Documens Boss

Recent announcements of Google's acquistion of Docverse, a start up company that allows users to collaborate, share & edit Microsoft Office documents on line, together with Microsoft's own BPOS (Business Productivity On-Line Service) and Windows Azure, Infrastructure-As-A-Service (IaaS) offerings are clear signs that on-line, collaborative document management is going mainstream. Perceived user benefits including ease of adoption, integration and deployment, along with lower total cost of ownership with a ‘pay as you go’/or usage model, are compelling drivers for SaaS. 
 
The rise of enterprise level social networking, increased broadband connectivity, mobile computing and a generation of management very comfortable with accessing and sharing content held by a (trusted) third party, are further dynamics likely to accelerate the adoption of SaaS solutions in the ECM sector.  In addition, many analysts are predicting that the SaaS market itself will further consolidate and be led by vendors who offer Software Platforms-as-a-Service (PaaS),or Infrastructure as a Service (IaaS)
 
 As SaaS begins to impact the more traditional on-premise based software solutions provided by many ECM vendors, Document Boss gleans some valuable insights from both pure play SaaS vendors and those that have added a SaaS solution to their traditional, license server sales models.
  
John Symon, SVP AsiaPac at Document Boss, has collated a variety of observations, from companies around the globe, operating within the SaaS niche. Sharing their perceptions are the following industry leaders:

• Wade Weidong, CEO, GEONG International, China
http://www.geong.com/Site/08GEONG/EN

• Nick Kingsbury, Director, Objective Corporation, Australia          
 http://www.objective.com/

• Dan Dillon, Product Marketing Manager, Perceptive Software, USA
http://www.perceptivesoftware.com/

• Sam Ferguson, CEO, The EDM Group, UK                         
http://www.theedmgroup.co.uk/

• Frank McKenna, CEO, Knowledgeone Corporation, Australia
http://www.knowledgeonecorp.com/

• Ron McClellan, Director OBOL & Hosting Services, Hyland Software, USA
http://www.hyland.com/home.aspx

• Declan McGonigle, Director, Group Alliances, SoftCo, Ireland
http://www.softco.com/

• Leigh Jasper, CEO, Aconex, Australia  
http://www.aconex.com/ 
 
- Helmut Fallmann, CEO, Fabasoft, Austria
http://www.fabasoft.com/
 
 
 
1) How has your company managed to transition from a traditional license/server to a software-as-a-service sales model? How do you provide both? What have been the main challenges in adding a SaaS solution and how have you overcome them?
 
Leigh Jasper, Aconex, Australia: We offer only Saas

Declan McGonigle, SoftCo, Ireland: Rather than transition from a traditional license/server model SoftCo provides its Business Process Automation solutions either on-premise or on-demand (SaaS), depending on the customers preference. The SoftCo SaaS offering is delivered on the same SoftCo R8 infrastructure as deployed to our blue-chip on-premise customers such as Argos and John Lewis.   The main challenge is to ensure that the infrastructure is fully redundant, scalable and compliant.  We established a dedicated Hosting Group who have worked for 2-3 years on the optimum platform and, by using our StorLife CAS software, we store all documents compliantly on magnetic media, thus guaranteeing authenticity.

Wade Weidong, GEONG International, China: The transition from a traditional business model to a SaaS model was based on demand from our clients. Typically, within a large enterprise, the IT department likes to utilize the IaaS (Information-as-a-Service) model whilst the Business Unit likes to use the SaaS model. As the business unit drives more business, the need for SaaS offerings increases.
Our SaaS solution offerings originate from our proven IaaS solutions and provide best practice, which is already proven with existing clients. The main challenge in China for providing an SaaS model, is security of information and how to provide high availability of service. In order to resolve these issues for our clients, we maintain alliances with leading ISP providers, such as China Telecom.
 
