What You Don't Know About SaaS

The Trouble With Integration

Integrating SaaS applications with existing ones is another mind-twisting challenge.

Phil Newby, CIO at Barge Waggoner Summer & Cannon Inc., a $50-million architectural and engineering firm in Nashville, signed on for a computer-aided design (CAD) system from vendor Bentley Systems Inc. in 2002. By going with a subscription-based model, Newby avoided paying an up-front fee for a package without knowing the scope of usage. Since signing on with 140 end users, Newby has ramped up easily to 180. Yet he says the appeal of SaaS would be compromised if BWSC used a lot of third-party software that requires integration with its CAD system.

"If we had to do a lot of integration with a SaaS system, there would be upgrade issues," he says. "And every time you fix one problem, you create two more."

Integration and upgrades can be problematic, analysts say, primarily when traditional software vendors hang out a SaaS shingle without rebuilding their products with a SaaS-friendly architecture. "The first thing CIOs have to look at is how any SaaS system is truly architected," says Jeff Kaplan, a senior consultant at Cutter Consortium in Arlington, Mass. "Some vendors are still selling legacy apps but simply hosting them and offering them at a different pricing model." Such applications, says Kaplan, are not architected with the SaaS model in mind and therefore will fall short in terms of configurability and integration.

AMI's McCabe says most SaaS vendors have built-in turnkey integration capabilities. CIOs can quickly check the integration pedigree by asking vendors whether the applications are built with open application programming interfaces (APIs) such as J2EE. That's not to say that integration with SaaS applications is easy, but experts say integrating SaaS is less complex than integrating legacy applications, as long as the SaaS applications are built with open standards.

"If you have a legacy app built with closed APIs, that's always going to be harder to integrate with anything," McCabe notes.

Nevertheless, introducing SaaS into your software mix can bring integration issues to the fore regardless of whether the problem's root cause is the SaaS application itself. That's because vendors often talk up their open APIs but gloss over the fact that many of the APIs connecting with legacy systems weren't built with integration in mind. Some vendors are aware of this perception and are making a concerted effort to offer additional applications and functionality that are essentially pre-integrated and tested with their software. For instance, Salesforce.com recently launched AppExchange, an online marketplace where customers can find more than 300 applications, such as compensation management, expense tracking and payroll, which integrate with Salesforce.com's customer relationship management (CRM) products.

Another SaaS sticking point for Newby's firm is data access and security. "We have been approached by vendors offering to host our data on their systems, but we have always decided against this method," Newby says of the hosting model offered by many SaaS vendors. For the CAD application, Barge Waggoner hosts its own data, and the company is "very particular about who can access our network from outside."

For Newby, the SaaS multi-tenancy concept -- with everyone's data residing on a single server -- is just too nerve-wracking. Even though the data is partitioned -- and thereby theoretically inaccessible to others using the same server -- Newby and others say that having a dedicated server is the best way to ensure the highest levels of data security.

Many vendors are addressing this concern by offering a single-tenancy option, which requires additional hardware and database licenses that they offer at a premium price. Indeed, Neil Robertson, the CTO at Colorado-based Newmerix Corp., a provider of automated testing software, predicts that vendors will turn this concern into a critical selling point. "Do you want your data stuck in a data warehouse with everyone else?" Robertson asks. "Inherently it feels more secure if your data is in a single server that's dedicated to you. ... [But] that means there will be two tiers of pricing, and some of the costs you thought you were saving will go away."

This was first published in October 2006

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