-by Dirk Beth, Mission3
As CEO of a life sciences software as a service (SaaS) company, I hear on a daily basis how companies are no longer interested in paying large enterprise license fees for ongoing IT maintenance. They are looking for alternatives.
It has taken a long time to get here. Many of us are accustomed to the old ways of enterprise software--the bygone era of client-server-based, lengthy, high-cost, risky and complicated IT projects.
We suffered through that era to make our business stronger, faster and more efficient, but it is the functionality that created these improvements, not the software. Now life sciences companies can get that functionality via the SaaS model without the installed software, or the IT backend.
This is compelling to early-stage and established companies alike, as it enables them to focus on their core business with little outside distraction.
As Scott Bils points out in an article in Sandhill.com, "The question around adoption of applications delivered via SaaS or cloud-based models has rapidly shifted from ‘if' to ‘how quickly' and ‘how far.'" In fact, Bils says, "SaaS adoption is now occurring in areas once reserved exclusively for on-premises applications, including mission critical applications such as ERP and HR in both small and large enterprises."
Life sciences companies of all sizes need to take note of SaaS for several reasons. First is to ensure responsible fiscal operation of the business. Investors want to see business-savvy decisions that both preserve cash and ensure continuous and efficient operations.
Second, life sciences companies need to focus on their core business. The assignment of funds away from core business applications and to such IT line items as enterprise software licenses and implementation just doesn't make sense. Likewise, redirecting non-IT human resources to gather requirements and assist in software implementation only extends already lengthy life sciences product development.
Lastly, compliance can be eased when the hardware environment is already validated by the SaaS vendor. As CFO.com contributor John Edwards outlines in his article, "A Sense of Validation," "hosted apps can help lighten the regulatory load."
Although sophisticated apps can now run on the web, it is quite possible that soon all apps will run in this model. I wrote this article using a web-based authoring tool...something to think about.
Dirk Beth is president at Mission3 in Phoenix. Contact him at [email protected]