Top Ten SaaS Buzzwords

Wednesday Nov 14th 2007 by James Maguire
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As the interest in software as a service grows, the technology generates its own terminology. But what do all those SaaSy buzzwords mean?

Whenever a new technology gathers momentum, the buzzwords start flying fast and loose. Remember the late ‘90s, when everyone was using the word “space”? (As in, “This site competes in the consumer technology space.”) These days, it’s bit embarrassing to use “space,” though a few diehards still toss it around.

Today’s fashionable new technology, software as a service, (SaaS), is rapidly generating a fresh trove of new-fangled buzzwords. Pick up a press release from a SaaS vendor, and you’ll see a heady array of terminology used in a fresh (or hype-filled) ways.

For example, if your SaaS mash-up is going to enable parametric applications, than your integration connectors must be compatible with your solution extensions. I mean, obviously.

Clearly, if a new technology requires all these buzzy terms, it must be worthy of a hefty line item in next year’s budget request, right?

Given that many IT departments still view SaaS as a newish approach, it’s likely that many decision makers can’t decode SaaS jargon without some head scratching. As a public service, Datamation set out to translate this brave new buzz-speak into human language. For help, we turned to Rob Desisto, a Gartner analyst and confirmed expert-guru on all things relating to SaaS.

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The following list is by no mean all-inclusive. Many vendors use their own terms, and buzzword inventors are minting new terms even as you read this. But this should get you started:

1) SaaS mash-ups

The term mash-up comes from pop music, when a studio musician combines two existing recordings to create a “new” song. This same concept applies to software hosted over the Internet.

“The notion is that when you get multiple Web services, you could ‘mash them up’ together into a total solution,” Desisto says.

But there’s a critical caveat to SaaS mash-ups, he notes. When you combine multiple SaaS services to form a larger solution, “the total solution is only as strong as its weakest link.” If you’ve combined three providers in a solution, and one of them has significant downtime, then the whole solution’s down.

In contrast, in the traditional on-premise world, companies have more ownership of their apps, and so are better positioned to deal with snafus as they arise.

2) Integration connector

An integration connector is a software program that allows you to take data from one application source and load it into a SaaS solution (and also send back data the other direction). This data movement typically happens in a batch environment, in which an enterprise performs an initial data load, then does a periodic refresh as needed.

For instance, Salesforce’s SAP integration connector, “is a mapping of SAP customer and account data to the Salesforce data model of customer account data,” Desisto says.

3) Solution extension

SaaS solution extensions are service offerings delivered over the Internet that add additional tools or functionality to your existing infrastructure. Desisto points to the App Exchange applications as the ultimate example of solution extensions. For example, one App Exchange offering (one of the most popular, in fact) is “Salesforce for Google AdWords.” This app piggybacks on to the main AdWords app, allowing greater functionality.

“The other thing you could do with some of these SaaS solutions is extend the data model and provide your own user interface screens, which is a further extension of the service or the app.”

4) Multi-tenancy

In SaaS multi-tenancy, multiple companies all use a single physical database and infrastructure, which is hosted remotely. All these customers’ data is stored in one place, though it’s logically partitioned.

Multi-tenancy has its strengths and its challenges. The upside is that the vendor has a low cost-per-customer in building and maintaining their infrastructure. The vendor can pass this lowered cost on to customers. And these customers are spared the headaches of maintaining the platform.

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The downside is that in many cases, customers are forced to upgrade when that central vendor upgrades – it’s like the old Soviet Union, with a single central planner that everyone lives by. “So on June 1, if a new release is coming out, you have to go to that new release,” Desisto says. “You cannot stay back on the prior release – otherwise the whole notion of multi-tenancy breaks.”

There are, however, vendors who offer different versions of software to their various tenants. “But the minute you start to get into that game, you begin to lose some of the shared economics.” When vendors support multiple versions, costs necessarily rise.

5) Vertical applications

The term vertical application – referring to apps built for a narrow market sector, like banking or pharmaceuticals – isn’t a new term, nor is it unique to SaaS.

But while vertical applications have been around in the traditional on-premise software business for years, “in the SaaS world, in the biz app area, this whole notion of vertical applications is a relatively new thing,” Desisto says.

“If you look at what Salesforce has done to date, a lot of that has been on their ability to support cross industry capabilities – I would expect that to change.” As it matures, customers will expect the same degree of specific vertical apps capability from SaaS as is currently offered in on-premise software.

6) Parametric applications

With traditional on-premise software, the underlying code needs to be rewritten to alter the services it provides. With SaaS – in theory – a user can input a new parameter, or institute some new macro business rule, and thereby create a “new” service. This new service is sometimes called a “parametric application” because it is customized in response to a new parameter or piece of meta data.

“Salesforce has leveraged the meta data model, for example, to help facilitate and deal with upgrades and new versions, essentially allowing customers to opt in to new functionality through meta data switches and so forth,” Desisto says.

7) Modular

“Modularity in the SaaS world is basically turning off or on services,” Desisto says. So instead of buying a huge app that is installed on-premise with full functionality, an IT manager picks and chooses menu style, only selecting (and only paying for) what’s needed at the time.

Also, most SaaS vendors have built their apps within the context of Web services architecture, enhancing the flexibility of modularity. “What that’s allowed them to do is really componentize the capability of the system to a fairly reasonable level of detail.”

8) Net-native SaaS

On its face, the term “net-native SaaS” seems redundant. After all, implicit in the concept of SaaS is a service delivered over the Internet. So all SaaS apps are supposed to be net-native.

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But the term makes reference to the pre-SaaS days of ASP (application service provider), an earlier form of accessing remotely hosted software. “Back in the ASP days, you may have had a more dedicated private extranet style of access, versus going over the Internet,” Desisto notes. Some of the earlier ASP solutions involved chunky, clunky apps that weren’t really designed for cross-Internet travel.

So when one refers to “net-native SaaS,” the term emphasizes how the code is written to efficiently use today’s fat-pipe-enabled Hypertext Transfer Protocol and the TCP/IP stack to enable services with (hopefully) few glitches.

9) Platform infrastructure

You’ll sometimes hear SaaS adherents hoping for some form of “platform infrastructure” to emerge, to boost the development of SaaS companies.

This is because SaaS-enabled applications – and SaaS vendors – do not exist in a vacuum. They need a platform to build their applications on; currently the most notable is probably Salesforce’s, but there are certainly others, and new ones being built.

“If I’m a start-up, and I wanted to build a SaaS solution, and I’m looking to get investment money, those [investors] would rather me not invest it in building a platform – they want me focusing on building the applications,” Desisto says.

“I think you’re probably going to see versions of platforms from different vendors,” he says.

However, “I don’t think it’s going to be ubiquitous like the Internet. I think different vendors are going to try to make a play here.”

10) SaaS

“SaaS” is itself the biggest buzzword in the world of SaaS. In the hands of a gifted SaaS sales rep, a SaaS application is the answer to all your problems. It’s cheaper, more flexible, offers less headaches. It’s the wave of the future, SaaS adherents claim. Heck, if you buy in early enough, it might even help your love life (or at least make you the rising star of the IT department).

It’s true that SaaS offers plenty of advantages. It’s both a delivery method (over the Net as opposed to on-premise) and a business model (subscription versus one-time purchase). But as software as a service matures during the next few years, the same old truth will apply: SaaS will only be as valuable as the applications it helps deliver.

If, long term, it really does enable a more cost-effective and efficient infrastructure than do traditional on-premise apps, than all of today’s SaaS buzzwords will become the established vocabulary of tomorrow.

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