The new ERP system indeed served its purpose well, shares Santos, but five years into using the traditional license-based software, the manager realized the system was turning out to be “too expensive” for them. This is why, in 2007, the parts division proposed to deploy a separate ERP system, this time implementing a solution through the SaaS model provided by Impart Solutions.

“While before we used software that “bound” us for the long-term, we are now on a per-month, per-user subscription and it is working perfectly for us,” says Jocelyn Tingzon, parts supervisor at the Kia distributor.

According to Tingzon, they have realized “significant” cost savings since they began using the SaaS model and have been able to improve its parts department processes within only a two-month timeframe. Tingzon adds that they are now looking at rolling out Web-based services such as online ordering and online inquiry to further improve customer service.

Cost benefits are the most obvious advantage of SaaS applications over traditional software, shares Morph Labs’ Damarillo. “SaaS drives down the costs involved in acquiring software and applications deployed through this model are easier to consume, are readily available and accessible via a Web browser. Licensing costs, laborious maintenance, and additional personnel related with on-premise software are no longer necessities, and are just not worth it.”

READY FOR SaaS
According to HP’s Ananth, customers today are seeking better control and visibility on the IT investment and resource that are available for business and performance, scalability and security in particular are “of paramount importance” in the delivery of secured and quality services to business. “Often, organizations are not prepared to invest in costly long-term infrastructure investment and staff training and as such, SaaS is an attractive option,” he adds.

Software as a service presents opportunities not only for consumers and enterprises but also for vendors looking into deploying on-demand solutions. According to Damarillo, software vendors also benefit from “SaaS-enabling” their applications especially amid the global crisis where businesses are “tightening their belts.” By turning into a subscription-based revenue model, these vendors would be able to tap a larger market, the Morph Labs official says.

However, one disadvantage SaaS has brought, Damarillo believes, is the hype about it, which may “overpower” the value and benefits it brings. “Also, one of the biggest concerns when it comes to SaaS is the customer’s relinquishing control of the application (particularly its availability) to the provider. This is particularly true for small-time providers who do not have a large budget for infrastructure investments,” the official notes.

For his part, HP’s Ananth believes one of the key challenges for SaaS adoption in the country would be Internet bandwidth. According to him, the quality of the telecommunication infrastructure will be crucial for SaaS adoption especially for bandwidth-intensive applications. Nevertheless, the telecommunications infrastructure in the region is improving, he says.

One other challenge is convincing the market of SaaS’ reliability in terms of application availability. “This is why we have started offering an on-demand CRM application on top of the Morph Application Platform as a way to lead the industry and show them that by deploying to a tested hosting environment, SaaS is possible on a limited budget while still remaining reliable,” says Damarillo.

“Education and awareness are paramount in driving up the adoption of SaaS in Philippines by helping enterprises understand the benefits and return on investment (ROI) they can reap from SaaS,” says Ananth, “The Philippines is poised for growth and is an emerging market with plenty of potential. Without a doubt, platform-as-a-service (PaaS) and infrastructure-as-a-service (IaaS) will help escalate the growth of SaaS as more organizations move to Internet-based or cloud services.”

“The Philippines is a very important market for us and we are extremely excited about the potential here,” says Salesforce.com, “IP-Converge Data Center Inc. (authorized consulting partner of Salesforce.com in the country) has organized events around cloud computing and the rooms have been packed to capacity on a regular basis despite the uncertain economic times. This is a very encouraging sign that we are on the right path and we do have long-term plans for the Philippines.”

Damarillo offers a bold prediction, saying that by 2010, the Philippines will emerge as a major SaaS innovation hub. “The Philippines will become an important consumer, as well as supplier, of SaaS applications, given the Philippines’ affinity for easy-to-swallow investments and global reputation for software development.”

The Morph Labs official believes there is big opportunity for SaaS applications to gain ground with small and medium enterprises, including start-ups. “Furthermore, because many open source projects have become more and more mature over the past few years, local SaaS providers can hit the ground running by building their solutions on top of that instead of starting from scratch,” Damarillo notes. “When all of these pieces start fitting together in the eye of the market, we’re going to see a significant uptick in adoption. It would do well for aspiring SaaS providers to get started today in preparation for this.”

Possibly Related Posts:

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• IT Outsourcing Reaching Out to Reach Further
• Forecast 2012

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