IT management software-as-a-service

* Management heavyweights offer products via hosted, subscription model

Let's face facts. Enterprise-level management software deservedly earned a reputation of being difficult to deploy and challenging to maintain in the 1990s, and despite vendors' best efforts, little has happened to change that perception.

Until recently, that is. A handful of start-ups such as Service-now.com, Smartpath and Hypersoft have emerged to provide service and asset management technology via subscription services. Now leading management software makers are realizing if they remove the barriers to adopting their technologies perhaps they can land new customers and manage more systems by hosting their own applications and charging for use via subscriptions. According to a recent report from Forrester Research, software-as-a-service (SaaS) offerings made up just more than 1% of the $18 billion IT management software market in 2008. The analyst firm expects that number to grow to closer to 10% by 2013.

Forrester analysts attribute this potential growth to several factors. Fore one, subscription-based pricing eliminates upfront investment and perpetual software licenses. Many SaaS offerings put Web 2.0 technologies to work in their user interfaces, which Forrester says "is particularly interesting for IT operations professionals, who strive to offer self-service and service catalog front ends to their customers." SaaS offerings also do away with upfront and ongoing costs as well as the ongoing maintenance that stymies many IT shops.

"SaaS also eliminates the initial outlay and ongoing costs and risks of installing, supporting, and maintaining in-house software and hardware — and the associated IT staff," Forrester says. "Internet-based, on-demand, 24/7 systems can often dramatically improve user access and application performance. It's also much quicker to deploy application upgrades, as the provider only has to install the update on the host system."

CA is the most recent of the big four to jump on the SaaS bandwagon, which offers the company a means to attract new clients and potential customers the benefits of enterprise-grade management capabilities. CA announced last week at its CA World 2008 user conference that it will broaden is SaaS offerings with the release of Clarity PPM (Project & Portfolio Manager) On Demand, a hosted pay-per-use version of the vendor's Clarity PPM 12 enterprise project management software. This release marks the third application CA delivers via a SaaS model -- the other two being CA GRC Manager On Demand and CA Instant Recovery On Demand -- and company officials say a hosted services model currently works for more than 1,000 customers worldwide.

Competitors BMC, HP and IBM each have launched their version of hosted IT management services as well, looking to cash in on the current SaaS craze. According to Forrester, the quartet of incumbent vendors needed to develop SaaS strategies to better compete with niche players who developed their offerings as SaaS from the beginning. That means the big four might be playing a bit of catch-up on the SaaS front.

"The established players in IT management are now waking up to the interest in SaaS," the recent report reads. "They already deliver some parts of their offerings as remote service subscriptions; these aren't too far from the SaaS business models, although they still lag a generation behind SaaS pure plays in term of the technology and use interface deployed."

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Copyright © 2008 IDG Communications, Inc.

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