Managing and Optimizing Your SaaS Investments: An EMA Analysis

Transcription

1 Managing and Optimizing Your SaaS Investments: An ENTERPRISE MANAGEMENT ASSOCIATES (EMA ) White Paper Prepared for Covisint December 2013 IT & DATA MANAGEMENT RESEARCH, INDUSTRY ANALYSIS & CONSULTING

2 Table of Contents Introduction... 1 Demographics... 1 SaaS and Cloud Adoption... 1 Visibility and Control... 2 Data Sharing... 4 Technology Priorities... 5 A New Focal Point for SaaS Governance and Optimization... 6 Conclusion... 8 About Covisint... 8

3 Introduction Public Software-as-a-Service (SaaS) offerings are increasingly becoming critical resources to enterprises and organizations seeking to differentiate and improve their business performance. And yet SaaS, and public SaaS in particular, is challenging IT with new requirements for optimization and governance. Current (Q3 2013) EMA research sponsored by Covisint substantiates the growing criticality of SaaS across the extended enterprise, while the need for control and visibility into SaaS usage, security, and performance remains basic at best in many IT environments. This report looks at SaaS and cloud adoption priorities, as well as the growing need for more effective SaaS governance based on relevance, value, cost and performance a requirement that can best be addressed at the point where delivered services and consumer access come together. Demographics This ENTERPRISE MANAGEMENT ASSOCIATES (EMA ) research included more than 100 respondents in North America across more than twenty-five verticals, but with a leading presence in financial services, manufacturing, healthcare and government. Businesses and organizations ranged in size from 1,000 to more than 20,000 employees, with a strong large-enterprise presence. As a positive note, it s worth mentioning that 54% of the IT budgets surveyed grew, and only 14% declined. SaaS and Cloud Adoption Cloud adoption is clearly on the rise and becoming more and more critical, as is shown in Figure 1. Of these the largest percentage (45%) are a balanced mix of internal and external cloud services, with 41% mostly internal and 13% primarily external or public cloud. How would you describe the extent at which cloud computing has been adopted within your business/organization? It is currently adopted and an essential part of our business 28% It is currently adopted and an important part of our business 35% We are currently generating revenue through delivered cloud services 7% We are or plan to generate revenue through delivered cloud services 4% It is currently adopted and mostly supplemental to other types of computing 10% We are still in the early phase of adoption 14% It is planned for adoption 3% 0% 5% 10% 15% 20% 25% 30% 35% 40% Column % 1 Figure 1: As can be seen from the above, 63% of respondents felt that cloud was either important or essential for their business or organization Page 1

4 Among the top SaaS-delivered services were collaboration services, and chat services, database and data management services, and production web hosting. When asked who s leading the cloud initiative, a dedicated cloud management took top place at 23%, followed by data center operations at 19% and network operations and architecture or infrastructure services, both at 9%. The trend towards a dedicated cloud management team has been pronounced in recent years, and more often than not reflects a more advanced stage of cloud deployment and cloud efficiencies. Visibility and Control It is striking that only 44% of respondents could even hazard a rough guess as to how many SaaS services were being deployed across their organization. And only 32% felt they had some idea of monthly SaaS costs. How important is this? EMA data shows that this may represent a dangerous area of blindness, as among those who could guess, the average number of public SaaS services was more than 20, at an average monthly cost of somewhere between $100K-$250K! (See Figure 2.) What is the estimated total monthly cost of public SaaS services used across your business or organization? Less than $2, per month $2,001 to $5,000 3% $5,001 to $10,000 15% $10,001 to $25,000 12% $25,001 to $50,000 3% $50,001 to $100,000 9% $100,001 to $250,000 15% $250,001 to $500,000 18% $500,001 to $1,000,000 21% $1,000,001 to $2,500,000 3% More than $2,500,000 per month 0% 5% 10% 15% 20% 25% Column % Figure 2: Only 32% of respondents had a rough idea of monthly SaaS costs across their organization, but costs are significant, as can be seen above, averaging somewhere between $100K and $250K per month! 2 Page 2

