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Impact of SaaS:
Drastic change of software industry

Cat: IT
Pub: 2007
#: 0718

Toru Maegawa

up 07201

Index
Why?
  • Prof. Toru Maegawa of Cyber Univ. delivered lecture about "Drastic change of software industry - the impact of SasS" at Glocom, Int'l Univ. of Japan in June, 2007.
  • I assisted this lecture as a moderator to promote active Q&A among the audience.
  • This lecture is the first one of four-series of topics about the controversial issues of software industry in Japan: 1) SaaS, 2) Offshore business, 3) Software engineers, and 4) OSS. The acronym of these four issues constitute "so-so", which will be so-so solutions for Japanese software industry.
  • サイバー大学の前川徹教授は2007年6月、国際大学グローコムで「激変するソフトウェア産業、SaaSのインパクト」の講演を行った。
  • 小生は、モデレータとしてこの講演を支援し、参加者からの活発なQ&Aを促した。
  • この講義は、現在の日本のソフトウェア産業の4つ課題の最初である。即ち、1) SasS 2) オフショア、3) ソフトウェア人材、4) そしてOSSである。これら4つの課題の頭文字は、SOSOとなる。これは日本のソフトウェア産業のそれなりの(so-so)の解決となるであろう。
Key phrase
キーフレーズ
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0. Latest news about SaaS:

  • 2006.10.10 Grovia Service announced a SasS solution named "GSInnovate" for M&S manufacturers. Glovia Service 中小製造業向けにGSInnovate発表
    2006.11.17 Miroku Jyoho Service disclosed business alliance with NetSuite-Japan. ミロク情報サービスが、米NetSuite日本法人との業務提携
    2006.12.11 Microsoft announced trial version of "Microsoft Office Live Beta - Japanese edition" MSは「Microsoft Office Live β日本語版」無償試験運用開始へ
    2006.12.25 Hitachi Consulting announced to use "Siebel CRM On Demand" of Oracle. 日立コンサルティングはオラクルの「Siebel CRM On Demand」を採用
    2007.1.10 Microsoft announced a SaaS model of "Dynamic CRM" scheduled to be released in Summer 2007. MSは、この夏リリース予定の「Dynamics CRM」をSaaSモデルでも提供へ
    2007.1.22 Success Factors announced a SaaS based employees management software named "Next Labs." 米Success Factorsが人事管理の「Next Labs」を発表
    2007.1.22 Kana Software announced to offer a SaaS based knowledge management software named "Kana IQ." 米Kana Softwareは「Kana IQ」をSaaSで提供へ
    2007.1.26 Cutter Consortium proclaimed SaaS would be a big trend in 2007. 米Cutter Consortiumは、SaaSが2007年には一大勢力になるとレポート
    2007.2.7 Feedpath announced a SaaS based groupware software service named "feedpath Zebra" developed by Zimbra. Feedpathは、米Zimbraが開発したグループ「feedpath Zebra」としてSaaSで販売
    2007.2.8 Google announced a SaaS service for enterprises: Google Apps Premier Edition (Gmail, Docs&Spreadsheets, Calendar, Talk, Start Page, Page Creator). Google 企業向けSaaSを発表、Google Apps Premier Edition
    2007.2.27 Salesforce.com announced CRM specialized for financial service. Salesforce.comが金融業界に特化したCRMを発表
    2007.3.19 DTS announced a SaaS based groupware named "Bizca." DTSのSaaS型グループウェア「Bizca」発表
    2007.3.28 SaaS World Conference & Demo 2007 opened in Shinagawa, Tokyo. SaaS World Conference & Demo 2007 品川で開幕
    2007.4.9 Linden Lab, operator of "Second Life" announced to use Netsuite 「Second Life」を運営するLinden LabがNetsuiteの採用を発表
    2007.4.11 RWorks announced a SaaS based Web retrieval service named "QS Rainbow." RWorks、SaaS型Web検索サービス「QS Rainbow」を発表
    2007.4.16 Salesforce.com announced a SaaS based ECM (Enterprise Content Management). Salesforce.com、SaaS型ECMを発表
    2007.4.17 Symantic announced "Semantic Protection Network" as a platform of IT infrastructure for M&S. Symantecは、中小企業のITインフラ保護のプラットフォーム「Symantec Protection Network」を発表
    2007.4.19 Salesforce.com announced to be adopted by Japan Post. Salesforce.com、日本郵政公社の顧客情報管理に採用されたと発表
    2007.4.27 MPT and ASPIC Japan jointly established "ASP-SaaS Promotion Forum." 総務省とASPIC Japanは、共同で「ASP-SaaS普及促進協議会」を設立
    2007.5.14 Soliton Systems announced a SaaS based PC operation log analysis named "Info Trace - On Demand." Soliton Systemsは、PC操作ログ分析のSaaSサービス「Info Trace - On Demand」を発表
    2007.5.15 WebEx Commutations Japan announced a SaaS based groupware named "WebExOne." WebEx Communications Japanは、SaaS型グループウェア「WebExOne」を発表
    2007.5.16 Fujitsu announced a new network service platform named "FENICS II." 富士通は、新たなネットワークサービス・プラットフォームとして「FENICS II」を発表
    2007.5.16 IBM released a SaaS based Web application development tool named "Development Engagement Service (DevEngage)." IBMは、SaaS型Webアプリケーション開発ツール「Development Engagement Service (DevEngage)」をリリース
    2007.5.21

