SaaS in terms of extendibility and manageability. In computing the term virtualization
has broader forms like application virtualization, storage virtualization (e.g. RAID), desktop virtualization,
hardware virtualization (virtual CD drives), cluster computing, grid computing and platform virtualization.
Among these the platform virtualization is the most amazing.
Business Brief Page 5
Aranxa Group White Paper Software as a Service – Any Real Business benefit?
Simply put, virtualization can be described as simulating implementation of a computer, on top of some
(other) physical implementation by using a piece of software. For example, platform virtualization allows to
implement multiple operating systems (guest operating systems) running simultaneously on a PC (physical
machine) running a normal operating system (Host OS). Here the host operating system and guest operating
system need not to be same operating system or different operating system from the same vender. For
example if you are simulating an intel x86 platform as a virtual machine environment on top of Microsoft
Windows using a product like VMware Workstation, you can run Solaris and various Linux distributions (x86
compliant) on top of that. Still the guest OS will have implementations of network interfaces, disk drives, IP
addresses, memory etc.
Presently the virtualization is among the most discussed topics in the past few years. Furthermore the
microprocessor manufactures, server manufactures, and operating systems developers/companies are actively
involved in developing their products with specialized support for virtualization. For example Microsoft has
developed their Windows 7 operating system with special focus to implement virtual environment by
operating system kernel level by partitioning the windows kernel (core of the OS).
What is Virtualization?
Manageability
In virtualization the guest OS take the shape of a slave of the host OS. So it allows users to control the guest OS
through the host OS. For example, you can monitor the guest OS resource consumptions while booting. Or you
can define priority of various virtual machines. You can also control resource consumption of guest OS. You
can even pause the OS temporally and resume later. Some virtualization software products allow porting the
virtual machine to another physical machine on the network on the fly, without interrupting the execution of
virtual machine.
Extendibility
Server consolidation makes your systems easily extendable. It isolates your application from the low level
server connection details.
Reducing cost
In the traditional approach of using physical machines, servers are dedicated to various applications. This
makes large stack of servers with high overheads. According to Tony Iams, companies average use of physical
servers are only from 15% ‐ 20%1. This is waste of electricity, physical space, maintenance cost, initial
investment and HR.
Virtualization allows server consolidation. So applications are not bound to a particular server(s). They can
expand among the consolidated servers according to their required capacity at that particular time. This allows
efficient use of server power.
Pay as you go
Virtualization has made the “pay as you go” concept feasible by server consolidation.
Portability
When maintaining physical servers, the virtual machines can be ported to some other physical server and the
original server can be shut down without interrupting virtual machines. This makes 24X7 concept feasible.
Business Brief Page 6
Aranxa Group White Paper Software as a Service – Any Real Business benefit?
Going Green
Virtualization supports power and space serving through the efficient use of consolidated servers reducing
energy consumption. It may also reduce the need of replacing servers due to that legacy servers can add some
capacity to consolidation.
XML and XML Based Standards
XML is a platform independent technology for presenting structured information. It also addresses
requirements of validating given XML information against particular rules (schema), incorporating multiple
vocabularies (namespaces), navigation within the XML documents (XPath), pointing to locations of document
(XPointer), querying XML data (XQuery), transforming XML documents to another format (XSLT).
Various organizations are involved in defining XML based standards for business data. (e.g. Logistic). This
makes integration of systems easy since all shares common language. This helps SaaS to ingrate with other
systems.
Web Services
Web services technology empowers SaaS in terms of ability to integration. Once the software service exposes
the relevant functionality as a web service, another interested authorized party can consume it.
The main characteristic of web service is platform independence. For example your service provider and
consumer may use totally deferent technologies like Microsoft .NET Framework and Javatm.
A set of specifications like WSDL, UDDI, SOAP isolates integrators from low level technical, business and
security issues.
Reference:
1: http://searchdatacenter.techtarget.com/sDefinition/0,,sid80_gci1070272,00.html January 16, 2009
Business Brief Page 7