Find below a variety of Saugatuck Strategic Perspectives, expanded 4-7 page "perspectives" on key industry trends, evolving market opportunities, and broader competitive / market impact, often supported by fact-based research. Strategic Perspectives retain our "Net/Net" philosophy, guided by a "So what?" framework, with a "Net-impact" summary, including implications and recommendations for user and vendor marketing, strategy and sales executives.

In addition to viewing the list of Perspectives below, organized by date, please take advantage of our Advanced Research Search capability to input a free-form text search, or the ability to search by author, by date, or by topic area -- or visit our Research Library by Topic.

08-05-08 Saugatuck Insights on SaaS and On-Demand Infrastructure Adoption (C. Burns, M. West, 6 pages, MKT-491, $$$)

User IT organizations are being challenged to support increasingly dynamic business processes. The business users they support are demanding new functionality delivered very rapidly without significant budget increases. As a result of these challenges, Software-as-a-Service (SaaS) and On-Demand Infrastructure are rapidly becoming part of the mainstream in both large and smaller organizations.

Interestingly, the size of the user organization appears to have a definite influence on:

In this Strategic Perspective, we provide insights into the emerging patterns of SaaS and On-Demand Infrastructure adoption, the resulting opportunities for vendors, and some key guidance for adopters of SaaS offerings.

07-31-08 Open Source Vendor Discussions: Highlights and Insights, 2008 (B. Guptill, 5 pages, MKT-290, $$$)

Saugatuck is in the midst of its annual Open Source market research study, to be published in October 2008. As part of this research, we are interviewing 50 vendors, communities and associations providing open source software. These sessions are providing us with useful insights regarding business models, customer expectations, and competitive positioning, as well as gathering their insights on important market issues and trends.

07-30-08 Heat Maps: Regional SaaS Provider Selection Preferences (B. Guptill, 6 pages, MKT-489, $$$)

User executives select SaaS providers based on a wide range of factors, which often vary according to company size, industry, and location. Saugatuck research indicates that most user executives rely on very similar technology factors in selecting SaaS providers.

However, the importance of different business factors in provider selection varies significantly based on regional geography – which in turn can indicate the role and importance of SaaS to enterprise business in different markets.

07-22-08 CIO Leadership Imperatives for SaaS Transition and Management (S. Medina, B. Guptill, 6 pages, STR-484, $$$)

Software as a Service (SaaS) provides user firms with expanded opportunities and capabilities, often at lower costs than could be attained via on-site software offerings.  But the rapid growth in range and depth of SaaS offerings, with an attendant growth and variety in SaaS providers, brings significant IT management challenges for user-firm CIOs.  This Strategic Perspective provides insights on how to overcome those challenges via five management imperatives for SaaS.

07-11-08 Revisiting Multi-Tenancy in the Face of Competing Alternatives (M. West, 5 pages, MKT-482, $$$)

A debate has been simmering around the issue of multi-tenancy and whether on-demand solutions that do not use it are truly Software-as-a-Service (SaaS) or, instead, a reversion to the ASP hosting model. 

06-30-08 Keep the Big Picture in Mind: Best Practices in SaaS SLA Management (C. Beckham, 5 pages, BP-479, $$$)

SLAs are important tools for SaaS vendors as well as their enterprise users.  As SaaS solutions expand from department-wide to broader enterprise-wide usage – and as SaaS solutions are increasingly used for mission-critical business functions – SaaS SLA terms and conditions become increasingly important.

As enterprise users gain more experience with SaaS solutions, SLAs should be reviewed and possibly be revised to ensure that all needs and expectations are met – for users as well as for SaaS vendors.

06-30-08 Ready or Not? Surprising User Data on Enterprise Business Applications (B. Guptill, 5 pages, MKT-478, $$$)

Saugatuck’s latest user research regarding plans for enterprise SaaS applications deployment yields some intriguing insights into the realities of “enterprise-ready SaaS.” While there are clear top- and bottom-ranked categories when it comes to what users have in place and plan to deploy, a vast middle ground suggests either ambivalence, or a broad-based, hybridized (SaaS plus on-premise) future for enterprise IT.

06-27-08 Operational Issues in SaaS Transition: More than Meets the Eye (C. Burns, M. West, 5 pages, STR-477, $$$)

Software vendors must overcome multiple challenges when preparing to enter the Software-as-a-Service (SaaS) arena. Most of the challenges can be grouped into the following five categories:

06-26-08 Research Agenda: Key Issues for Open Source Vendors and Users (B. Guptill, A. Perrin, 4 pages, MKT-476, $$$)

Open source is at a key inflection point between user expectations and vendor capabilities. User IT and business executives are looking to trusted vendors for guidance while open source is appearing, often unbidden and unplanned, all around them. Meanwhile, vendors – even the most established open source providers – are struggling with unprecedented demand from unexpected quarters and uneducated buyers.

