I recently recorded a SaaS-related on-demand webinar with Patrick Bolger of Hornbill and as with my recent blog on service catalog with ServiceNow it seemed an easy opportunity to turn some of my slides into a quick-and-dirty blog (aren’t they all?).

Much has been said about the benefits of “SaaS for IT service management (ITSM)” …

For many organizations, the key benefit of SaaS is its simple, subscription-based pricing model that provides a lower and consistent level of expenditure which is Opex rather than a Capex investment – highly suited to those organizations wishing to invest limited Capex into business innovation projects rather than into IT. I deliberately haven’t stated that SaaS is cheaper as “it depends” ... Many tools have a “breakeven point” in the three to four year timeframe where SaaS becomes more expensive to customers than on-premises.

This simplicity of pricing can also be viewed from a value-for-money perspective, in that a per-seat subscription will usually cover access to capabilities across multiple ITIL (or ITSM) processes rather than the traditional need for organizations to buy multiple licenses across multiple ITSM products (or modules), giving an organization the freedom to increase its ITSM maturity without extra cost (unless additional people need access to the solution).

The third main benefit is also cost-related – the effort and associated costs required to achieve ready-to-use status for the tool. Whether it is the time to initially deploy (and thus to start to realize value from what is a significant IT investment) or the upheaval involved in upgrading to the next release of the solution.

A SaaS-delivered ITSM tool only requires a Web browser and an Internet connection to function so scarce IT resources can be redirected away from IT-internal systems to focus on the delivery of business-critical IT services. A benefit that also resonates strongly in a service integration model where the SaaS-delivery and the subscription model make it easier to add in new suppliers and give them access to the tool’s capabilities.

But, in reality, are these not just things we are concerned about when buying software per se whether SaaS or on-premises?

So how important is delivery model?

Stats from the Forrester Forrsights Software Survey Q4 2011 (“How important are the following criteria to your company when selecting software products?”) show delivery model in just seventh place:

1. Features and functions (92%)
2. Price (86%)
3. Simply manageable (77%)
4. Scalability/performance (71%)
5. Integrations with other software applications/tools (68%)
6. Customizability (58%)
7. Type of software deployment (44%)
8. Vendors brand/market position (30%)
9. Part of an application of office suite (23%)

The top three criteria are probably what we would have expected and SaaS is definitely not the “default solution for all” with only 12% with a strategy for going fully-SaaS:

Taking a more critical look at SaaS

Remember that SaaS is only a delivery model – whatever you do please don’t put it ahead of functional needs. I’ve written before that “SaaS is a red herring.”

So consider how SaaS-delivery is going to help:

• Your ITSM operations – it’s not a silver bullet
• Your customers.

Consider the key risks:

• Security – although the SaaS provider’s data center and operations are probably more secure than yours
• Availability – but the service uptime might far exceed that of the in-house, on-premises offering
• Scalability – check with the vendor ... What is its largest customer install? That’s the reality not the theory
• Integrations – what do they currently have “out-of-the-box”? What would it cost? Ask existing customers about successes and failures?
• Data-location in light of legislation
• Data portability in light of discontent
• Business continuity – what would you do if the SaaS provider goes under?

And do you actually need a SaaS tool to meet requirements around:

• Cost and Capex
• Functionality
• Ease of use
• Ease of change and upgrade
• Moving at the speed that the parent business requires them to (or faster)?

Selecting a SaaS tool

It requires the same rigmarole as with selecting an on-premises tool (Why Is Buying An ITSM Tool Like Buying a Car?) plus in the context of SaaS:

• Watch out for commercial restrictions
• Work out what happens if SaaS doesn’t work for you or if your requirements change
• Remember what you really need from an ITSM tool; SaaS or otherwise.

There is a lot of choice …

There are a lot more vendors offering “SaaS for ITSM” than you think, here are a selection of those I have been speaking with (in alphabetical order): Axios Systems, BMC Software, CA Technologies (Nimsoft), Cherwell Software, EasyVista, helpLine, Hornbill Systems, HP, IBM, LANDesk, LiveTime, ManageEngine, Serena Software, ServiceNow, Sunrise, Sunview, SysAid, TOPdesk, Vivantio, and Zendesk (“Zendesk for IT”). A quick rule of thumb here is how much emphasis the vendor places on SaaS on its website – if it’s difficult to find …

UPDATE: The Forrester SaaS ITSM Tool Market Overview: Who Is Where With What

If you would like to view the on-demand webinar it’s here (registration required).