5 On the other hand, enterprise IT is expected to be responsible for SaaS support. Figure 3 highlights the fact that only 11% of respondents depended primarily on the service provider for SaaS deployments. Undoubtedly this provides a primary reason why 71% of respondents viewed the IT Infrastructure Library (ITIL) as either very or extremely important for cloud. While the majority of Enterprise IT organizations are largely oblivious to costs and actual usage of public SaaS services, they are expected to govern, management and support end user requirements when it comes to these same services. Who primarily supports public SaaS services when end users within your organization have issues or concerns? a balanced mix of the public SaaS provider and our IT organization. 34% our IT organization service desk. 28% our IT organization operations or non-service desk. 25% the public cloud SaaS provider. 11% a shadow IT group outside our central organization. 3% 0% 5% 10% 15% 20% 25% 30% 35% 40% Column % Figure 3: While many IT organizations are not visibly aware of broader usage and costs for SaaS, only 11% depend primarily on their cloud provider for SaaS support when end users have issues. When asked about metrics for governing public SaaS costs and assessing SaaS benefits, the top seven were: 1. Service availability 2. External cost of delivery (or costs as associated with the service provider) 3. Internal delivery costs 4. Infrastructure optimization and usage 5. Business performance metrics other than revenue 6. Time to provision new services 7. Service utilization 3 Page 3

6 Data Sharing Optimization and governance for public SaaS environments requires not only good internal metrics and data, but data and reports that can be effectively shared with relevant cloud service providers. More often than not, this also means sharing information across a yet broader business ecosystem of other service providers, partners and suppliers what EMA calls the extended enterprise. When asked how important it was to share management and other data with their Cloud Service Provider (CSP) for SaaS services across the extended enterprise, 73% of respondents felt it was either very important or critical. However when asked about how respondents were actually sharing SaaS-related data, only 32% were actually sharing critical management information with their CSP, compared to 33% with their partners, 27% with their external suppliers, and of course 100% across internal IT. When data sharing and broader communication with CSPs was examined more closely, as in Figure 4, only 40% had even basic (availability-related) SLAs in place. On average, how is your organization sharing data with and otherwise governing its cloud service providers and/or visa versa? They have committed SLAs based on availability They are proactive in supporting our need to monitor inside the public cloud They have committed SLA s based on service response time They are responsive when we experience service degradation We feel we have a partner in working with them 40% 38% 38% 38% 38% They send us monthly reports on usage and costs 33% We supplement their monitoring with our own tools and share some of the results with them We supplement their monitoring with our own tools but do not share They do not share data with us, and we do not share data with them We feel we are being managed by their lawyers 13% 12% 16% 26% They have no committed SLAs We monitor inside the public cloud without their permission They are not interested in hearing from us when there is a service delivery problem 11% 10% 9% Other (Please specify) 1% 0% 10% 20% 30% 40% 50% % Valid Cases (Mentions / Valid Cases) Figure 4: Interaction between respondents and their Cloud Service Providers show a broad range of options but only 40% had basic availability SLAs in place, while only 38% felt they had a partner in the collaboration, and 12% felt they were being managed by (the CSP s) lawyers! 4 Page 4

7 Technology Priorities So how do you take control of SaaS in an ecosystem? Effective management-enabling technologies is clearly one place to begin, as these can create a foundation for establishing more meaningful dialog, processes, and higher levels of automation in optimizing SaaS-delivered services. Our respondents showed a wide range of technology types deployed, as can be seen in Figure 5. However, of these nearly half had fewer than four of the below capabilities deployed, and only 21 respondents had eight or more. Which of the following service management technologies are deployed at your organization? Integrated security analytics Service Level Management and or User Experience Management Capacity planning/optimization analytics Financial planning analytics Service Performance optimized analytics Cross-domain configuration automation (including VM provisioning) Unified Service Desk (single, corporate or SP service desk) Integrated service management dashboard with advanced analytics Business impact optimized analytics 53% 49% 46% 45% 41% 39% 39% 37% 35% Run-book or IT Process Automation DevOps service provisioning focused automation 22% 25% Other (Please specify) 1% 0% 10% 20% 30% 40% 50% 60% % Valid Cases (Mentions / Valid Cases) Figure 5: Taking charge with technology is one way to begin to bridge the SaaS governance chasm, and as a total population, respondents demonstrated a healthy mix of advanced technology choices; however, when examined more closely, nearly half (48) only had 1-3 of the above deployed. 5 Page 5

8 A New Focal Point for SaaS Governance and Optimization This research also targeted a unique mix of capabilities optimized for SaaS optimization and governance a fully integrated system for identity management, usage, and response-time monitoring for public SaaS applications across the extended enterprise. If well integrated, easily deployed and effectively packaged, such a confluence of functions could deliver a promising central point of governance with maximum versatility and adaptability. When asked about the value of just such a combination, respondents were consistently positive, as can be seen in Figure 6. It is also worth noting that those IT organizations with more technological maturity were nearly three times more likely to see such a central point of governance as critical! How would your organization value a fully integrated system for identity management, usage, and response-time monitoring across its public SaaS applications across its extended enterprise? Low priority, but would consider it 9% Interesting, but we would have to evaluate it further 34% Important, we would see it as a requirement 28% Critical, it would become a top priority 30% 0% 5% 10% 15% 20% 25% 30% 35% 40% Column % Figure 6: An integrated system for SaaS governance including identity management, usage, and responsetime monitoring showed strong positive uptake, even as a new concept with 30% of respondents feeling that it would be critical, a top priority. It s also not surprising that another significant percentage wanted to learn more about it and evaluate it further. Only 9% felt it was a low priority. 6 Page 6