05-30-2008 Clearing the Air on Cloud Computing: Insights from Ten CIOs (B. McNee, B. Guptill, C. Burns, M. West, 6 pages, MKT-469, $$$)

The concept of Cloud Computing is both widespread and vaguely defined. It’s becoming more generally accepted that the evolution of SaaS will lead users into Cloud Computing in a variety of ways. But while definitions of Cloud Computing abound, consensus about what it is and will become is still elusive.

05-30-2008 Heat Maps: On-Demand Infrastructure Usage Indicates Strong Cloud Computing Use and Rapid Growth (B. Guptill, 5 pages, MKT-468, $$$)

Data from Saugatuck’s latest SaaS user survey indicates a surprisingly powerful current presence, and solid growth, in almost all types of on-demand infrastructure services.  Saugatuck has mapped the services according to a “heat index” that enables quick perception and comprehension of relative growth over time.

05-28-08 SaaS User Best Practices: Toward the Development of More Formal, Sophisticated Management Policies (C. Beckham, 5 pages, BP-467, $$$)

Saugatuck’s latest SaaS research, which includes interviews with more than two dozen SaaS user executives, indicates that even the most experienced SaaS user firms have not established formal SaaS governance or similar management programs. 

05-09-08 SaaS and User Satisfaction: Enterprise-Ready, or Not? (M. West, 5 pages, MKT-463, $$$)

While SaaS users show high degrees of satisfaction with SaaS solutions overall, satisfaction varies when it comes to specific attributes of the SaaS experience. Users report higher satisfaction with Wave I attributes (or standalone solutions), and lesser satisfaction with more sophisticated Wave II and III attributes. This has important implications for SaaS providers when it comes to being “enterprise ready.” 

04-30-08 The Business Appliance: Flexible Functionality for a Broad Range of Computing Needs (C. Burns, M. Koenig, 6 pages, MKT-461, $$$)

Regardless of company size, most IT organizations are tasked with multiple common objectives.  Ongoing Saugatuck research has shown that chief among these objectives are: improve service levels, maintain security, reduce costs, and deliver new or enhanced functionality to support their end users’ dynamic business processes. As the IT organizations strive to meet these objectives, they are embracing solutions ranging from packaged applications which run on their internal infrastructure, to Software-as-a-Service (SaaS) offerings which run on a provider’s infrastructure.

Any new solution poses two common challenges for any IT organization:

Recently, appliance computing (see Note 1) has been gaining popularity and credibility as a means of addressing both challenges. As users are finding, the IT appliance is flexible and can deliver a broad range of business functionality (see Strategic Perspective IT Appliances: Too Good to Ignore?, MKT-442, 12Mar08).

04-29-08 Saugatuck SaaS Research: Waves and Platforms in the Cloud (M. West, B. Guptill, 5 pages, STR-458, $$$)

With SaaS now part of mainstream IT and business, users are beginning to see beyond the baseline abilities of the first wave of SaaS. Many are ready to leapfrog beyond the emerging and consolidating second wave (with its focus around integration), to SaaS’ third wave of workflow-enabled business transformation.  Beyond the third wave is cloud computing, built on on-demand infrastructure that ushers in the fourth-wave – a post-SaaS transition to measured, monitored and managed business processes.

04-22-08 MySQL Conference 2008: A Sense of Arrival and Accomplishment for Open Source Software (B. Guptill, 5 pages, STR-455, $$$)

Saugatuck Managing Director Bruce Guptill participated in MySQL’s annual conference in Santa Clara, CA last week.  In speaking with user and vendor conference attendees, he came away with a strong sense that the open source software movement has accomplished the position of being “just another source” for critical software.  It’s a key, strategic milestone for MySQL in particular and for open source software in general. Open source software has, to an extent deemed improbable only a few years ago, “arrived” as a source of competitive advantage for both users and vendors.

04-11-08 SaaS & Outsourcing: Solutions For IT Processes, Too (MKT-453, C. Burns, 6 pages, $$$)

User IT organizations are being tasked to provide support for increasingly dynamic business processes. These new functions are expected to be delivered very rapidly and without significant budget increases. Ongoing Saugatuck research shows that Software-as-a-Service (SaaS) offerings are increasingly being selected to achieve these objectives. Monitoring and managing services delivered by SaaS is challenging IT organizations to evolve from managing IT infrastructure assets, to managing services which support their users’ business processes.

At the same time, user IT organizations are also being asked to reduce the costs for existing infrastructures. To accomplish this, IT organizations have turned to Open Source software, Service Oriented Architecture (SOA), and outsourcing some IT functions such as Help Desk. Recently, various forms of IT virtualization have been delivering substantial cost reductions. (See Saugatuck Report, “The Many Faces of Virtualization: Understanding a New IT Reality”, SSR-420, 28Dec07.)

More recently, user IT management organizations are recognizing that SaaS offerings and service providers can impact the costs of processes within IT such as security or systems management. Possibly more importantly, the adoption of SaaS and services offerings for IT processes is enabling IT organizations to meet the challenge of focusing on their users’ business processes.

03-31-08 Is Open Source Already Routine? Or Misunderstood by Vendors? (STR-450, B. Guptill, 5 pages, $$$)

Saugatuck’s current research among enterprise software providers indicates that many, if not most, see open source software as “just another piece of business.”

This is a shocking change from 2007, when Saugatuck interviews and briefings with software vendors worldwide indicated that most were struggling to understand the demand for open source software, the role of open source within their portfolios, and the most effective business models for profiting from open source.

Within the past 12 to 18 months, many software vendors have moved from fear to aggression, pursuing open source development firm acquisitions, incorporating open source code into offerings throughout their portfolios, and looking for (or planning) open source  offerings. Saugatuck sees two likely negative results of this:

1. To move too quickly from uncertainty to embrace bodes ill for many if not most vendors and their customers. A too-aggressive adoption and deployment of any technology leads to a lack of coordination across products and partners, incomplete offerings, and a lack of adequate support, all of which lead to unhappy customers and partners. 

2. At the same time, a surprising number of software vendors report to Saugatuck that they feel they have “this open source thing under control,” as a VP of technology and business strategy for one of the world’s largest software firms put it recently. Several already report open source as “just another code source” that is being integrated into their development operations. But when pressed for details regarding strategies and management resources dedicated to coordination and management of open source development and licensing, few have been able to report any.

03-31-08 Enterprise-grade Web2.0: An Uphill Climb (MKT-449, M. Koenig, C. Beckham, 6 pages, $$$)

Enterprise-grade Web 2.0 – i.e., web-services-based collaborative and social computing for the enterprise – is getting a tremendous amount of visibility in the trade (and even the mainstream) press.  Vendors large and small – new and established – are beginning to invest in Web 2.0 solutions targeted for the enterprise.  Many of these investments are around establishing a platform for users and solution providers to build new applications using some or all of the components of Web 2.0.

Saugatuck research indicates that bringing social computing into the enterprise through the “front door” – i.e., formally, via IT departments – may be more difficult than anticipated.  Many companies already have corporate policies banning one or more of the solutions that comprise this category, for either productivity or security reasons.  Other companies do not have IT management polices and organizations that will be flexible enough to deploy and optimize these solutions.

It will not be enough for vendors to just create a “enterprise-ready” platform upon which companies can build on-demand social computing applications.  They will also have to provide those companies with help in building the business case for, and managing the new IT environment created by, Enterprise-Grade Web 2.0.

03-18-08 Notes from the Road: SaaS Market Readiness & Growth in Asia-Pacific (MKT-444, B. Guptill, 8 pages, $$$)

Saugatuck Managing Director Bruce Guptill recently spent two weeks traveling in India , Malaysia, China and Australia. In addition to participating in a number of briefings, Saugatuck had a chance to dialog with 26 independent software vendors, value-added resellers, and managed services providers in a variety of one-on-one interactions and meetings.  His discussions indicate that while traditional software and services providers face many similar issues worldwide when transitioning to software-as-a-service (SaaS), regional concerns highlight key differences between the Asia-Pacific region, Europe, and the U.S., and indicate that the development, deployment, and adoption of SaaS in the region is likely to lag the U.S. and Europe by as much as two-to-three years.

03-12-08 IT Appliances: Too Good to Ignore? (MKT-442, M. Koenig, C. Burns, B. Guptill,  6 pages, $$$)

Vendors of IT appliances claim their offerings can provide substantial relief to several of the challenges confronting typical user IT organizations. Their claims sound much like those of many SaaS providers, in that appliances can:

At the same time, hardware vendors are eyeing the same IT infrastructure challenges and evaluating ways that packaged application or middleware functionality could provide competitive differentiation.

This Strategic Perspective examines the forces that are driving the increase in popularity of both real and virtual appliances on the part of both users and vendors. In a follow-up Perspective, we will look at how appliance computing is evolving, and describe the different types of appliances that we envision taking root in the market. 

