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Is SaaS going to replace on-site software?

HP recently launched HP Service Anywhere, a Software as a Service (Saas) IT Service Management (ITSM) platform. Unlike existing HP service management products, and on the heels of some of the IT industry’s hottest trends, Service Anywhere is only available as a service; you can’t install it on your own servers and run it yourself.


As a service management consultant, I see an increasing trend towards offering solutions as services that used to be products. Some software vendors – such as and Workday – have bet their whole business on SaaS.  To their credit, they’ve made disruptive changes, which don’t go unnoticed at HP.  And while these companies tend to overstate the imminent death of on-premise software for self-serving purposes, they nonetheless are pushing the envelope, which is to be commended.


So what’s behind this trend of offering what used to be products as services? What are the benefits of buying your service desk tool as a service, rather than simply buying the software and managing it yourself in the old way?


I suspect that the biggest benefit to customers is the fast time to implementation. Service Anywhere configuration is completely codeless; you can modify workflows, forms and tables without needing to employ teams of programmers. This will enable organizations to start creating value much faster than in a conventional environment, and should also mean that future upgrades are painless.


Other benefits of the SaaS approach include all the advantages of any cloud solution: scalability, flexibility, lower initial costs, and transfer of risks to the service provider. If you can buy the latest software solution for a simple per-user price with no need to take on your own support staff and no client requirement beyond a modern web browser, why would you do anything else?


So will we see a future where nobody offers software as a product? Or will SaaS and software products co-exist indefinitely?


I know that some vendors think that software will only be available as a service in the future, but I think there are some advantages to running your own software that mean we will always have a need for both. Organizations running highly sophisticated and customized ITSM solutions will probably not want to migrate to SaaS for a long time, if at all, and organizations on secure government sites may always choose to keep their software and data within their own security boundary. Maybe running on-premises software will be like running your own power station or postal service – a very rare situation for organizations with exceptional requirements, or maybe it will be more like having your own generators or internal post – something that is quite common in larger more sophisticated organizations.


What do you think? Is there a future for on-premise software, or do you see a future where all your software will be delivered as services from the cloud?


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Stuart Rance


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sureshgp | ‎12-04-2012 05:09 PM

Stuart , Interesting Post and very Relevant in the context today


In my opinion,  On-Premise Software would continue to exist irrespective of the  maturity towards SaaS Model for the following reasons


a) Data Privacy and  Security aspects have had a fair share at Customers board room that they will continue to play safe and gain Control


b) The ability to tailor it to the degree of appetite of the Client Organization cannot be matched with the SaaS Model


c) Cost Arbitrage  vs Value Proposition discussion have become increasingly important these days that certain Organizations still feel to leverage with the existing On-premise software for Benefit Realization. So In Principal, On-Premise Software cannot be discounted and will continue to have demand in the near future.


BTW, I heard SAW will also be available On-Premise not now but sometime in the future..


Stuart_Rance | ‎12-04-2012 05:32 PM



Thank you for your post. I do agree that there are many reasons why some organizations wish to retain on-premise software, but I think that the trend is towards SaaS, and in the long term there may be very few organizations that remain with on-premise software.


DavidWheable | ‎12-14-2012 11:50 AM

Very thought provoking piece, Stuart. I think we’re definitely heading to a future where IT integrates and manages a mosaic of cloud services. But there may be instances where SaaS is not the best choice, particularly if you are growing rapidly (you will not achieve economies of scale) or you are looking for something highly differentiating. 


I feel we are just at the start of an interesting time in our industry as the boundaries of the traditional software purchace model are pushed, broken and redefined.

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About the Author
I help clients use service management to create business value for themselves and their customers. I am a senior ITIL examiner and I have wr...

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