    Kaien System announced to supply a SaaS based SFA/CRM software named "BizMagic Series V3.2.4."

    カイエンシステムは、SaaS型のSFA/CRMソフト「BizMagicシリーズV3.2.4」を発表

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1. Difference between SaaS and SI business:

  • What is SaaS (Software as a Service): (Wikipedia)
    • SaaS is a software application delivery model where a software vendor develops a web-native software application and hosts and operates the application for use by its customers over the Internet.
    • Customers pay not for owning the software itself but for using it.
    • SaaS is replacing the earlier terms ASP (Application Service Provider), On Demand, and Utility computing.
  • User's viewpoint:
    • from possession to utilization
  • Vender's viewpoint:
    • from sales of a product to offer of a service.
    • Eg: sales of a drill -> service of making a hole.

1. SasSとSIビジネスとの違い:

  • SaaSとは: (Wikipedia)
    • SaaSはソフトウェア・アプリケーションのデリバリーモデルであって、ソフトウェアベンダはWebネイティブなアプリケーションを開発し、そのアプリケーションをホスト・サービスと運用を行う。ユーザはインターネットを通じてそれを利用する。
    • ユーザはそのソフトウェア自体を所有するのではなく、その使用に対して支払う。
    • SaaSは初期の用語であるASP、On Demand、あるはUtility computingを置き換えつつある。
  • ユーザの視点
    • 所有から利用へ
  • ベンダの視点
    • 商品の販売からサービスの提供へ
    • ドリルを売る→穴をあけるサービスの提供

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2. Status-quo of SaaS:

  • # of Customers& Subscribers of Salesforce.comn of SaaS and ASP:
    (Source: Salesforce.com HP. Jun. 2007)

salesforceco_customer

  • Number of SaaS Vendors: (Source: SaaS Showplace) :

saas_vendors

2. SaaS現状:

  • Salesforce.comの
    利用者数&ユーザ数
    (出典:Salesforce.com HP)
  • 米国の分野別SaaSベンダ数:
    (出典:SaaS Showplace)
  • SaaSとASPの違い:
    出典: IPAレポート, 2004.4
  • Cf: Difference of SaaS and ASP: (Source: IPA report)

saas_vsasp

 

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3. Various business applications of SaaS: (US & Japan)

Category
Supplier
Kind of services
Country
CRM Convio Online Constituent Relationship Management for NPO US
  RightNow CRM, SFA US
  Salesforce.com CRM; 27,100 clients worldwide. US
  SAP "SAP CRM" linked with R/3 US
  SAP-Japan "SAP CRM" linked with R/3 Japan
  Oracle-Japan Siebel CRM Japan
  RightNOw CRM (JP version) Japan
Collaboration Drecom Internal Blog System Japan
  Fujitsu Business System Internal Groupware Japan
  Lacras Multifunctional Workflow Japan
Accounting/FNC Digital Insight Online Financial services including banking & risk Management US
  Business Online Accounting for M&S; "Net de Kaikei"; 70,000 users Japan
  Risk Monster Risk Management Japan
HRM Authria Personal Management US
  Concur Travel expense management US
  Employease Personal Management US
  Kenexa Personal Management US
  Kronos Personal Management US
  Paychex Salary & Insurance Management US
  Pleopleclick Personal Management & Partner Management US
  Salary.com Salary Management, HRD US
  Softscape HR Management US
  Taleo HR Management US
  Ultimate Software HR Management US
  Synergy Employee & Part-time staff Management "Beit Master" Japan
ERP Glovia Service ERP for M&S manufacturer; "GSInnovate" US
  Asian Partners ERP for offshore development Japan
SCM Infomart Receive & Shipping Order Management for food market Japan
eCommerce Constant Contact Web-based e-Mail marketing service US
Vertical solution Arena Solutions PLM (Product Lifecycle Management) On Demand US
  Athenahealth Medical management service US
  Phase Forward Medical Management (Electronic Data Capture, Clinical Data Management) US
  Voicus PR, Public Relations Management US
 

e-Truck

Truck Allocation Management Japan
  Digi Japan

Label Control Management for fresh food; @LABEL

Japan
  Fujitsu 3D CAD Software "SolidMX" Japan
       
Integrated Netsuite ERP, CRM, eCommerce US
  Netsuite ERP, CRM, eCommerce (JP version)  
  NTT Data & Sekisui Integrated Business Systems Management "Skit" Japan
Desktop App Google Online Word processor, Spreadsheet, File sharing US
  Num Sum Online Spreadsheet US
  EditGrid Online Spreadsheet, Display of remote data US
  Dabble DB Online Database US
  Zoho Writer Online Word processor US
  iNetWord Online HTML editor US
  ajaxWrite Online Word processor for Firefox US
  Thumbstacks.com Online Presentation software for remote presentation US
  gOffice Online Office suite US & JP

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4. Pros & Cons of SaaS: (from Users' point of view)

Customers'
viewpoint
Pros
Cons
Cost Economical; at least the initial cost  
Time Shorter implementation  
Quality More customizable Less customizable
    Less linkage between applications?
ROA Improvement in ROA  
Risk Lower security risk Unease of outsourced dependency?
    Uncontrollable system & network trouble
Vendors' viewpoint    
Maintenance cost Lower maintenance cost  
Customer relation Continuous relationship with customers  
Sales amount Leveling of sales  
New value add Valued added information from services  
Risk   Penalty clause in SLA
    Security risk of customers' data
    Not less initial investment

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5. IT Commoditization : (Price destruction) ITcommoditization

  • Hardware cost reduction:
    • Downsizing in 1990s
    • Hardware cost down due to open systems
  • Network cost reduction:
    • Internet utilization
    • Standardization by IP network
  • Software cost reduction:
    • Proliferation of OSS
    • Cost down of proprietary software
      • Oct. 2005: Oracle Database XE (10g Express Edition); freeware
      • Dec. 2005: Microsoft SQL Server 2005 Express Edition; freeware
      • Jan. 2006: IBM DB2 Exress-C for developers; freeware
  • Software will not be depleted!

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6. overshootingPCuseOvershooting phenomenon:

  • Over capacity, over function, over specification of software, which has already overshot customers' requirement: Background: # of years of PC use:
    • Elongating trend of using years: from 3 to 5 or more years
    • No more frequent version-ups of software
  • Affinity of SaaS and OSS:
  • Customers need not consider in using SaaS:

6. オーバーシューティング現象:

  • SWの過剰性能、過剰機能、過剰品質

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7. Summary:

  1. SaaS is a kind of ASP, but the impact on the software production market could be different order of magnitude.
  2. Present major customers are front office applications or M&S corporations, but from now use of SaaS in mission critical applications or by large enterprises may increase.
  3. As software vendors, the merit of SaaS is substantially big, full-scale entry should be urged.

7. まとめ:

  1. SaaSは、ASPの一種だが、ソフトウェア産業(ソフトウェア生産)に与える影響は桁違い。
  2. 現在のSaaS利用はフロントオフィス業務や中小企業中心だが、今後は基幹業務や大企業での利用が増える可能性あり。
  3. ソフトウェアベンダとしても、SaaSのメリットは十分大きいので、本格的な参入を急ぐべき
Comment
  • Lecture at Glocom about SaaS issue was very timely and appropriate; which will be key issue of software industry of this year (2007)
  • グローコムでのSaaS問題の講義は非常にタイムリーで適切あった。これはソフトウェア業界にとって、今年2007年のキーの課題となろう。

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