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SaaS requires bandwidth boost

Alex Kayle
By Alex Kayle, Senior portals journalist
Johannesburg, 14 Jul 2009

Low-cost bandwidth is needed for software-as-a-service (SaaS) capabilities to reach full potential in SA, according to Pankaj Pema, MD of VirtualBox, who will speak at ITWeb's upcoming SaaS conference in Johannesburg.

Pema says SaaS depends to some extent on the availability of high-capacity and low-cost connectivity. “Right now, SaaS solutions are available; however, they tend to lag behind those of more mature markets in that specific measures must be put in place for connectivity before SaaS becomes viable.”

At ITWeb's SaaS Conference, taking place at Gallagher Estate on 4 August, Pema will discuss the benefits of SaaS, as well as how increased bandwidth will drive its local adoption.

According to Pema, sufficient bandwidth is critical for the success of the SaaS model for high application performance and a quality user experience. The lack of high-speed bandwidth has resulted in only a few full SaaS environments being rolled out. “With more bandwidth expected at lower cost this July, it is a further step towards the positive development of SaaS in this country.”

Pema points out that local offerings tend to be remotely hosted applications as opposed to true SaaS. “With true SaaS, full scalability and on-demand is achieved; that is, the user can go from zero to 500 users, and back to zero again, over the space of two months. Put simply, a true SaaS environment will lack one thing which has previously been common to all service provider relationships - a contract.”

Selective consumption

ITWeb's Software as a Service (SaaS) conference

More information about ITWeb's SaaS conference, which takes place on 4 August 2009 at Gallagher Estates, Midrand, is available online here.

SaaS uses a classic 'pay as you use' model. Pema says this can be compared to how a person consumes electricity. “There is, or should be, a massive store of power on the grid. You don't pay for that until you use it to heat your house. SaaS is exactly the same. The provider makes sure there is capacity available and customers draw on that capacity as and when they need it, paying only for the consumption,” he explains.

Pema points out that the business user is able to consume only as much as they need, providing flexibility in the cost of applications which directly matches the business performance. This results in faster roll-out of business applications, sometimes within minutes, and reduced risk, because if the SaaS doesn't work, the user can simply disable the application with no capital expenditure or upfront costs.

Most SaaS environments tend to be a hybrid system where the organisation has some of its own infrastructure supporting in-house applications, and other applications hosted by a service provider. “The theoretical scenario is that the client IT environment can be reduced to mere terminals which access the remote application. This is a future-perfect scenario, however,” Pema adds.

According to global research firm Gartner, SaaS is forecast to have an annual 19.4% compound annual growth rate through 2013 for the aggregate enterprise application markets. This is more than triple the total market compound annual growth rate of 5.2%. Gartner says SaaS adoption is strong in selected markets, but has limited potential in other markets and sub-segments.

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