Well, at least some software has moved beyond the firewall. It seems like only last year the debates were raging about the safety and security of hosting data and applications on platforms that were not under the lock and key control of the enterprise. Today, that debate has substantially moderated.

Kerr puts it this way. "While the SaaS concept has been around for quite some time, it seems to us that it began to become popular among the CRM applications.  In my opinion, driven mostly by two things;
1. The need for remote access by field personnel.  Nothing a company could support internally could have the reach and portability of the Internet, and
2. The commonality of business process across companies in their approach to sales."

What is interesting in these numbers is that there has been a significant shift toward the acceptance of outside-the-firewall applications over the last 2 years. Some of this change in attitude may be due to the advantages of SaaS based products with respect to costs, both of initial deployment and ongoing support and maintenance. Companies faced with the need to expand their supply chain connections in a financially demanding economy tend to look for options that offer no or low upfront costs. When compared to installed software applications, SaaS based applications require less infrastructure in terms of servers and software, and typically require fewer employees to manage the systems - also meaning lower ongoing expenses.

One surprizing finding from our survey is the relative comfort reported with regard to different types of SaaS applications. Our expectation was that because one of the pioneering SaaS applications, Salesforce.com, is highly regarded in general, the category of Sales and Marketing applications would receive a high rating when asked “What is your level of comfort regarding the use of SaaS based solutions?“ However, responses indicate that only 15% use SaaS based Sales and Marketing applications “As much as possible.”

A correspondingly different result emerged in our poll for SaaS based EDI systems, where 28% of respondents indicated they were using SaaS based EDI systems “as much as possible.” This relatively higher use reflects the shift in attitude Kerr expressed.

 

Kerr's explanation from his own experience goes this way, "We've found that things are loosening up in this area of the market as SaaS providers are able to demonstrate data security through SAS 70 certification.  So companies are becoming more open to entertaining the idea of a hosted solution.  Truth be known, many of the smaller companies could not pass SAS 70 certification based on being able to handle just their own data.  So as the SaaS services improve, they may actually be offering customers what amounts to an upgrade in how secure their data is."

As the supply chain systems providers continue to increase their connectivity with trading partners around the globe, and as the demands for real time visibility increase, the advantages of SaaS based systems that can easily connect, store, analyze, and report is likely to show their importance.