When the Cloud is Just Not Enough: the New Focus on SaaS

We have all experienced the marketing hype surrounding innovative technology trends. Who doesn’t relate to the appearance of a new product that analysts projected “would change everything”—only to disappear on the scrap heap of “who would have ever thought that was a good idea?” For all the failures, there are practical technology advances that check all the boxes for success. These success stories satisfy the following criteria:

Are there practical uses for the technology?
Is the business model for using the technology a step-level improvement from today’s technology?
Can businesses adopt the technology quickly?
Can the technology continue to grow and create new product opportunities in the future?

For several years, the cloud has proven to be the game-changer that analysts initially predicted. Even in the PLM sector, where the number of cloud-based deployments initially lagged behind large enterprise systems, the adoption rate has drastically increased since 2020.

In one estimate, “86% of the industrial respondents to a 2021 CIMdata survey said they were either already on the cloud, have chosen a cloud-based solution and are moving, or have seriously investigated moving their data and process management workloads to the cloud.”

Let’s investigate how cloud-based solutions grew so quickly that they have become a commodity for businesses and examine the next logical step for cloud-based solutions.

Cloud Technology: a Hard Offer to Refuse

For decades companies have continued to invest (often grudgingly) in their data centers. What once was considered to be a competitive advantage for an organization has evolved into a relative disadvantage siphoning significant amounts of capital in an attempt to keep up with technology trends, changing business paradigms, security demands and compliance requirements. With the cost of specialized technical resources surging and new system strategies introduced regularly, many IT departments feel the situation has simply become a losing battle. Eventually, companies question why they are spending so much time and effort in an area that is not even a core competency for their organization.

The cloud has been a welcome opportunity for companies looking to alleviate the burden of their data center responsibilities. With several major companies including Microsoft, Google and Amazon offering hosting alternatives to the status quo, the “business of the cloud” has grown quickly. Infrastructure-as-a-Service (IaaS) provides customers with virtually unlimited capacity for the latest technology hosted from the most secure environments around the world. Infrastructure is delivered quickly, and customers generally pay for only what they use. Additional infrastructure can be added on demand and only when required.

IaaS offerings are paid through operating expenses (OPEX), leaving valuable capital expenditures (CAPEX) available to the customer for more profitable investments. Furthermore, cloud providers offer around the clock support via highly specialized technical staff. Data centers are located globally, providing high availability for customers and ubiquitous access to users from any location.

Why Software-as-a-Service (SaaS) is Critical in the Future

As companies enjoy the benefits of the cloud through IaaS offerings, they are beginning to realize the scope of these services covers only half the issues. While organizations successfully reduce their internal data center footprint with IaaS, they still need to manage the numerous software solutions that drive their organization. And like the growing effort of managing increasingly complex infrastructure, the intricacies of managing multiple software solutions have become more complex, expensive and unmanageable.

When a company utilizes a SaaS offering, the provider not only manages the infrastructure, but also the management of the application software. As large, enterprise software packages become highly interconnected and dependent upon one another, the expertise necessary to ensure the application ecosystem is optimized for system performance, security and data integrity becomes more challenging.

IT departments simply do not have the capacity to maintain specialty skillsets for every system they run in-house, especially when one considers the constant state of change most application software products experience over time as they align with new business trends and technology. SaaS offerings provide the needed expertise to ensure the software is optimized for the environment.

Not All SaaS Offerings are Created Equal

Organizations need to be aware of some key factors as they look to migrate existing on-premises deployments to a cloud-based SaaS environment. Most SaaS offerings limit the ability to significantly customize the software’s business logic. While this may be acceptable for smaller, less complex organizations, large companies struggle to adopt out-of-the-box functionality to work within their business processes. This is particularly true for PLM deployments.

Furthermore, many SaaS offerings do not provide the complete range of capabilities and applications provided by a software vendor’s flagship product. This can make the migration of an existing system to the cloud difficult since existing functionality may not be available in the cloud version of the software. Another point to keep in mind is that most SaaS offerings force updates into a company’s production environment on the provider’s schedule. While perfectly acceptable for some companies, highly regulated companies often have faced difficulties when systematic updates create compliance issues or other associated liabilities.

Cloud Dependance

It is safe to assume most future system deployments will reside wholly or partly in the cloud. The business propositions for IaaS and SaaS offerings are simply too attractive for organizations to ignore. The cloud and its associated SaaS service offerings provide a strong combination of technology and business services that deliver a step-level change for systems deployment and delivery.

This article was submitted by Bruce Bookbinder, product marketing manager at Aras.