Helmut Fallmann, CEO, Fabasoft, Austria: Fabasoft provides its software products both for on premise installation and as SaaS hosted software.Fabasoft Folio enables the uniform, secure and reliable management of all digital content, and the efficient implementation of digital business processes in the enterprise.The product includes capabilities for Enterprise Content Management, Collaboration, Workflow, audit-safe archiving, and MoReq2 certified records management.Fabasoft Mindbreeze provides fast and secure information access in the enterprise. It transforms search results into contextual and actionable information. Our main challenges have been to:

• achieve top service level quality. Fabasoft developed a dedicated product, expressly to address this problem: Fabasoft app.strudl.
•  develop a web browser user interface with exceptional usability and style. SaaS hosted software has to provide the same  widely accepted user experience as Web 2.0 applications (Facebook, LinkedIn, Flickr).
• significantly reduce operational costs by running the Fabasoft software products on an Open Source Software stack in the Fabasoft data centers

 
 Nick Kingsbury, Objective Corporation, Australia: The Saas delivery is separate from the charging model and, initially, our SaaS offerings have been priced more like a conventional licence model.  The key is, what does the customer want and how do they budget for solutions?
 
Dan Dillon, Perceptive Software, USA: Perceptive Software provides four discrete ECM deployment options, including SaaS, all of which are currently used by our customers. Given the diverse needs of our customers and of the marketplace, we're flexible in how we deliver our ECM software.

Sam Ferguson, The EDM Group, UK: Historically, EDM did both but, being a small company, providing hosting services, we have the flexibility to create commercially viable deals for both models. We currently offer new clients only SaaS.

Frank McKenna, Knowledgeone Corporation, Australia: We recently started offering SaaS as an option in all proposals, alongside our usual service offerings. The main challenge has been finding high quality, experienced, well regarded and certified data centre partners: we choose a different partner for each country. Some vendors talk about issues with converting their revenue stream from ‘up-front’ to monthly but that has not been a problem for us; we welcome the monthly baseline revenues as they are an excellent cash flow stream. SaaS is a good business model for both the customer and the vendor.

Ron McClellan, Hyland Software, USA: Our transition involved being equally committed to both the SaaS and on-premise models for delivering ECM. Each model is a valid approach, in their own right, to meeting an organization’s ECM needs. So what it comes down to, is matching individual business needs and resources with the right option, based on the specific benefits offered.

For example, take SaaS. For some organizations, it’s a matter of preference – Maybe they’d get a faster ROI with a SaaS solution. For others, it’s because of necessity – which could mean anything from a shortage of IT resources to a lack of capital funding. It could even be because SaaS ECM solutions can be deployed so rapidly. There is no one solution deployment method that is right for every customer: some want SaaS, some want on-premise. The choice should come down to determining the option that’s the best fit for each organization’s particular circumstances. We offer both because we’re committed to solving organizations’ ECM needs. In our opinion, to not offer choice is to ignore the needs of our current and potential customers.
Initially, it was a matter of education – and rightfully so. Organizations interested in SaaS have different issues to those looking for an on-premise offering. And, of course, the pricing models are very different. It took some time and effort, but after training both our internal sales staff and our re-seller channel, they realized the potential opportunity a SaaS-based product afforded our customers.

Next, we needed to educate the market. These days, we hear about SaaS all the time and more IT professionals are asking about it, too. But when we first broke into the SaaS market seven years ago, that wasn’t the case. At that time, we spent a lot of time evangelizing the concept of SaaS and bringing clarity to what is still an often misrepresented term.
Finally, the key challenge we took on was creating strong controls and processes around availability, privacy and security. We’ve worked hard to build those controls, and then to back them up with external security and process audits and testing.
 
 

2) Which market sectors and applications are you finding are the fastest adopters of SaaS, and why?

Leigh Jasper, Aconex, Australia: Aconex is an organisation offering global collaboration platforms for construction and engineering projects, used by teams to manage their information online. Adoption is highest in Europe, N America, Australia and the Middle East, where online collaboration has been well established for almost 10 years. It’s hard to imagine a decent-sized development going ahead without a collaboration platform in place. Adoption is high because every organisation on the project shares in the benefits, such as reduced risk and a better return on the project.

