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CIOs Discuss SaaS Challenges And Rewards

Software as a Service (SaaS) has many benefits for enterprises, including lower capital costs vs. deploying enterprise software, faster feature upgrades, and fewer operational burdens. But SaaS is not free of problems or risks, as a panel of SaaS-savvy CIOs can testify. Integration of on-premises software and SaaS applications, integration with partners, responsibility for security, managing multiple SaaS vendors and evolving SaaS standards are just some of the challenges raised by CIOs speaking at SaaScon 2010, a two-day conference held this week in Santa Clara, California.

"The biggest surprise was that it wasn't as complex and complicated as I thought it was going to be," says John Lake, director of information services at Panasas, a developer of high-performance storage solutions. Lake described how Panasas move from Siebel Systems' on-premises CRM application to The challenge was how to integrate data from one of its manufacturing partners into the new SaaS system. Lake says integration with partners can be a challenge because you don't have control over their IT systems as much as you do your own or even those of your SaaS providers. To integrate with partners requires you to be a good "bridge architect," he says.

"If that bridge is the Golden Gate and I'm the mayor of San Francisco, I've got to make sure I have a pretty good relationship with the Mayor of Sausalito ... to keep that bridge up and running and that they maintain their end of the bridge," Lake says. That means staying in touch with partners on their application development strategy. Worried that Panasas would have to "code from the ground up" a means of integrating data, it turned to a company called Boomi, which provides an integration platform-as-a-service between cloud and on-premises systems.

Companies also need to judge SaaS providers on performance issues such as latency and availability of the application, because end-users will judge IT, says Todd Pierce, CIO of biotech firm Genetech. "At the end of the day, the end-user is holding me accountable and my department," says Pierce. "So really being able to understand where [SaaS applications] are breaking down, where the performance issues are is important. Be prepared for that."

One thing fundamentally different about SaaS versus on-premises software is how closely tied the SaaS vendor is to the customer, says David Smoley, CIO of contract manufacturer Flextronics. When a company buys a license for packaged software, it can be largely on its own regarding installation, configuration, integration, security and ongoing management. However, a SaaS vendor is more dependent on how well the application works in your enterprise. Flextronics juggles multiple SaaS vendors such as Workday, Service Now, Amazon's Elastic Compute Cloud, and Microsoft's Azure, a cloud-based server operating system. "When you're talking to a SaaS vendor, your security is their security. Their guy is thinking about that 24/7," Smoley says. "To me the beauty of the SaaS model is that the SaaS companies' interests are in line with my company's interests."