Betting the business on SaaS

It is a measure of the maturity of software-as-a-service that some sizeable businesses are prepared to build their IT infrastructures almost entirely out of SaaS offerings. Two such organisations shared their experiences at the Business Applications and Infrastructure 2009 conference.

Newspaper publisher the Telegraph Media Group has been one of the most conspicuously SaaS-friendly businesses in UK industry. But not so long ago, it was in the relative dark ages.
“A year ago, we didn’t have a customer relationship management application,” explained Toby Wright, TMG’s head of applications & development who was brought in as part of a major leadership overhaul at the company. “To manage all our subscribers’ details, we had an application written in 7 million lines of Cobol, and only one person who knew how it all worked.”

The company decided, therefore, to move its 11 million subscriber records on to’s CRM platform, and the benefits have been manifold. For one thing, the development speed was greatly improved. The project, which would have previously taken the company between 15 and 18 months, took only four.

The fact that is constantly upgrading its application, Wright said, means the users are contented, and IT staff are not constantly working to keep the application up to date.
And the web-based nature of’s application means it is now much easier for TMG to provide subscribers with the ability to manage their own subscriptions.

But not everything about met with TMG’s approval. “Storing 11 million subscribers’ records on is expensive,” said Wright. The company took a decision to instead use Amazon Web Services’ storage service. As well as saving money, this move has allowed to produce reports based on the subscription data quicker and cheaper than ever before. “We now do all of our business intelligence on AWS, and the best thing is that we can turn it off when we’re not using it,” said Wright.

Having caught the SaaS bug, the company also adopted Google’s online desktop suite Google Apps. “That took a lot of persuasion,” recalled Wright. “Business people find it hard to use what they consider to be consumer tools at work.”

And not everyone was convinced even after rollout. “The two times that Google Apps has gone down, people were queuing up to tell me about it,” he recalled. “But at the same time, there was a sense of calm, because everybody knew Google would fix it.” What is more, the financial benefits are hard to argue with. “We’ve saved £1.5 million over a year or so.”

Nothing in Wright’s experience of SaaS deployments has tempered his enthusiasm for the model. However, he warned, it can make users’ expectations perilously high. “One of the problems with, for example, was that people thought it was so easy to use that they didn’t think they needed to tell us what their requirements were anymore.”

The Home Delivery Network has been almost as voracious a consumer of SaaS as TMG: it uses’s CRM application and SaaS logistics and communications offerings.

For IT director Chris Airey, one of the key benefits of the model is the fact that it lets him benefit from the innovative zeal of his SaaS providers. “These are people who are motivated to innovate for the success of their business,” he told the Information Age conference.

Plus, in his network of SaaS suppliers, he has put together a team of partners who hold an interest in his business’ continued success. “Having friends in the market is valuable,” said Airey.

Pete Swabey

Pete Swabey

Pete was Editor of Information Age and head of technology research for Vitesse Media plc from 2005 to 2013, before moving on to be Senior Editor and then Editorial Director at The Economist Intelligence...

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