Become Your Own SaaS Provider

Enterprises adopting private cloud should consider offering "private SaaS," a way to efficiently offer application services to their employees and partners.

Feyzi Fatehi

November 15, 2013

3 Min Read
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So much has been written about the rise of the public and private cloud that sometimes it can feel more like dense fog than a cloud. But there are still new and innovative ways the cloud can be put to use. One way is to enable "private SaaS": using cloud concepts to deliver software services within the enterprise and the extended enterprise.

While robust software-as-a-service (SaaS) offerings like pre-date the cloud, the technologies developed in cloud computing further allow SaaS to easily onboard and support users. This multi-tenant model, which treats members of different departments, business units, or groups as members of those distinct entities and allows unique rules, workflows, and requirements for each group, has become the heart of the SaaS business model.

Research from many industry and academic sources indicates that a great deal of the growth in cloud usage is being driven by SaaS, in which the customers can subscribe to applications “as a service” and avoid having to incur the capital expense and operational costs of running applications in-house. 

At the same time, many organizations are embracing the private cloud concept as a way to provide infrastructure that is a flexible alternative to traditional datacenter computing, or to provide an extra layer of security and governance that may not be available in the public cloud. Why shouldn't these private clouds also offer application services on a subscription basis to groups of enterprise users?

The SaaS business model needs to support operations and lifecycle activities that are part of the operations in many organizations, as well as SaaS-specific capabilities, including subscription management, monitoring, metering, reporting, tenant management, and billing. All these SaaS concepts can be applied to good effect in an enterprise environment.

Private SaaS benefits
One of the many benefits of a private SaaS implementation is the reduction in number of application instances to manage. The integration complexities and operations costs are also greatly reduced when compared to running many separate application instances for each geographic entity, dealership, or business unit -- which often happens in large enterprises. Private SaaS streamlines the operations needed to provide a software service with a high degree of autonomy for each member entity, while still leveraging a highly efficient and well managed shared infrastructure.

As large as those benefits are, they can be greatly expanded if the private SaaS model can be implemented for several applications, where the cost savings and consistency of infrastructure, operations, and management can be applied to a larger portion of the company's IT operations.

Private SaaS also allows IT to replace multiple application instances that may previously have been separated for security or privacy reasons. The multi-tenant ability of SaaS to securely manage and separate the data of different groups of users can result in a substantial reduction in infrastructure costs. In addition to the reduced direct cost of the infrastructure, an enterprise is also able to reduce costs for operations and management of many application instances.

Private SaaS enables enterprises to take advantage of the efficiencies of cloud economics and utility internally, or to their "extended enterprise" including vendors, customers, and supporting partners. Implementing private SaaS also empowers the CIO by enabling improved management oversight, governance, and insight on specific software usage and consistency in software version, operations, and integration across the organization.

Taken together, this means higher asset utilization and much lower cost of service delivery. CIOs can implement private SaaS to modernize and recast their current software application portfolios as profit centers based on business value, rather than as cost centers. And they can deliver those software services faster, with improved management, oversight, and control. 

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