14 December, 2005 - 8:11am

Earlier this week John Fontana, Senior Editor for Network World, covered the "white-hot" popularity of software-as-a-service (aka on-demand). He cites two recent studies, which found that businesses are betting that on-demand is a part of their future. The AMR Research study shows that over 78% of respondents across major vertical industries and company sizes are currently using or considering on-demand. Similarly, 65% of respondents in the Cutter Consortium survey said they were using or considering on-demand.

Fontana describes salesforce.com as the current poster child of corporate software-as-a-service, having grown its customer base by nearly 1,100% in the past four years to 351,000 subscribers. Cutter discusses the rapid rise of on-demand providers, like salesforce.com, which they believe have fundamentally changed the competitive landscape among the established independent software vendors driving them to deliver new on-demand alternatives to traditional packaged software applications.

AMR Vice President, Bill Gannon, notes that on-demand applications are popular because "they recognize all the promised benefits of decreased cycle time, faster time to value, lower cost per user, lower [total cost of ownership], not to mention the change in the economic model from a capitalized expenditure to a manageable [monthly] expense." The Cutter findings validate this, with 86% of respondents expecting to use on-demand to generate costs savings, such as: greater ROI (27%), smaller staff required (24%), improved reliability and performance (21%), quicker/easier deployments (18%), and systematic upgrades and updates (8%).

There are however, some concerns raised with using on-demand. The AMR survey lists the top three risks as: protection of corporate data/information, putting strategic information outside the firewall and integration with on-premises solutions.

Sxip Access, our identity management solution for on-demand applications such as salesforce.com, addresses these issues. Sxip Access enables IT administrators to manage user access to Salesforce as if it were an application running inside their corporate firewall. And by closely integrating with LDAP or Active Directory, organizations can extend their current identity management infrastructure to Salesforce.