02-29-08 x86 Virtualization: Treating Symptoms While Awaiting a Cure – Part 2 (STR-440, C. Burns, 5 pages, $$$)

x86 server virtualization treats some important symptoms of the illness of IT infrastructure sprawl, but does not cure the illness itself – or the underlying cause. This Strategic Perspective is the second of a two-part series on the effects – and effectiveness – of x86 server virtualization on this common and growing affliction.

The first part, "x86 Virtualization: Treating Symptoms While Awaiting a Cure – Part 1", STR-439, 29Feb08, articulates the challenges (i.e., the symptoms) confronting typical x86 infrastructures. In this Perspective, we dig into the underlying illness of x86 infrastructures and articulate how current x86 virtualization tactics and strategies both hit and miss curing that illness.

02-29-08 x86 Virtualization: Treating Symptoms While Awaiting a Cure – Part 1 (STR-439, C. Burns, 5 pages, $$$)

Despite broad press and analyst coverage focused on IT virtualization, there is one facet that has not been probed deeply enough. While virtualization’s benefits are real and are typically substantial, they do not directly address the fundamental problems which underlie x86 server infrastructures.

In this Strategic Perspective, the first of a two-part series, we articulate the challenges confronting typical x86 infrastructures and how virtualization addresses many of them. The second Strategic Perspective, "x86 Virtualization: Treating Symptoms While Awaiting a Cure – Part 2", STR-440, 29Feb08, uncovers the underlying illness of x86 infrastructures and articulates how virtualization both hits and misses resolving that issue.

02-21-08 Consideration (and Selling) of Open Source Software Varies by Industry (B. Guptill, 4 pages, MKT-437, $$$)

A key step toward widespread adoption of open source software is its consideration and evaluation by firms planning to acquire new servers, systems, applications, databases or software tools. Ongoing review of Saugatuck user data regarding open source adoption indicate significant differences between industry segments when it comes to consideration and evaluation of open source software for these critical areas of IT and business. Retail leads user adoption, while Life Sciences lags.

02-06-08 A Chat with Revevol’s Louis Naugès and Laurent Gasser on European SaaS Market Adoption (B. McNee, 6-pages, INT-433, $$$)

One of the great pleasures of my recent business trip to Europe was meeting with two senior consultants in Paris one evening over dinner – Louis Naugès and Laurent Gasser – with whom I had a far-ranging and interesting conversation focused on key trends in SaaS, both in France and across Europe .

01-31-08 SaaS Platforms Evolve to Embrace Cloud-Based Development (M. West, 5-pages, MKT-432, $$$)

Cloud-based development is suddenly a viable alternative to on-premise development targeting traditional computing platforms.  Salesforce is one of the most visible platforms enabling cloud-based development, along with NetSuite. And the trend is growing to include a wide array of platform players including, for example, Bungee Labs, Coghead, Comrange, DreamFactory, Facebook, Iceberg on Demand, and IT Factory.

SaaS platform capabilities have evolved through three stages:

1) Integration - ecosystem partner integration via APIs and integration of SaaS solutions with on-premise applications, 
2) Customization - customization of SaaS solution UI and logic via APIs and scripting toolkits,
3) Development - cloud-based development of enterprise applications and SaaS solutions.

The next stage of SaaS platform evolution will extend those same three capabilities – integration, customization and development – to enable and enrich SaaS workflow.

01-29-08 Virtualization Saugatuck Planning Positions – Part 2 (C. Burns, B. Guptill, 6 pages, SPP-429, $$$)

Virtualization of several key aspects of IT – servers, mainframes, storage, networking, and more – is rampant and growing because it delivers significant cost improvements over most existing IT implementations. But virtualization blurs boundaries between technologies and responsibilities, and extends well beyond what most IT and business executives consider as they plan and invest in it.

Saugatuck’s latest Strategic Research Report ("The Many Faces of Virtualization: Understanding a New IT Reality," SSR-420, 28Dec07) presents insight and guidance for users and vendors regarding the many forms of IT virtualization. The Strategic Research Report includes a series of Saugatuck Strategic Planning Positions (SPPs) that help users and vendors plan for changes in virtualization use and management.

01-24-08 Understanding Master Brands: A Saugatuck Framework for IT Ecosystem Positioning and Power (B. Guptill, 8 pages, STR-428, $$$)

Practically every market for hardware, software, and services has the following hierarchy:

Understanding how these hierarchies work, and especially the relationships within them, is key to developing and refining IT vendor market strategy, from competitive offerings to alliances and channels.

Developed and refined over the past five years, Saugatuck’s "Master Brand" IT Vendor Ecosystem Scenario has been used by leading IT systems and software vendors worldwide in the development of strategies for markets, offerings and partners/channels. In this Perspective, Saugatuck presents and discusses its IT Vendor Ecosystem Scenario. This includes defining and explaining the term Master Brand, positioning how different technologies and markets can have one or more Master Brands, and how positioning as a Master Brand influences relationships between user and vendor management.