Declan McGonigle, SoftCo, Ireland: While we have particular success in Healthcare, our solutions are also adopted in construction, distribution, technology and many other sectors. The key to success has been working with companies that have understood the huge savings in infrastructure, people and process improvements by leveraging the new cloud standards. Because of the flexibility of the architecture we are able to provide free trials to customers, which allows them to see the real savings and benefits.

Wade Weidong, GEONG International, China: The finance and auto sectors are the fastest adopters of SaaS. The major applications are related to marketing functions, such as search engine marketing, social networking, social media analysis etc.
 
Helmut Fallmann, CEO, Fabasoft, Austria: Small to medium enterprises across all market sectors are typical users of SaaS hosted software. Typically, they currently already outsource significant business information, for instance to financial services or tax accountant services. And they have an obvious interest in reducing costs for internal IT operations - in particular, during economic downturns such as we are experiencing at the moment.

Nick Kingsbury, Objective Corporation, Australia: We target the public sector, notably local authorities, and have 240 customers now on our SaaS offerings. The issue is all about the value the application delivers, the means of delivery is somewhat secondary. However, it does mean lower ongoing operating costs for our customer and also a much more agile product development programme; everyone is on the same version and releases are much more frequent.
 
Dan Dillon, Perceptive Software, USA: We've seen all of the market sectors we serve express a real interest in SaaS, and this interest continues to intensify.  Healthcare has been one of the fastest adopters, though we're seeing financial services, telecom and technology companies opting for SaaS as well. If we look at adopters by size of business, it's the larger organizations that are moving more readily toward SaaS. In some cases, large organizations are making strategic decisions to run their business on SaaS applications, thereby keeping themselves focused on what they do best and serving their customers (instead of having to worry about system planning, implementation, maintenance, upgrades, etc.). ROI is also a major consideration. With a SaaS deployment; the return often comes faster than it does with a traditional deployment.
 
Sam Ferguson, The EDM Group, UK: Finance, Housing, Health.  IT departments are interested in owning and running platforms, whereas the business units are interested in buying a working service without in-house, IT interference and CAPX requirements. 
 
Frank McKenna, Knowledgeone Corporation, Australia: For us (selling records and document management or ECM solutions), it seems to be evenly spread across government and industry – We do not see a pattern yet. A government agency is just as likely to accept a SaaS proposal as a private company. In fact, government has probably been ahead of the curve.
 
Ron McClellan, Hyland Software, USA: At first, it was all financial services. The community banks and broker-dealer market were ahead of the curve, interested in learning more about SaaS as an option for ECM. Now, it’s government and healthcare. For government, there’s significantly more grant funding available for technology, so they’re thinking about ECM now more than ever. And when it comes to on-premise or SaaS, even the CIO of the U.S. government is advocating SaaS as a viable option.
More recently, we’ve seen a push in healthcare. The HITECH act, part of ARRA, has tasked healthcare providers with digitizing patient records and other content associated with them and, as a result, they’re contemplating adopting not only an electronic medical record (EMR), but also ECM. They’re really starting to understand that, while an EMR takes an electronic health record so far, there’s still about 25 percent of it – EKGs, physician notes, consent forms - that an EMR can’t capture and manage. That’s where ECM comes in - And considering ECM includes considering deployment options. As you can imagine, security is a big barrier to SaaS in healthcare but once that concern is dispelled, they’re very receptive.
 
 
 3) What are you finding are the greatest barriers to adoption of an SaaS based software solution, and why?

Leigh Jasper, Aconex, Australia: New clients sometimes have questions about the protection of their information, but once they understand the infrastructure, policies and processes that a company like Aconex invests in to ensure data security and privacy, any concerns quickly dissolve. Individual users seem very comfortable with SaaS - happy to be able to access their information quickly and securely, from wherever they are working.

