Peter Ellis: While Software as a Service is far more prevalent than ever before in the asset management space, SaaS is not a new concept. So perhaps we can start by discussing the material differences between the “old” and “new” age of SaaS. Can you expand on this point, please?
Kathleen Keenan: Sure. Let’s start with a clear definition of SaaS. In its most basic form, SaaS is a web-based application that is hosted by the software provider, but there is much more to it than that. As you said, this term is not new. It has been around for 15 years or so and the concept of SaaS, that is users accessing application software via a 3rd-party hosted solution, has been a standard for almost as long as computers have been in existence. That being said, today’s SaaS offerings are fundamentally different than what has been offered in the past.
In the past, centralized applications were provided using a deployment model known as ASP, which stands for Application Service Provider. The ASP model started out as a service supplied by IT infrastructure providers, who hosted the infrastructure required by a business to run all of its application software, regardless of who developed it. As specialist software vendors became more sophisticated, they started to use the ASP model as a deployment option for their own software, meaning they hosted only their own applications on an IT infrastructure that they maintained. This is when the model of software as a subscription-based service first started to gain traction. There are still some vendors deploying software using the ASP model, and these applications can be legitimately described as subscription-based software services. However, they cannot be described as the evolved SaaS applications that we know today. While SaaS is a subscription-based software service, SaaS applications extend that model quite significantly.
PE: Thanks, that’s very clear. But what is so different about the evolved SaaS applications that we see being adopted today?
KK: Two things: evolved technology, and more distinctly, the added services that go well beyond the provision of application software.
Let’s start with the technology: In the older ASP model, the software hosted by the vendor is basically the same as the software that is installed on a client’s site; it is the same software deployed in a different way. The vendor hosts multiple instances of the application, one for each client, and the underlying technology sits on the client-server, requiring each user to have a client application running on their PC.
In the SaaS model, applications are specifically designed to operate in a multi-tenant environment, built specifically to support the SaaS infrastructure and user experience. A multi-tenant environment is one where different clients access the same code base, but their data and customized interfaces are kept separate. Also, today’s SaaS solutions utilize web-based technology that allows users full access to the application through a standard web browser allowing for more flexibility.
So for one thing, the technology has of course matured in the development of web applications over the past 20 years. This technology was developed to allow web browsers to access information via the web and pass information from a local PC to a web server somewhere else.
So the web services technology used in today’s SaaS applications removes the need for a special GUI to be installed on your PC and to make the applications platform agnostic as far as the user is concerned – meaning the ability to access the most current version of the application anytime, anywhere.
There is, of course, much more to SaaS than a hosted application accessed over the web. In the SaaS model, technology companies deliver value through added services beyond a simple software application. Successful SaaS applications provide a range of value-added services through an intuitive user interface that the user can access with little to no vendor intervention. These are operational services, such as data analysis and content management, not software or IT infrastructure services, and typically make use of sophisticated data visualization features to allow business users to more efficiently investigate business process issues and exceptions, which the software intuitively identifies and flags.
All of this – new technology and value-added service – adds up to a new kind of user experience. It isn’t just the way the software is licenced and deployed that’s different; the way the user interfaces with the application is completely different, and the benefit delivered by the application to the user’s daily business processing is significantly enhanced.
PE: So why are we now seeing a significant increase in the adoption of SaaS, particularly in asset management and across financial services in general?
KK: In essence, the new user experience that I mentioned earlier means that all of the business benefits associated with SaaS can now be actually realized, thanks to a combination of factors.
First, while the use of web-based technology has been part of mainstream application development for a long time, the new technology and services that ensure highly secure infrastructures has led to a higher comfort level for business users and their clients.
Also, user expectations have changed. Users want instant gratification and with SaaS that is possible. Unlike with local installation, the implementation and training needs are typically much faster giving users access to core functionality in a more timely manner and with fewer resources.
Essentially, business users are looking for the same experience with the technology they leverage in the workplace that they receive from what they use in their personal lives – SaaS helps bridge this gap.
PE: Many thanks Kathleen. I really appreciate you taking the time to talk to me and look forward to feedback from the community To the BI-SAM Insights readers, what do you think?
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