SaaS-delivered IT Service Management (ITSM) is rapidly on the rise, creating complications for its on-premise counterparts. The transition is affecting existing, on-premise players like BMC, which to compete, announced its own on-demand service last week.
Ovum’s Stephen Mann writes that the shift is evident in a number of announcements, including PepsiAmerica’s news that it is now a Service-now.com customer. Service-now.com is one of the leading vendors in the SaaS ITSM market.
“SaaS continues to gain much publicity and vendor backing, and a growing corporate acceptance as an immediate opportunity to quickly and flexibly deliver business-enabling IT services at a lower cost.”
SaaS-based ITSM models serve as a way for IT departments to work more efficiently under tight resource constraints.
Mann writes:
“A major benefit of SaaS for ITSM is that it is aimed directly at the heart of the now commonly overstretched IT function – scarce IT resources can be redirected away from internal IT systems to focus on the delivery of business-critical IT services. However, for many organisations the key benefit of SaaS is its simple, subscription-based pricing model – usually a cost per month (or year) per user that covers everything needed to operate, including support and maintenance. This provides a lower and consistent level of expenditure that is opex rather than a capex investment.”
This sector of the SaaS market is reflective of the overall difference between online and on-premise applications. Like any SaaS environment, the development cycles are far more frequent than on-premise applications. On average, a SaaS application will be upgraded several times a year, compared to on-premise tools that get updated every 12 to 18 months.
So it makes sense that a company like BMC would offer its own SaaS environment to compliment its own on-site offering.
But enterprise clients need to beware of what they are getting with any SaaS service. SaaS can be confusing when vendors make up their own definitions.
Mann says it well:
“A SaaS solution must be architected such that the customer is able to self-customise its ‘application instance’, with these customisations preserved through what should truly be an effortless upgrade process. Without these facilities, the SaaS business case is not so compelling.”
Expect on-premise vendors to push a hybrid approach. That might work for some enterprises but the cost efficiencies of a pure SaaS model will be hard to pass up for organizations working with limited resources.