Declan McGonigle, SoftCo, Ireland: The greatest barrier to adoption of a SaaS based solution is typically, comfort, regarding security of the customer’s documentation and data.  To address this issue, we have implemented a number of controls.  We have dedicated resources towards achieving ISO 27001 accreditation to demonstrate the processes that we undertake regarding security.  We also uniquely deliver each customer’s solution on a dedicated, virtual machine to ensure that there cannot be any issues with data security.  These approaches have been very successful in addressing any security concerns raised by our customers or our partners.
 
Wade Weidong, CEO, GEONG International, China: Sometimes the technical architecture will become the biggest barrier to adoption of a SaaS because the SaaS application or platform needs more flexibility and scalability. On the other hand, users will have different expectations of SaaS applications as compared with traditional software solutions.  
 
Helmut Fallmann, CEO, Fabasoft, Austria: Enterprises are cautious regarding the safety of their business assets. Another issue is how these organizations can fulfill legal or industry specific compliance regulations in a SaaS environment.Fabasoft addresses these barriers with uncompromising adherence to international standards. Fabasoft has an ISO 27001 security certificate.We recently completed our SAS 70 Type II audit (performed by PriceWaterhouseCoopers), and we have successfully finished examination of our audit-proof archiving solution (performed by PriceWaterhouseCoopers). Fabasoft is also the first software vendor to receive the MoReq2 certificatefrom the European DLM Forum on behalf of the European Commission. MoReq2 is the European standard for Records Management.
 

Nick Kingsbury, Objective Corporation, Australia: Occasionally, the IT group slows down the process, but only that.  We have not lost a sale because of the SaaS delivery model. Again, it’s all about the application and the value it delivers; the tech is quite rightly secondary.
 
Dan Dillon, Perceptive Software, USA: Without a doubt, data security is the biggest concern. The good news is that SaaS actually reduces risk on a variety of fronts. Assuming the SaaS customer is hosted by a legitimate provider, the data center in which their environment resides should be immensely more secure than if the system were hosted on premises. A majority of organizations cannot afford to operate SAS-70 rated data centers (as Perceptive Software does), which provide high availability and scalability.  In addition, SaaS ECM provides customers with the flexibility of discontinuing use if they are dissatisfied, knowing that they have not made a huge capital expenditure. There's a lot less heartburn when the initial expense is low. Perceptive Software has not had any SaaS customer attrition.
 
Sam Ferguson, The EDM Group, UK: In-house IT - Turkeys and Christmas spring to mind.
 
Frank McKenna, Knowledgeone Corporation, Australia: Certainly not cost and not ignorance of the benefits of SaaS – The market seems to be well educated. In a small number of cases, the barrier is data sensitivity but this becomes an issue in far fewer cases than you would expect. “Not quite ready to go the SaaS route”, would probably be the most common reason given for not choosing the SaaS option in our proposals. The greatest barrier would have to be the organisation’s outsourcing maturity and their propensity to outsource. Often, the business owners are supportive (They want the solution outcomes delivered quickly & cost effectively.) and even IT are positive. However, the organisation may have a default, ‘We don’t outsource here’ culture. 
 
Ron McClellan, Hyland Software, USA: Concerns about SaaS solutions are being raised less and less frequesntly. But, the barriers that do persist have been the same from the beginning: availability (since the organization doesn’t control the infrastructure), privacy and security (What are you, the vendor, doing to keep my data private).
There is also a perception issue, related to legality. This comes up regularly in the international markets with questions like, “If I’m based in Europe, can I store data in the U.S.?” It’s a good question because, with Safe Harbor and Model Contracts, there are limited legal issues.
But, the mistaken belief, even by companies’ internal legal departments, is that that it’s not allowed at all. This takes some time and effort to overcome. In the meantime, we moved to answer it by expanding our private cloud into the EU, and have plans to extend into the Asia/Pacific later this year.
 
