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The Recipe for SaaS Success Part 1: Make vs. Buy

The demand for cloud solutions is on the rise, driven by new imperatives, delivery choices and requirements for IT organizations. These cloud solutions are changing how IT services are created and delivered. Today's customers are purchasing cloud solutions, not servers, and using SaaS to extend or replace existing applications. Consider the following statistics:

  • The predicted cloud software market size by 2017 is $76.1 billion
  • There will be 2.5x more cloud ISVs by 2017
  • 91% of net new software will be built for cloud delivery in 2015
But what do companies really mean when they say they want to deploy cloud solutions and services? Robert Mahowald, Program Vice President SaaS and Cloud at IDC, joined us for a recent webinar to help explain. He groups these business requirements into five categories:  

  1. They want new capabilities they don't currently have and can't afford to buy, such as better business apps and and content hosting
  2. They don't want or have the ability to build a data center and require a lower cost of entry, a common issue for start-ups
  3. They want to be where their users are. More of their user base is accessing cloud services from around the globe, and they need the ability to deliver apps and information to their users at any time, to any place, on any device 
  4. They have a temporary liquidity problem brought on by unpredictable workloads and IT would benefit from reporting and analytics 
  5. They need to park data for a long time and require lower cost solutions for archiving digital assets like medical records, personal images or sensor data

The development and growth of cloud computing is delivering the architecture that allows SaaS to grow. Now cloud service providers can utilize consumer services to arm companies with what they need without investing in a large IT environment. SaaS is also attractive due to its elastic nature, companies can only use what they want when they need it, and pay for only what they use.  

However, challenges arise when trying to cook up a successful SaaS experience. Robert highlights customers' high expectations for availability and performance of SaaS solutions, and points to the fact that public cloud SaaS services have multiple points of failure along the delivery chain.  To overcome, providers must obtain skills and capabilities to consistently secure and support elastic, web-scale SaaS apps. The problem? The ability to do so is outside the scope of most SaaS providers. As a result, Robert and IDC recommend that the vast majority of SaaS providers buy or partner, not build, the cloud services that provide them with web infrastructure and monitoring. This arms providers with the ability to offer high performing, reliable, secure and global SaaS delivery to customers while they focus on what they know best - their product. 

For more information or to listen to the full Building Your SaaS Solution: The Recipe for SaaS Success webinar, click here. To learn more about SaaS and the challenges of Application Delivery, read Akamai's Big Book on SaaS Application Delivery

Jim Geronaitis is industry marketing manager for SaaS solutions at Akamai.