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The Future of Software Delivery: The opportunities and challenges of emerging software delivery models

Published by: Business Insights

Published: Feb. 4, 2009 - 132 Pages


Table of Contents


The Future of Software Delivery

Executive summary

New software delivery models

The changing IT landscape

Future opportunities

Managed application hosting

Pitfalls of new software delivery models

Vendor activity



Chapter 1 Introduction

What is this report about?

Who is this report for?

Definitions

Application service provider

Hosted applications

Managed application hosting

On-demand

On-demand subscription fees

On-premise applications

Service-oriented architecture (SOA)

Software as a service (SaaS)



Chapter 2 New software delivery models

Summary

Introduction

Software as a Service

Characteristics of SaaS

Ownership

Location

Payment

Tenancy

Growth in the SaaS market

The market opportunity

On-demand

Growth opportunities for on-demand

Application hosting

The ASP legacy

Outsourcing

Cloud computing

Web 2.0

Concluding thoughts



Chapter 3 The changing IT landscape

Summary

Introduction

How did IT come to be delivered as a service?

The next big thing

Disadvantages of the on-premise model

Cost

Implementation

Support and maintenance

The benefits of new software delivery models

Lower IT costs

More manageable costs

Familiar pricing model

Faster and easier implementation

Less software needed

Easier upgrades

Faster time to value

Greater access to new applications

Stronger ties between IT and business goals

Easier to manage

Scalability

Disaster recovery readiness



Chapter 4 Future opportunities

Summary

Introduction

CRM: the starting point for SaaS and on-demand

CRM market opportunity

Other application areas being delivered as a service

The ERP market opportunity

Business intelligence (BI)

Email

Others

Hardware as a service

Vertical opportunities

Financial services

The on-demand CRM market

Vendor spotlight

The benefits of SaaS for manufacturers

SaaS delivered technology can support a range of business processes

Go-to-market recommendations

Public sector

The on-demand CRM market

Higher education

Benefits of SaaS for institutions

Higher education processes suitable for SaaS delivery

SaaS in operation

Go-to-market recommendations

Communications

The on-demand CRM market

Utilities

The on-demand CRM market

Regional opportunities for on-demand CRM

North America

Europe, Middle East and Africa

Asia Pacific

Central and Latin America



Chapter 5 Managed application hosting

Summary

Introduction

Trends influencing the hosted application market

More applications to be delivered through managed hosting

Managed hosting is growing vertically and horizontally too

Services as competitive differentiation for managed application hosting providers

Growing costs could limit managed hosting providers

Expect virtualization to help alleviate rising data center costs

Being more efficient could boost green credentials too



Chapter 6 The pitfalls of new software delivery models

Summary

Introduction

Customer concerns about new delivery models

Security

Infrastructure

Service levels

Regulatory concerns

Lack of customization

Culture

Challenge out-dated perceptions

Be patient

Challenges for software providers

Architecture

Service levels

Customization

Cost

Customer support

Security

Overcoming barriers to adoption

Educating the market

More applications needed

Stay flexible

Promote on-demand and SOA as related concepts

Conclusions



Chapter 7 Vendor activity and effective strategies

Summary

Introduction

Competitive landscape

There are no clear leaders in the SaaS market

Different vendors carry multiple SaaS product lines

Vendor offerings

Software providers

New-breed on-demand vendors

Traditional enterprise application vendors

Infrastructure providers

Amazon

IBM

EMC

HP

Dell

Sun Microsystems

Capitalizing on the market opportunity

Key success factors for successful vendors

Amount of configuration options

Target and expand the right processes

Develop SMB specific functionality

Vendors should focus on a small number of key selling points

Provide SaaS delivery to applications in a modular, expanding fashion

Vendors need to continue to educate the market about issues such as security

Configuration, configuration, configuration should be the mantra of SaaS vendors



Index



List of Figures

Figure 3.1: The hidden costs of on-site deployments

Figure 3.2: Advantages of the SaaS and on-demand delivery models

Figure 4.3: Relative opportunities for SaaS within SCOR process groups

Figure 4.4: Perceived inhibitors to SaaS adoption within manufacturing companies

Figure 6.5: Challenges for software providers

Figure 7.6: Key success factors for successful vendors



List of Tables

Table 2.1: A comparison of on-premise and SaaS delivery models

Table 2.2: Features of the on-demand delivery model

Table 2.3: Distinguishing between hosted and SaaS applications

Table 4.4: The CRM vs on-demand CRM global market, 2004-2009 ($m)

Table 4.5: The ERP vs. on-demand ERP global market, 2004-2009 ($m)

Table 4.6: Deployment of different software delivery models in higher education institutions

Abstract

The Future of Software Delivery

The opportunities and challenges of emerging software delivery models

Report Overview

The way companies perceive and purchase their software is starting to change. Organizations no longer have to buy an on-premise application and host it on site, they can have it delivered on-demand, as a service or hosted by the software provider or a third party. But while these new models offer more choice in how they pay, receive and use applications, the proliferation of terms has led to some confusion amongst organizations about what they are and what they constitute. ‘The Future of Software Delivery: The opportunities and challenges of emerging software delivery models’ is a new report published by Business Insights that examines the market conditions that led to the emergence of these new models and the benefits they offer over traditional delivery types. This report also examines future market opportunities for software delivery models and how they may be extended to hardware platforms in the future.

Key Findings

The size of the on-demand CRM market will increase rapidly through 2009 to reach 27% of total market size as the CAGR for on-demand far exceeds that for the total CRM market.

There are signs that enterprises with revenue of more than $1bn are also adopting more SaaS (Software as a Service) applications. Originally some industry commentators predicted SaaS would not expand beyond SMBs into larger organizations.

A study by Triple Tree and the Software and Information Industry Association (SIIA) found that on-demand deployments were 50% to 90% faster, with a total cost of ownership five to ten times less than installed software.

The growth rates for on-demand CRM and ERP application markets are significantly higher than for the premise-based market. This is an indicator of the high levels of growth potential in the market.

Use this report to...

  • Identify and target future growth areas of on-demand CRM using this report’s analysis of new market opportunities by sizeband, vertical and region, as well as market forecasts for key sectors.
  • Understand the key issues in the software delivery market including vendor ecosystem, competitor offering and on-demand vs on-premise deployments.
  • Enhance your sales and marketing strategies with this report’s comparison of different vendor strategies and recommendations on improving your go-to-market strategy. • Assess emerging software delivery models with this report’s cost analysis of implementing software via different models.

Explore issues including...

On-demand is often used interchangeably with SaaS, but it’s also a bigger concept in its own right, referring to a new way for organizations to respond faster to customer demand, build new partnerships or react to market changes.

Vendor ecosystem. At the moment there is no single vendor leading the market for SaaS delivered solutions. Jostling for dominance in this market are traditional applications vendors, infrastructure vendors, pure play SaaS vendors and services providers.

SaaS in the enterprise. SaaS looks set to continue pervading the enterprise, whether through those application areas that suit Internet-based delivery, such as web conferencing and collaboration tools, to those that were previously considered as necessary to be kept behind the firewall: helpdesk, back-up software, word processing, spreadsheets, slideshows, content management and even supply chain management software.

Discover

  • What’s the difference between SaaS and traditional on-site implementations?
  • Will any of these alternative software models become the primary way that organisations buy software?
  • How is today’s hosting model different to the ill-fated ASP model of the 1990s?
  • Where does hosting fit in and how does it differ?
  • What are the limitations of these software delivery models?
  • Who are the leading vendors in this space? And is there a market leader yet?



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