Software-as-a-service: accessing a global market

Enterprise Ireland's ebusinesslive.ie newsletter - March 25 2008
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The software-as-a-service (SaaS) model has become an increasingly viable way for companies to run their IT systems, and for Irish software developers to sell their products. The SaaS model involves the delivery of applications as a service over the internet rather than on a CD that has to be installed on the customer's server, network or PC.

The concept of SaaS was pioneered by US customer relationship management (CRM) software developer Salesforce.com in 1999 and has developed quickly since then. SaaS or 'on-demand' models are now used to deliver a wide range of software products, from accounts packages to word processors to video editors.

Customer advantages

Cork-based telecoms software business VoiceSage has developed a product under the SaaS model that allows clients to make automated telephone calls to their customers. VoiceSage's director of innovation, Paul Sweeney, said SaaS offers many advantages to customers.

"The typical benefits are speed of implementation and ability to buy IT as product," said Sweeney. "Why bother with an install when I can get everything I need, right now, and I know that it works? People are buying a pre-packaged benefit, that they can measure and experience quickly."


Companies using SaaS also encounter negligible in-house support costs, according to Sweeney. "A software-as-a-service solution will not need IT service support, so your IT guy does not need training and does not have one more piece of kit to support."

But before embarking down the SaaS route, you must ensure you have an IT set-up that allows you to take full advantage of the model. Companies using the internet to access an application must have fast, reliable and secure access, says Sweeney. "If you have heavy information or data crunching you may experience some delays. This can be frustrating to users, especially if you are looking to execute a trade or answer a live customer query. In some situations you may want to conduct a security audit. This is especially true if [you] are executing anything to do with credit cards."

Developing models

The SaaS model also makes increasing sense to software developers themselves. Sweeney says VoiceSage always planned to sell its products as a service. "SaaS was central to our whole vision right from the start. We knew that the trend for SaaS would take off."

VoiceSage's products are marketed as business problem-solvers, not as IT solutions. Sweeney says the SaaS model allows software companies to offer a flexible and adaptable product to customers. "We built the software to be pure SaaS, so it could be simply integrated with other systems. We also knew that the adoption cycles were likely to be more favourable for hosted solutions, and it scaled from a business point of view."

'iTunes' for business

As well as supplying the delivery method for SaaS products, the internet can also be used by Irish companies to market and sell their solutions. Last year Salesforce.com launched a service called AppExchange, which allows any company to sell online any SaaS product that is compatible with its CRM software.

"AppExchange is a lot like iTunes - it is a place where anyone can go and see if there is something they can use," says Colm Mulcahy, CEO of Saaspoint, an Irish company certified to deliver Salesforce.com solutions. "It is a very good place for people to go and identify applications they can simply download at a very low cost."

AppExchange only accepts applications compatible with Salesforce.com products, but Mulcahy said a wide range of applications are suitable, from billing software and business intelligence reporting solutions to project management applications. "Salesforce.com audits the application submitted to make sure it has the right standards and fits within their environment," he said.

Global window

According to Salesforce.com, there are currently around 800 applications available on AppExchange. Skype, Cisco and Google have all developed and uploaded applications to the platform. Saaspoint itself has three applications available on the platform, and Mulcahy says any Irish developer with a good product could compete with these IT giants on an equal footing.

"If you are a small software operation, with maybe one or two developers working on a particular application, and you publish it on the AppExchange, you have access to a global market," he says. "One of our applications - a timesheet and expense application called TimeTrack - is generating approximately 100 inquiries for us each month."

Once the application has been accepted and uploaded, anyone can access the software through the AppExchange portal. Customers typically download a free trial of the product, and then deal directly with the developer if they are interested in purchasing it. "There is a licence price per user and the customer will engage directly with the developers and pay them directly for the licenses they use," explains Mulcahy.

Last year, Saaspoint founder Frank McCracken told an Enterprise Ireland Summit in Dublin that SaaS represented both an opportunity and a threat to the Irish software sector. "The big barrier to international success has been the ability to distribute [software] globally. This problem can be solved by using internet platforms. Suddenly companies of any size, no matter how small, have access to a real platform for global distribution."