Editors:

I read your story, “SaaS Appeal,” with great interest, particularly as we at Informatica have been leading a charge into the Software as a Service (SaaS) market.

SaaS is a big thing. Nobody would have thought that Ford’s assembly line would make such a big change in the automobile industry. And that productivity gain for the provider resulted in big benefits for the customer: reliable, well-made cars available to the masses at an affordable price. Within a few years, virtually all cars were being made on an assembly line.

SaaS is the assembly line of software; SaaS companies pour 100% of their R&D into the next version of their software. They never worry about porting to other operating systems or hardware platforms. They never worry about back-porting bug fixes for customers that run old versions of the software. These companies pour 100% of their support into the current version of their software, and don’t need to maintain test labs for old versions or various operating system and hardware platforms. In short, their focus is on making what customers want, when they want it. SaaS providers also have a unique opportunity to know what their customers want because they deal with the customers directly. In fact, while working with customers who use SaaS actively, we found out that data fragmentation has been an ongoing challenge to these companies (particularly larger companies that adopt SaaS within a line of business).

Customers don’t buy SaaS products because they are delivered as SaaS any more than they buy cars because they were made on an assembly line. They’re not looking for flashy features and functions; they just want a car that works and needs less maintenance and tuning.

By adopting SaaS, customers are finding new challenges to making the most of their data. It’s up to the software vendors to understand those challenges and make the solutions attractive, affordable, and credible. On-premise software isn’t going away anytime soon, and it’s up to vendors to figure out how to ensure that no matter what a customer wants in terms of delivery mechanism, that the software will work, and work well. The most exciting part of the SaaS evolution is that now, “traditional” on-premise vendors, like Informatica, have an opportunity to gain a competitive edge by adopting SaaS strategies where it makes sense for their business and customers.

John Hegstrom

Director, Product Management

Informatica On Demand