SaaS = Silo'ed Applications as Services?

I am just back after presenting at "SaaSie" which is an Irish conference on software as a service. I like the name and enjoyed the conference which was run by Enterprise Ireland and was well attended. Overall I found the sessions well balanced and informative - however I did find one thing a bit disturbing...

Integration does not appear to be high on the list of concerns for many of the SaaS vendors that I met...... In my opinion this is a significant oversight and one which goes against my experience in dealing with organisations looking to offer services to customers.

You see Cape Clear have been selling to organisations that offer "services" to their customers since we were founded - customers like JP Morgan and Alliance Trusts offering financial trading "services", organisations like Pearson Education offering outsourced college registration "services" and organisations like Workday or Mr Ted offering software as a "service". All of these organisations share a common challenge - making sure that their "service" is accessible to customers who wish to use it - and all of these organisations have identified the need for an integration platform to facilitate that access.

The reason is very simple - if your "service" is going to be more than a standalone information silo then it needs to get data to and from customers on-premise applications and external service providers. This necessity requires you to overcome challenges such as:

• Finding a common tranport for data communication
• Finding a common syntax for data exchange
• Ensuring that sensitive data remains secure
  
• Ensuring the integrity of business transactions
  
• etc...

Failure to overcome these challenges severely limits the reach of your service and thus it's revenue potential.

There are a number of strategies SaaS vendors have proposed to overcome these issues - the most common of which is the implementation of an API (e.g. Web Services interface) to the service - if a customer wishes to integrate with the SaaS application all they need to do is to conform to the defined API. I have also dubbed this the "Henry Ford" strategy because if the customer will not or indeed cannot conform to this interface then they cannot be a customer - to paraphrase "the customer can use any interface as long as it is WSDL".

Unfortunately conformance is not always an viable option available for SaaS users - there are various reasons why they may not be able to conform to the interface the SaaS vendor prescribes - these include:

• •Control - the economic buyer in the customer organisation may not have sufficient say in the development of the systems which need to be implemented - e.g. how much control does a purchasing manager have over the ERP system? Some of the systems which need to be integrated may be external to the customer in the first place!
  
• •Skills - the customer may not be very integration or WS-savvy. If the SaaS implementation looks complicated the customer may just make do.
  
• •Cost - The initial cost of integration may reduce or eliminate the ROI from using the SaaS software.•

If the value proposition for your SaaS offering is so compelling that your customers will overcome these reasons for inertia then please leave your number - my investment broker will be in touch. If, on the other hand you must walk on dry land like the rest of us the integration problem is not just an issue for your customers - it is an issue for you as a SaaS vendor and one which should be a core concern.