 

4) How do you see SaaS impacting the future of ECM and related technology & applications markets? Where does it score best and where does it fall short? 

Leigh Jasper, Aconex, Australia: Construction and engineering firms are ready to manage more of their business information online. We are seeing a rise in the number of bids and tender management being handled in this way. In addition, highly scalable SaaS platforms will come into their own as the industry adopts Building Information Management (BIM), with its 3D drawings and large data files.     
                                                                
Declan McGonigle, SoftCo, Ireland: SaaS is positively impacting the growth of ECM in that companies of all sizes can now reap the business benefits of ECM in an affordable and risk free pay-as-you-go model.   The SoftCo on-demand approach, allows customers to rapidly deploy real, paper based business applications, such as AP, HR and Procurement as well as securely archiving documents. This applications-driven approach is key to the future growth of ECM on the SaaS platform.
 
Wade Weidong, GEONG International, China:The SaaS model will allow more SMEs to enjoy the ECM solution because, in the traditional approach, most ECM solutions are very expensive and  only affordable by larger enterprises. The SaaS model, by contrast, will quite dramatically extend the market segment and gain competitive advantage, because of its low entry point and the on-demand model. Where Saas falls short, is in its lack of ability to be customized. So, the Best SaaS solution offerings work as a specific tool, not necesssarily offering the full range of business solutions.
 
Helmut Fallmann, CEO, Fabasoft, Austria: SaaS has had a significant impact on the future of ECM products. We strongly believe that SaaS and Cloud based ECM services will dominate buying decisions for ECM in the near future.
 
Nick Kingsbury, Objective Corporation, Australia: Customers will retain data centres, running in-house, installed applications for many years to come, but there will be a steady erosion on an application by application basis. That said, some leading customers will be flipping over to pure SaaS earlier, particularly when they are working closely with partners and others on shared services or shared business processes.
 
Dan Dillon, Perceptive Software, USA: The industry is very much in a state of transition. Many customers have SaaS applications in addition to applications hosted on their premises.  ECM integration needs often span both sets of applications - on-premises applications, along with applications hosted in the cloud. This places demands on the ECM system to put content in the context of the customer's business applications, processes and people.  We think our rich integration offerings, ranging from patented approaches to standard web services, enable us to bring unique value to our customers that other ECM systems will not be able to duplicate.
 
Sam Ferguson, The EDM Group, UK: Business units do not care about ECM or technology.  They want business solutions that deliver business efficiencies that give them a strong competitive advantage. Technology in this arena is only part of the answer.
 
Frank McKenna, Knowledgeone Corporation, Australia: After many years of industry hype, customers are now prepared to consider SaaS as a preferred option. The market now accepts it as a ‘standard’ or ‘proven’ alternative. I envisage this level of acceptance growing and I see SaaS playing a much bigger role and becoming a major percentage of our revenue stream within two years.
 
Ron McClellan, Hyland Software, USA: SaaS is acting as a gateway for more organizations to adopt ECM. For example, big capital expenditures and complex network infrastructures are commonplace for on-premise deployments. However, these entry barriers don’t exist with SaaS ECM, as it’s a “pay as you go” model. Additionally, it allows organizations to “stick their toe in the water” with ECM, incorporating it into their businesses at a low cost. Thanks to factors like these, the use of SaaS to deploy ECM will only increase. We are also of the opinion that organizations will seek out vendors which offer a choice of deployment method - Needs and circumstances change, sometimes quickly and dramatically, and being able to change from SaaS to on-premise, or vice versa, is critical.
 
 

5) What do you see as the next model beyond SaaS? How soon is it coming and what are its new implications?

Leigh Jasper, Aconex, Australia: Aconex has pioneered project-based pricing – an agreed fee to use the platform for the duration of a project, without the need to pay extra for licences, training or support. Eliminating these fees has removed some of the greatest barriers to the adoption of the platform in a multi-party project environment. This leads to more information being captured, and more value being delivered to each of the organisations involved. It’s a significant evolution from the licence-based SaaS model, and one that I think will accelerate.
 