01-18-08 Virtualization Saugatuck Planning Positions – Part 1 (C. Burns, B. Guptill, 4  pages , SPP-426, $$$)

Saugatuck’s latest Strategic Research Report ("The Many Faces of Virtualization: Understanding a New IT Reality," SSR-420, 28Dec07) presents insight and guidance for users and vendor regarding the many forms of IT virtualization. The Strategic Research Report includes a series of Saugatuck Planning Positions (SPPs) that help clients plan for changes in virtualization use and management.

12-31-07 Web 2.0 in 2008: First the Blueprint, then the Foundation (M. Koenig, 6 pages, MKT-421, $$$)

While Web 2.0 has garnered a lot of attention in the media, and investment by solution providers, in 2007, there is still work to be done before it can be considered enterprise-grade.  Chief among the inhibitors to adoption is that the "blueprint" required by enterprise IT executives – the implementation roadmap and business case – are not yet complete.  Further, when they are complete, they will look very different from those used to justify and manage earlier generations of information technology.

Saugatuck believes that – following the pattern established by the adoption of SaaS in the enterprise – Web 2.0 will likely make a name for itself by facilitating interactions between customers and employees in the CRM and HR arenas.  Just as solutions in those areas proved the worth of SaaS, we believe that Web 2.0 will first prove its business worth in those areas as well.

Because leveraging Web 2.0 by definition necessitates a wholesale change in the way companies collaborate, communicate and negotiate, IT managers must take a different approach to introducing it into the enterprise, which includes creating Web 2.0 playgrounds and preparing to manage the metadata explosion.  This new approach is essential to Web 2.0 success, and represents opportunities for vendors in the Web 2.0 ecosystem to establish themselves as credible solution providers.  Similarly, vendors who can help their customers to build the new business case for enterprise-grade Web 2.0 will also be better positioned for long run success.

12-27-07 IT Disruptors Bring Management Challenges and Opportunities (C. Burns, 8 pages, STR-418, $$$)

User IT organizations are simultaneously being driven to reduce costs and to support increasingly dynamic and agile business processes. As a result, IT organizations are increasingly adopting one or more fundamental changes such as Software-as-a-Service (SaaS), Service Oriented Architecture (SOA), Open Source software, and a virtualized or Utility Computing infrastructure.

Earlier this year Saugatuck identified these "technology disruptors" as presenting both capabilities and problems beyond the scope of what most user enterprise IT management organizations, systems, practices and skill sets can adequately address (see IT Management Evolution: All Roads Lead to Rome, STR-372, 31Jul07, and IT Management: Disruptive Influences Driving Four Stages of Evolution, RA-390, 26Sep07).

12-18-07 Open Source in 2008: Over the Threshold and Into Growth Mode (B. Guptill, 5 pages, MKT-416, $$$)

Saugatuck expects 2008 to be a "threshold" year, opening up vastly larger opportunities and activity in open source adoption and deployment by both vendors and users. This includes the rapid growth in adoption by user enterprises, beginning of widespread standardization within user environments, growth of governance, and software vendors begin understanding how best to profit from open source.

12-18-07 On the Outskirts of Wave III: SaaS Platforms Proliferate in 2008 (M. West, 5 pages, MKT-415, $$$)

Through Waves I and II, as SaaS solutions spread across the full spectrum of business, technology and consumer needs, the Platforms these providers develop, or license and extend, have become ever more varied to address those needs, including integration, customization, data pipes for BI or for data sharing, data storage, content management, workflow, and development tools or APIs.  On the verge of Wave III in 2008, we share insights gathered through deep-dive interviews with leading SaaS providers and Ecosystem partners concerning SaaS Platforms, Marketplaces and Ecosystems.

12-14-07 Open Source Adoption Path II: Mapping Open-source Business Software Growth Through 2010 (B. Guptill, 6 pages, MKT-414, $$$)

Last month, we looked at user adoption plans and data to frame a typical roadmap of enterprise-level open source adoption.  This month, we look in more depth at specific user business software categories, to see which will lead and which will follow on the path to open source.

To paraphrase previously-published Saugatuck open source software research, open source is already everywhere within user enterprises. Our latest research indicates that open source code is already embedded in between one-third and one-half of existing user software.

But beyond its incorporation as lines of code in various applications and operating systems, open source also accounts for much of the growth in core user software categories.  Saugatuck research and analysis indicates that open source software’s presence will increase from approximately 10 percent of key user on-premise software in 2007, to between 15 percent and 20 percent by 2010. That includes the following key enterprise software categories:

11-30-07 As the CFO Evolves (Again), Vendor Opportunities Await (Again) (M. Koenig. C. Burns, M. West, 6 pages, STR-411, $$$)

Saugatuck Research into Business Intelligence and Corporate Performance Management suggests that the role of the CFO in the Enterprise is evolving yet again.  In the past two decades, we have observed the CFO’s role grow layer by layer

With each of these shifts, the information technology capabilities have also evolved, and new investment in IT has followed.  This Strategic Perspective summarizes the changes over the last two decades, and describes the shifts in business computing that accompany them – the most recent of which Saugatuck is calling Unified Performance Management. 

11-28-07 Open Source Adoption Path I: From Fringe to Core IT in Five Years? (B. Guptill, 7 pages, MKT-410, $$$)

Saugatuck’s 2007 research study on user enterprise adoption of open source software indicates increasingly predictable user paths to enterprise-wide open source presence. A typical pattern of open source adoption and deployment moves from implementing enhancements to existing legacy systems to using open source as foundations for core IT in as little as three to five years.   More than a third of user executives worldwide – including IT executives – expect to deploy open source software to account for at least 25 percent of core, enterprise and data center IT foundations within three years.  This is a strong indication of open source software’s ability to change user enterprise software acquisition strategies – and to disrupt enterprise software vendor business.

11-27-07 Managing On-Premise Products in the SaaS Transition: Kadient (M. West, M. Koenig, 5 pages, MKT-408, $$$)

As part of its ongoing series looking at the transition from traditional ISV to SaaS solution provider, Saugatuck delved further into the experiences of Kadient, which has recently completed its transition from ISV to SaaS provider, while not abandoning its premise-based product offerings. Nevertheless, this SaaS transition required changing the company’s operating model, platform, sales model, internal culture and its organization.

In this Strategic Perspective, Saugatuck considers how Kadient addressed the five key challenges that every company must consider when transitioning to SaaS (e.g., economic, technological, operational, organizational and cultural). As ISVs make plans for this journey, each must prepare to meet these five challenges to assure that the transition from ISV to SaaS provider will be successful. 

11-21-07 US Will Lead Europe in Core Software Open Source Presence through 2012 (B. Guptill, 6 pages, MKT-406, $$$)

Despite business and IT industry press coverage of Europe as a region leading in open source adoption and use, data from Saugatuck’s recent user executive survey of open source software use and presence indicates that US firms are much more likely to adopt and utilize open source alternatives for core enterprise software categories over the next three to five years.

10-30-07 Open Source Software Governance: Smaller Firms at Risk (B. Guptill, 5 pages, MKT-401, $$$)

Continued analysis of Saugatuck's ongoing open source user survey data indicates that smaller firms are placing the greatest business importance on open source software – but larger firms are more likely to govern it more effectively. This could place smaller firms at risk of losing the competitive advantages of open source software.

10-29-07 IT Management: Necessary Evil to Business Process Necessity (C. Burns, 6 pages, STR-400, $$$)

Historically, IT management was viewed as an arcane art somewhere between esoteric science and mysticism. This resulted from the state-of-the-art of data processing technology which demanded a pathologic focus on the components and infrastructures. IT staff worked on exorbitantly expensive equipment in special glass-walled rooms and spoke in strange terms such as "kilobytes" and "CPU seconds".

Much of the mystery is now gone from IT. And, many IT management organizations have evolved to focus on partnering with their business unit "customers". But, while business managers today appreciate the impact that IT management can have on their individual objectives, IT management is typically still perceived as a "necessary evil".

As previously articulated (see IT Management Evolution: All Roads Lead to Rome, STR-372, 31July07) continuing and expanding adoption of a series of disruptive influences in IT and business – Software-as-a-Service (SaaS), Service Oriented Architecture (SOA), Open Source software, and a virtualized or Utility Computing infrastructure – are necessitating evolution in IT management. The impact of these disruptive influences is magnified by the increasing dependence of business processes on IT.

The challenge for IT managers is to bring their processes and staffs into the spotlight and be recognized as a valuable business necessity by becoming a key player on the business service management stage. The alternative is to be caught in the headlights and become road-kill along the business process management highway.

10-19-07 It's a Small (Business) World: Smaller Enterprises Lead Open Source Expectations (B. Guptill, 5 pages, MKT-397, $$$)

Summary Analysis of Saugatuck survey and interview research for our recently-released open source software adoption and business study indicates that smaller enterprises – especially those with less than $100M in annual revenues – are most likely to see Open source as core business software, as a reason for buying specific solutions, and as a differentiator between vendors. 

10-05-07 DreamForce '07 – Inflating the SaaS Balloon (B. Guptill, M. West, 6 pages, MKT-393, $$$)

Saugatuck Technology attended DreamForce 2007, Salesforce.com's annual user, partner, media and analyst event. Our participation included general sessions, media/analyst sessions, one-on-ones with partners and users, and informal discussions with attendees of all types.

Key announcements included Force.com (platform-as-a-service) and VisualForce (user interface-as-a-service), as well as Salesforce Content and Salesforce Ideas (both part of the Winter ’08 release of its’ core CRM solution). While these initiatives continue to position Salesforce as a market leader and industry innovator, Salesforce will need to be careful not to overemphasize "the next big thing" in favor of delivering the goods on previous promises made. 

09-28-07 DreamForce '07: Customer Interviews Indicate the Strength of Salesforce and SaaS (B. Guptill, 6 pages, EVT-391, $$$)

More than 7,000 users attended Salesforce's annual DreamForce '07 user and partner conference at the Moscone Center in San Francisco, September 17 - 19, 2007.  Attendance was up more than 25 percent from 2006's 5000 attendees. Salesforce made several interesting announcements, most notably regarding its Force.com "on demand" SaaS development platform service – which the company has labeled "platform-as-a-service."  It also laid out initiatives for expanding Salesforce and AppExchange presence within customer enterprises, including the "Ideas" platform/application for intra-enterprise collaboration and communication.

As we did in 2006, Saugatuck attended DreamForce, participating in several analyst and VIP events, and meeting with SFDC executives, partners, and other analysts. And as we also did in 2006, Saugatuck interviewed Salesforce customers regarding SaaS (and Salesforce) benefits, Salesforce functionality, future adoption plans for SaaS, and attitudes toward multi-tenancy and data privacy issues. 

09-24-07 Real or Virtual: All Infrastructures Must be Managed (C. Burns, 5 pages, STR-389, $$$)

IT virtualization is not only a hot topic, it is an important step in what Saugatuck sees as the increasing "Hybridization" of the typical IT environment. "Hybrid" IT environments combine in-house and outsourced technologies, systems, and services to enable more flexible business environments – and, just as importantly, enable the reduction of IT management costs. Virtualization is also a cornerstone of the still-nascent "IT utility" as described in previous Saugatuck research (see IT Insights and Trends: On the Road to Utility Computing - How Far is Far Enough?, STR-321, 22Feb07).

09-21-07 Five Challenges in Navigating from Traditional ISV to SaaS Provider: Strategic Learning from Concur Technologies (M. Koenig, M. West, 5 pages, STR-388, $$$)

As part of Saugatuck’s ongoing software-as-a-service research agenda, we recently delved into the experiences of Concur Technologies which is one of the first ISVs to successfully make the transition from traditional ISV to SaaS provider – and is now reaping the rewards of their transition to SaaS in the both the marketplace and in financial markets.

As this Strategic Perspective illustrates, earning these rewards required changing the entire company’s operating model. In studying Concur’s experience, Saugatuck identified five challenges that it had to address successfully -- challenges that every company must consider:

As more ISVs embark on this important and strategic journey, each must recognize that unless it is prepared to meet the five challenges note above, the transition to SaaS will be unsuccessful, and the investment will not yield the promised reward.

09-13-07 Open Source as Differentiator: User Expectations vs. Vendor Reality (B. Guptill, 5 pages, MKT-386, $$$)

Today, between 10 percent and 15 percent of user enterprise executives see the inclusion of open source as an important differentiator between vendors and software offerings, or as a key reason to buy a specific solution or work with a specific vendor. By YE 2010, an average of 40 percent of user enterprise executives expect open source to be a differentiator or key reason for buying; and those numbers increase to an average of 70% by YE 2012.

08-31-07 SaaS Marketplaces: Terminology, Taxonomy and Market Growth (M. West, B. McNee, 6 pages, MKT-383, $$$)

SaaS ecosystems, SaaS marketplaces and SaaS integration platforms are often used terms, but equally often misunderstood. We define these terms and present our taxonomy of five distinct types SaaS marketplaces:

We discuss the evolution of SaaS ecosystems, SaaS marketplaces and SaaS integration platforms through the three waves of SaaS evolution, and we project the size of SaaS marketplace revenue opportunity through 2011.

08-30-07 Reader Q&A: SCO-Unix-Linux Impacts on Microsoft, HP, Sun and Novell (B. Guptill, 4 pages, QA-382, $$$)

Last week, Saugatuck published a Strategic Perspective looking at the likely effects of the recent SCO-Novell judge’s decision (see Saugatuck Strategic Perspective MKT-379, "Debacle, Decision, and Driver: SCO-Novell-Unix-Linux Open Source Market Impacts," 22Aug07). Since its publication, we have received some interesting questions regarding the situation, the players, and possible changes and outcomes. We respond to these questions in this Q&A Perspective.

