THINK IT Services

Salesforce.com, the poster-child of the software-as-a-service (SaaS) movement, experienced two periods of “intermittent access” of approximately three hours each on December 20.

While the company blamed the problems on an outside provider’s database cluster error in one of its four global nodes, this event frustrated the SaaS provider’s customers and could seriously hurt overall user confidence if it happens again anytime soon.

One of the primary reasons that web-enabled SaaS has gained user acceptance over the past year is because of the reliability of the various new services. Ease of implementation and use have certainly drawn users to SaaS solutions, but being able to access SaaS applications anytime/anywhere has been a key driver of customer adoption. Any suggestion that SaaS isn’t easy to access or readily available will significantly reduce its appeal.

Another hiccup at Salesforce.com will not only tarnish its reputation and standing as the SaaS market leader, but could fundamentally harm the SaaS market as a whole because users will wonder if the market leader’s issues are an indication of similar weaknesses among all SaaS providers.

On the other hand, many users are accustom to similar performance problems with traditional, onsite software applications. If Salesforce.com’s issues turn out to be a one-time event, it will still have a better track-record than a majority of enterprise datacenters.

And, given the issues occurred as many users were already winding down for the holidays, this episode could be quickly forgotten when people get back on track in the new year.

Software-as-a-Service (SaaS), managed services, service-oriented architectures (SOA), utility computing, hosting and offshore services are relatively new concepts that are already fundamentally changing how organizations operate and serve their customers.

At the same time, more traditional aspects of the IT service business are also gaining greater attention. For instance, Cisco Systems’ executives admitted that the depth of Scientific Atlanta’s systems integration skills was just as important as the quality of its Internet Protocol TV (IPTV) products when Cisco decided to acquire Scientific Atlanta in November 2005.

Wall Street is also recognizing the escalating value of IT services as exemplified by the acquisition of Affiliated Computer Services (ACS) just before Xmas by a consortium of private equity firms, following the lead of a similar investment group that acquired Sungard in June 2005.

These are trends that I’ve been commenting on in various trade publications for many years, and I’m now pleased to use this new forum to focus on these issues on an ongoing basis.

This blog is dedicated to tracking these trends, measuring their impact and offering insight and advice about how organizations can leverage these services and solution providers can deliver these new services profitably in an increasingly competitive environment.

I hope you find this blog interesting and valuable. I welcome your feedback and suggestions, as well as links and topics that you’d like to see added. You can learn more about THINKstrategies by visiting my website.