Tuesday, September 16, 2008

Using an online interaction platform to drive SaaS usage in the enterprise

This post provides a view of how an online interaction platform might be used to drive usage of SaaS applications in the enterprise.

An enterprise online interaction platform (OIP) is an enabling platform for SaaS providers who are focussed on enterprise segment customers. The online interaction platform includes IT Services that support the whole of the SaaS lifecycle. The online interaction platform is delivered using the 'Platform-as-a-Service' (PaaS) model.

In parallel with SaaS, PaaS has evolved from its original incarnation as the application infrastructure platform (AIP) pioneered by a few brave application service providers (ASP) who entered the market around the turn of the century, to the current multi-tenant, on-demand model exemplified by Force.Com (SalesForce.Com) and characterised by developer APIs and availability of a sandbox exposing enabling-platform functionality such as single-sign-on and identity management, collaboration (web-conferencing, instant messaging, social networking, wikis, RSS feeds, blogs, and all manor of user generated multi-media content), document and content management, search and discovery, reporting and BI, workflow, and billing.

A key benefit of PaaS results from having collaboration and communication functionality built into the platform, which can be used throughout the supply chain to create high-value networks connecting users with communities that span the length and breadth of the SaaS value chain. The bringing together of these communities online has significantly compressed supply-chains across the whole of the enterprise application software eco-system, blurring the boundaries between supply and demand, producer and consumer. The resulting increase in the volume, frequency and quality of interactions across these communities can accelerate innovation, time to market, deployment, and adoption/usage of enterprise applications.

The economics of the PaaS provider are fairly straightforward. A substantial fixed-cost is associated with the capital expended on platform infrastructure; a relatively small incremental cost is associated with each tenant provisioned within the platform environment, and additional incremental costs are associated with the volume of transactions for each tenant. Income is dependent upon service usage by end users (probably subscription revenues in the enterprise space, but advertising revenues are also technically possible), and/or from platform tenants (3rd party application developers and ISVs).

In order to maximise ROI for the enterprise online interaction platform:
  • Relationships with ISVs need to be established to ensure that a rich portfolio of relevant and compelling applications is available for enterprise customers in vertical markets, supported by an accessible vibrant developer community
  • Joint go-to-market and other demand-side models need to be defined for working with network service providers, Telcos and other wanabee SaaS providers in order to promote SaaS to enterprise customers in defined vertical markets
  • Expenditure on platform infrastructure capacity should be aligned with the demand for platform services from tenants, customers and end-users (start very small and only add platform capacity when demand contractually committed). Initial integration with billing and ops systems should be minimal
  • Communities need to be developed, and managed, to increase the volume, frequency and quality of interactions within the platform eco-system, and the knowledge from these interactions should be used to innovate, improve, integrate, and increase usage
  • Customer implementations of the SaaS applications should be supported with a managed roll-out including some or all of the following value-added services:
    • Business case development and preparation, and planning for customer implementation
    • definition and management of benefits realisation
    • planning and management of integration with legacy on-premise applications
    • planning and management of data and content migration from legacy systems
    • provision of usage reporting for business intelligence and to inform decision making

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