A Framework Model for a Software-as-a-Service (SaaS) Strategy

A Framework Model for a Software-as-a-Service (SaaS) Strategy

James P. Lawler, H. Howell-Barber
DOI: 10.4018/978-1-4666-5888-2.ch097
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Cloud computing is defined in the literature as the following:

… a [method that enables] convenient, on-demand network access to a shared pool of configurable computing resources … that can be provisioned rapidly and released with minimal management effort or [cloud] service provider [CSP] interaction. (Mell & Grance, 2011, p.1)

Software-as-a-Service (SaaS) is defined in the literature as the following:

The capability [for applying] the [SaaS cloud service] provider’s applications running on a cloud infrastructure; the applications are accessible from … client devices through a thin client interface, as [through] a Web browser; and the [firm] does not control nor manage the underlying cloud infrastructure, including networks, operating systems, servers, storage or even individual application capabilities, with the … exception of limited – specific application configuration settings. (Mell & Grance, 2011, p.1)

SaaS, a dominant method for delivery of software (Brown & Nyarko, 2013), is effectively a hosted service offered and shared by a provider [CSP] to cloud consumer firms (Erl, 2011). Examples of SaaS are business intelligence, collaboration, customer relationship management (CRM), e-mail and social networking applications. Frequent examples of CSP technology firms providing SaaS are large-sized firms from Microsoft, Oracle and Salesforce.Com to small-sized firms from Dropbox to SugarSync. The cost of the cloud is decreasing in industry (Koulopoulos, 2012), and this method of SaaS enables deployment of software almost immediately, eliminates initial investment in hardware and software, and facilitates flexible pricing. This method further facilitates high scalability, infinite storage and multi-tenancy. The benefits of SaaS ensure increased deployment of cloud computing as a delivery method of systems (Sitaram & Manjunath, 2012) in, for example, financial firms. The cloud is considered the culmination of the evangelization of provider technologies (Carr, 2008) in industry.



Financial firms are deterred frequently however from investment in cloud computing and Software-as-a-Service (SaaS). SaaS can be considered a black box process in which financial firms may become dependent on a cloud service provider (CSP) (Streeter, 2011). The rights of the firms to their data controlled on external platforms may not be clear in contracts favoring the provider of SaaS. Data privacy, provider reliability, and risk management of the services may be issues to the firms (Rocha, Abreu, & Correia, 2011, and Vignos, Kim, & Metzer, 2012), especially in the financial industry that is governed by increasing regulatory rules. Data protecting services (Sengupta, 2013) and security on European Union international systems may be issues for the firms headquartered in the United States. Issues are evident generally in outages of processing cited in the practitioner press (Prigge, 2012) that impact services to the customers of the firms and inherently customer trust. Inconsistent portability and security standards of the CSP provider may be an issue in preventing firms in the financial industry from investment in SaaS (Ortiz, 2011). The immaturity of the provider, either domestic or international, may be a problem. Moreover, the information systems departments in this industry may not have a framework methodology for initiating SaaS systems that is not biased with provider methodology or technology, and they may even be resistant to SaaS, as they may perceive a loss of management power if systems are migrating to the cloud (Black, Mandelbaum, Grover, & Marvi, 2010). Expected outsourcing savings from SaaS may not even be the result of the investment (Violino, 2011).

Key Terms in this Chapter

Private Cloud: Concept of cloud services controlled in internal private cloud systems, operated and owned by the consumer organization.

Software-as-a-Service (SaaS): Method of having applications accessible from cloud infrastructure resources.

Software-as-a-Service (SaaS) Offering: Practice of cloud service providers (CSP) offering generic and specific application cloud services, including maintenance and support.

Cloud Computing: Concept or method for enabling on-demand access to computing resources that can be configured for business cloud consumers or firms with minimal management of a cloud service provider (CSP).

Cloud Service Provider (CSP): Description of a technology firm providing cloud computing management resources and services of technologies to cloud consumers.

Infrastructure-as-a-Service (IaaS): Method of accessing data center, networking and processing services and storage from a cloud service provider (CSP).

Multi-Tenancy: Feature of design for maximizing the number of business cloud consumers or firms on the cloud services of a cloud service provider (CSP).

Hybrid Cloud: Concept of cloud services controlled in internal private cloud systems and in external public cloud systems.

Platform-as-a-Service (PaaS): Method of accessing developmental, environmental and infrastructural services and solutions from a cloud service provider (CSP).

Public Cloud: Concept of cloud services controlled in external public cloud systems and technologies, operated and owned by the cloud service provider (CSP).

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