GXS Insights

Introducing SaaS 2.0

Until recently, SaaS was focused on providing a method for cost-effective software application delivery. The next generation of SaaS, SaaS 2.0, will change this and will provide a fully integrated business service provisioning platform. SaaS 2.0 will provide the perfect, low cost, platform through which companies can engage with their business partners. A recent study from Saugatuck Technology, entitled “SaaS 2.0 - Software as a Service as a Next-Gen Business Platform,” shows that SaaS is at a fundamental tipping point from simply being a service providing applications, to one which provides applications, and is fully integrated to a company’s B2B infrastructure. Saugatuck highlighted a pronounced increase in the SaaS adoption levels, particularly among the small and medium-sized businesses (SMB). The diagram below illustrates the key adoption levels and differences between SaaS 1.0 and SaaS 2.0.

Source: SaaS 2.0: Software-as-a-Service as Next-Gen Business Platform, by Bill McNee, Saugatuck Technologies, April 2006

In its simplest form, according to Saugatuck, SaaS 2.0-based environments will encompass the following key attributes:

• Secure, flexible and efficient business processes and workflows
  The key business drivers for SaaS 2.0 will be about helping users transform their business structures and processes. SaaS 2.0 could even be considered as a platform for Business Service Provisioning
• Service level agreements
  SaaS 2.0 will provide a much more robust infrastructure and application platform that will need to be driven by Service Level Agreements (SLAs) to ensure high service availability
• Rapid achievement of business objectives
  The intention of SaaS 2.0 is to enable companies to reach business objectives in a much shorter time frame. For example, SaaS 2.0 facilitates the rapid integration of trading partners into a company’s B2B infrastructure
• Provide value-added business services
  Vendors and service providers will differentiate themselves by offering a range of value- add business service “plug-ins”. In this way, SaaS 2.0 will offer companies a mix of business process, application functionality and managed services at an operational level. SaaS Integration Platforms (SIPs) will emerge as vendors; consultancies and VARs will learn how to bundle and deliver these critical, value-add capabilities
• Business impact via SaaS “Network Effect”
  Saugatuck defines the “network effect” of SaaS 2.0 as a cascading and radiating impact of business improvement and change within, across and beyond the user enterprise. In essence, a SaaS 2.0 deployment will increase and improve choices, efficiencies and business capabilities within the user enterprise, and between the enterprise and its suppliers, customers and business partners
• Low-cost “white label” vertical solutions
  The business, technological flexibility and managed services aspects of SaaS 2.0 will see the emergence of a number of vertical industry-focused applications for use by SMBs. Many of these smaller companies have often eluded the enterprise software vendors, but the low cost, ease of deployment and service availability will see SaaS 2.0-based applications being adopted much more quickly among the SMB community
• SaaS integration platforms provide application sharing, delivery and management services
  As users add SaaS applications over time, SIPs will play a critical role as “solution hubs” that provide integration, delivery and management services

In summary SaaS 2.0 goes well beyond today’s SaaS business drivers which have so far focused on cost-effective software deployment. SaaS 2.0 is more focused on helping users transform their business workflow and processes, and ultimately the way in which they do business. Saugatuck’s research concludes that SaaS 2.0 will come in many forms and flavors, depending on market and industry segmentation.

GXS has a number of these SaaS 2.0 building blocks already in place. Our global Trading Grid platform already hosts a number of applications and services which are offered as a Managed Service to our customers. In addition, the GXS Trading Grid® Ultra platform offers unmatched high availability, ensuring adherence to SLAs. GXS has also invested millions of dollars in upgrading its data center infrastructure to make certain Ultra, the global platform, will provide the ideal environment to host industry leading SaaS 2.0 based-applications in the near future. SaaS 2.0 represents a major shift in how companies all around the world, no matter their size, will be able to be fully integrated to a seamless, low cost, easy to deploy and highly available B2B platform.