Declan McGonigle, SoftCo, Ireland: The next generation model will see the evolution of Private Cloud and Virtual Private Cloud Models. Adoption of this technology is only just beginning but the implications are that customers will enjoy the benefits of hosted, on-demand infrastructure as well as having additional control, performance, security and privacy.
 
Wade weidong, CEO GEONG International, China: Cloud Computing will be next model beyond SaaS and it could be booming in the Chinese market by 2012. The major implications are that the new model will significantly reduce the cost of software operations and break through the limitation of hybrid platforms.
 
Helmut Fallmann, CEO, Fabasoft, Austria: We strongly believe that Cloud Computing is the next model beyond SaaS. To underline this, Fabasoft launched a new product, Fabasoft Folio Cloud, at the beginning of 2010.Fabasoft Folio Cloud enables trusted intercompany collaboration over the Internet.  Team folders can be accessed by registered users anywhere and at any time over the Internet, using various web browsers on different client platforms and smartphones, e.g. iPhone, Blackberry and Android. The web browser user interface supports 15 languages.  Fabasoft Folio Cloud Apps are applications which expand the Fabasoft Folio Cloud product capabilities for secure and reliable intercompany collaboration.
 
Nick Kingsbury, Objective Corporation, Australia: The SaaS model gives the vendor an opportunity to be more involved in the business process and potentially, to offer more services around the application, so the line between what happens in-house and outside becomes increasingly blurred.  The talk of Virtual Organisations that we first heard about 10 years or more ago, will become more of a reality and, as with so many major trends, we get two things wrong at the start: 1) It always takes longer than the pundits forecast and 2) the impact is, in practice, more profound that we originally envisaged.
 
Dan Dillon, Perceptive Software, USA: It won't so much be the "next big thing" as continual evolution.  Customers will continue demanding flexibility and increased options.  We are already seeing some of this now, where customers want to separate the delivery model from the licensing model. In addition to SaaS, we've seen great interest in our subscription, on-premises model - a service based, licensing model for deployment in the customer's data center. We also expect to see an increased interest in records and information management.
 
Sam Ferguson, The EDM Group, UK: Larger companies see the need to concentrate their efforts around the true reason for their existence i.e. Not IT or back office processing.. Therefore, they will look to outsource more of these functions. They also want to reduce the number of suppliers. Therefore, there will be a need for suppliers to deliver a wide range of services across the document management portfolio.

Frank McKenna, Knowledgeone Corporation, Australia: I think once organizations get used to outsourcing the hosting and some administrative responsibilities, (i.e., configuring new users, installing updates, etc) they will gradually outsource more and more, which will mean that ECM companies such as ourselves, will need to partner with other companies, including contract personnel, offsite storage and transport companies to provide a total ECM service. We will then need to invent a new term and acronym – something catchy to describe an extended SaaS service that extends to all related activities – We could fall back on ‘outsourcing’ but that is an old and tired term; we need a new term. Maybe you could ‘coin’ one and become famous?

Ron McClellan, Hyland Software, USA: We see a rapid period of growth for the SaaS model, as more and more companies come to understand the cost and operational advantages. After all, why do things for more money – or worse, don’t do them at all – when lower cost, quality alternatives are available?

We also think use of “public cloud” and “utility computing” will expand. As we get past the concerns of where data resides, where computing is occurring and a continued loosening of the need to “control” the infrastructure by internal IT organizations, companies will view the source of their computing power as irrelevant – just as we feel now about the source of our electrical power. All we really want it to do is work when we flip the switch - as these methods allow us to do. For companies like us, we see a need for a mixed model, one that has both private and public cloud offerings. Perhaps some files are on the private cloud. Or maybe public cloud resources are leveraged only during peak seasons or end-of-the-month processing.

The key to everything is building efficiencies, providing quality service and saving money. Every company in the world wants to do these things, and technology that makes it possible is always going to have a market.