9 However, for such a system to work, integrations with existing investments are another must have. EMA data showed that IT Service Management more broadly, and service desk integrations in particular, took the lead (Figure 7). What are the areas of integration for an integrated capability for identity management, usage and response-time monitoring for public SaaS and/or other internally delivered applications? All areas of integration - Service Desk for Incident and Problem workflows All areas of integration - Service Desk for Change, Configuration and Release Management All areas of integration - asset and license management solutions All areas of integration - service management dashboard All areas of integration - IT process automation or run book capabilities All areas of integration - end-point (PC and Mobile) management capabilities 60% 56% 52% 52% 49% 48% All areas of integration - accounting capabilities 38% All areas of integration - other monitoring tools 34% All areas of integration - SIEM capabilities 26% All areas of integration - Other (Please specify) 1% 0% 10% 20% 30% 40% 50% 60% 70% % Valid Cases (Mentions / Valid Cases) Figure 7: Integrations are key for the New Focal Point for SaaS Governance as is shown above with leading priorities focusing on service desk process flows for incident and configuration management. Finally, EMA also looked at buying priorities for this new, integrated capability to optimize SaaS including identity management and access control, usage analysis and response-time awareness. The top five in ranking order were: 1. Security, risk, and compliance capabilities 2. Ease of implementation 3. Low cost 4. Performance management capabilities 5. Ease of use 7 Page 7

10 These options are not at all surprising given the need to mix power and visibility with ease of use and deployment as reflective of broader trends in service management. This is in large part due to the shifting nature and responsibilities of IT organizations, with ever more options than before, and ever more pressure to account for consumer value in a more dynamic and efficient fashion. Conclusion This research, conducted largely in September of 2013, is consistent with other current EMA research, such as Ecosystem Cloud: Managing and Optimizing IT Services Across the Full Cloud Mosaic from Q in reinforcing requirements for versatility, accountability and adaptability in governing and optimizing cloud services overall, and SaaS in particular. The notion that cloud provides a magic endpoint to a journey with its own, friendly Wizard of Oz behind the curtains when the journey s over is no more realistic than the children s tale itself. Cloud services, including SaaS, offer IT organizations a substantially new set of resources, but they are also challenging IT with new requirements to assess relevance and value, as well as obtain insights across an ecosystem that goes far beyond a single IT data center. The tested value of a new center of control for SaaS examined in the data here shows striking promise in moving beyond the cloud mystique to making SaaS more efficient, more visible, more measurable and more accountable. However, it is a transition that also depends on meaningful and ready integrations with other service management investments, as well as IT organizations willing to align with processes and priorities suitable for the dynamic universe that cloud demands. EMA looks forward to the growing adoption of such a new system for SaaS control both for enterprise IT, and for the extended enterprise. About Covisint Covisint provides the leading cloud engagement platform for creating and enabling new mission-critical external business processes. Our solutions enable organizations to connect, engage, and collaborate with the critical external audiences that define their success including customers, business partners and suppliers. More information is available at or call (313) Covisint Corporation One Campus Martius Detroit, MI Page 8

11 About Enterprise Management Associates, Inc. Founded in 1996, Enterprise Management Associates (EMA) is a leading industry analyst firm that provides deep insight across the full spectrum of IT and data management technologies. EMA analysts leverage a unique combination of practical experience, insight into industry best practices, and in-depth knowledge of current and planned vendor solutions to help its clients achieve their goals. Learn more about EMA research, analysis, and consulting services for enterprise line of business users, IT professionals and IT vendors at or blogs.enterprisemanagement.com. You can also follow EMA on Twitter or Facebook. This report in whole or in part may not be duplicated, reproduced, stored in a retrieval system or retransmitted without prior written permission of Enterprise Management Associates, Inc. All opinions and estimates herein constitute our judgement as of this date and are subject to change without notice. Product names mentioned herein may be trademarks and/or registered trademarks of their respective companies. EMA and Enterprise Management Associates are trademarks of Enterprise Management Associates, Inc. in the United States and other countries Enterprise Management Associates, Inc. All Rights Reserved. EMA, ENTERPRISE MANAGEMENT ASSOCIATES, and the mobius symbol are registered trademarks or common-law trademarks of Enterprise Management Associates, Inc. Corporate Headquarters: 1995 North 57th Court, Suite 120 Boulder, CO Phone: Fax: