22/08/2014

By Julian Painter, CEO, Appura


Depending on which analyst report you read, the UK market for software as a service (SaaS) will be worth £500 million by 2015 [1], or will be part of a global SaaS industry worth $22 billion [2]. Either way, cloud-based business apps are here to stay. The issue faced by businesses today is not so much which cloud-based apps are available, or how many apps are enough, but how efficiently they manage them.

A recent report from Osterman Research investigated the productivity impact on small and medium-sized businesses (SMBs) that use multiple cloud services. The research found that the average company currently uses 14 SaaS applications and the average employee uses 5.5 SaaS-based business applications, with this figure predicted to double by 2016.

While cloud-based services are marketed on their ability to help SMBs to save operational costs and scale effectively, by providing 'pay as you go' access to enterprise-level applications, Osterman Research underlined a number of issues for SMBs.

When multiple applications and cloud service providers are used simultaneously, there are in fact too many SaaS-based applications for SMBs to manage effectively. SMBs are buying apps through multiple vendors, which results in them having to manage numerous support contracts and administrate numerous bills. A key productivity killer identified by Osterman Research is the need for multiple logins. When employees have too many login credentials to remember and manage, this encourages risky practices such shared logins and password re-use.

However, simply taking a consolidated application vendor approach for businesses will not directly address all these points, nor will it deliver 'best fit/best practice'. For example, employees may require a specific application that falls outside of the portfolio of the big SaaS vendors. A typical SMB might be using SaaS-based productivity tools such as Microsoft Office 365, storage from Mozy, customer relationship management (CRM) from Zoho or a finance package from Xero. As organisations increasingly move from on-premise to SaaS, employees prefer to have a choice of vendors and the latest applications, rather than being restricted to one or two suppliers' products.

Further security and app management complications are added by the expanding use of smart phones and tablets, which has led to users demanding a choice of access mechanisms to their business applications and not just being tied to a company-owned device.

In response to these SMB painpoints, Gartner has described the emergence of the "Cloud Services Brokerage" model to allow SMBs to gain the benefits of SaaS, without the old management and productivity headaches associated with on-premise apps.

Cloud services brokers act as business application and cloud service supermarkets, taking on the licencing and acquisition management tasks on behalf of end users and giving them a single portal where they can access all of their business apps. This model offers the following advantages to businesses that are trying to control SaaS application sprawl:
- Single point of procurement.
- Single point of management and administration.
- Single vendor relationship to manage.
- Single itemised bill, based upon consumption and use.
- Single support contract.
- Single sign on, including Two Factor Authentication (or 2FA) to all applications, saving time whilst delivering improved security through enhanced identity access management.
- Single consolidated report of employee application usage.

A cloud services broker can return control to smaller businesses so that they can operate the equivalent of an enterprise application store within the cloud: retaining full control over employees' app and data access. By providing employees with a single interface that delivers the full range of apps that they need to be most productive, SMBs can derive maximum benefit from the cloud, without relinquishing control, or squandering time on repetitive administration tasks.


References:

Pierre Audoin Consultants: "UK SMES to spend £500m on SaaS by 2015"
https://www.pac-online.com/uk-smes-spend-%C2%A3500m-saas-2015-press-release

Information Age: "Analyst firm increases its estimate for the SaaS market in 2015 to $22.1 billion.
http://www.information-age.com/technology/cloud-and-virtualisation/2095578/saas-will-be-$145bn-market-this-year---gartner

Forbes, "Death by 1000 apps: the truth behind cloud application ecosystems" http://www.forbes.com/sites/benkepes/2014/06/20/death-by-1000-apps-the-truth-behind-cloud-application-ecosystems/

Gartner: Benoit Lheuruex explains Cloud Services Brokerage http://www.gartner.com/technology/research/cloud-computing/report/cloud-services-brokerage.jsp