08-29-07 Key Lessons Learned, Part 2: Financial Considerations in Navigating from Traditional ISV to SaaS Provider (M. Koenig, B. McNee,  4 pages, MKT-381, $$$)

Of the thousands of established traditional license ISVs worldwide, Saugatuck estimates that fewer than fifteen percent are actively transitioning or already transitioned to a SaaS-based business model, with another forty percent or more in a variety of planning stages.

As we have previously written, this transition requires a fundamental rethinking of the entire business, but in the end, reaping the financial rewards is dependent on understanding and planning for specific financial considerations. Our experience with ISVs who have completed the journey is that there are three key financial considerations that must be planned for and managed in order to successfully make the transition:

Proper planning and management will reduce the risks inherent in making such a massive change to the ISV. 

08-24-07 Debacle, Decision, and Driver: SCO-Novell-Unix-Linux Open Source Market Impacts (B. Guptill, 5 pages, MKT-379, $$$)

On August 10, 2007, U.S. federal Judge Dale Kimball issued a summary judgment in the case of SCO v. Novell, stating that "Novell is the owner of the UNIX and UNIXWare copyrights." Among other findings, SCO was found to be in breach of its licensing agreement with Novell and required to pay nearly $25 million in royalty payments to Novell. The ruling cast further doubt on SCO's claims that IBM and Linux infringe on any SCO-copyrighted source code.

Since 2002, Saugatuck research regarding open source adoption has found repeated and frequent mentions of this landmark – and messy – case as an important inhibitor to the adoption and use of open source software. The conventional, common wisdom was that the SCO case represented not only an inhibitor by itself, but also represented a powerful market uncertainty regarding open source.

07-31-07 IT Management Evolution: All Roads Lead to Rome (C. Burns, 4 pages, STR-372, $$$)

Saugatuck research clearly points to continued and expanded adoption of Software-as-a-Service (SaaS), Service Oriented Architecture (SOA), Open Source software, and Utility Computing infrastructure. Individually, each of these technology disruptors denotes evolutionary changes in existing IT infrastructures.

However, for most user enterprises, these four are both coincident and interrelated. The net result is that adoption of any of these four "technology disruptors" (SOA, SaaS, Open Source, and Utility Computing) will likely result in adoption of the others. But it is rare that each is coordinated to be managed effectively as part of a holistic IT and business strategy or plan. The cascading effects of adopting one disruptive influence have to be planned for in the context of multiple, simultaneous disruptive influences.

07-31-07 SOA’s Dependence on Open Source is Key to Vendor Success (A. Perrin, 4 pages, MKT-371, $$$)

Saugatuck research with user and vendor executives indicates that the adoption and use of open source software is an increasingly important driver of SOA adoption and usage. A variety of factors makes open source a complementary, enabling technology for SOA. Chief among these are community development, componentization, and affordability. Saugatuck believes that as these forces drive open source software more deeply into the mainstream, that SOA adoption will accelerate in parallel.

07-27-07 Open Source Vendor Perspectives: It’s Real, It’s Hidden, and It’s Bigger Than You Think (B. Guptill, 5 pages, STR-370, $$$)

Saugatuck’s open source research program has been probing vendors of open source offerings for insights and perceptions regarding open source market influence, user presence, and long-term direction. The results will be incorporated into our Fall 2007 open source software Research Report, scheduled for publication in mid-September. That report will also include data and analyses from the worldwide IT user executive web survey that we are conducting on open source presence, influence, attitudes and impacts. 

07-20-07 SaaS: What You Don’t Know Can Hurt You (C. Burns, 4 pages, STR-367, $$$)

The Software-as-a-Service (SaaS) arena is experiencing growth in two dimensions: rapid expansion of offerings, and growing adoption by users. A recent public filing by a major SaaS provider has highlighted that customers may not be aware of key attributes of the IT infrastructure which underlies the SaaS application. Just as learning that your brake pads are badly worn while driving down from Pikes Peak can ruin your day – learning that your SaaS provider has weak or non-existent recovery capabilities during recovery from a disaster can ruin your career.

06-29-07 Open Source’s Changing Nature Sparks Debate: What, and Where, is "Open Source?" (C. Burns, B. Guptill, 4 pages,  MKT-363, $$$)

Current Saugatuck research indicates a rapidly increasing presence of open source-based software within user enterprises. More and more, open source can be found "behind the scenes," embedded within various solutions and SaaS offerings. The role and influence of open source within user and vendor organizations are changing. Open source usage and the intertwi