News

In the past few months, you could hardly pick up a newspaper without seeing a headline about the latest government agency or high-street bank to have mislaid sensitive data, either on disks lost in the post or through laptops left lying around or stolen. With data security at the front of people’s minds, the idea of letting commercially sensitive data leave your premises might seem crazy, but it’s what is being predicted as the next development in management information systems (MIS).

According to some industry commentators, MIS will follow the trend in business software and switch to what is known as Software as a Service or SaaS. SaaS moves the software from a server within the user’s premises to a data centre accessed via the internet. Rather than pay upfront for a perpetual licence to use the software and servers, plus the additional infrastructure, ongoing maintenance and upgrade costs needed to run them, you pay a monthly fee to cover the cost of using the software, which Prism’s UK sales manager Robin Cook likens to “a mobile phone contract”.

The benefits of SaaS are claimed by its advocates to include lower and more predictable costs, greater uptime and perhaps, counter-intuitively, better data security.

“The view held by a lot of people is that anything online is in the public domain,” says Shuttleworth joint managing director Paul Deane. “There is far more security in having that data held centrally, but there’s a psychological barrier in having your customer, prospect, supplier and pricing details stored online. It’s a barrier to overcome.”

Rise of service subscriptions
In the broader IT market, forces are massing to overcome those barriers with predictions of a big swing towards SaaS. According to research firm Gartner, by 2012 at least one-third of business application software spend will be as service subscription rather than product licence and by 2011, early technology adopters will forgo capital expenditures and purchase 40% of their IT infrastructure as a service.

The firm’s research is backed by the weight of giants such as Amazon, Google, Microsoft, Oracle and SAP getting behind the SaaS concept. And it is relevant to the remit of MIS, with Gartner estimating that the market for enterprise applications (that is the equivalent to MIS in other markets) provided as SaaS grew by 21% in 2007. In that field, new players such as Netsuite based on the SaaS model have sprung up.

But what about print MIS? “I’m not aware of any UK MIS companies offering an end-to-end MIS as a web service,” says Prism’s Cook.

It’s the end-to-end bit that’s important, as a couple of firms are offering a handful of MIS components on a SaaS basis. Both Brightblue and RedTie have recently entered the market with estimating packages that are operated on a monthly fee and centrally hosted by the supplier. And in web-to-print applications, some packages are only offered as a service, while others can be used either as a service or bought outright.

Mixed response
As for the existing MIS firms, they are watching the market with interest and there are mixed messages about whether it is something printers are demanding or even aware of yet.

“It’s not something anyone is asking for,” says Shuttleworth’s Deane. On the other hand, Brightblue chief executive Mark Wragg has found that: “A lot of our customers say they wish their MIS was supplied on a SaaS model – they’re keen to see a model like this.”

Wragg believes the central thing for SaaS is what the last S stands for – service. From the customer’s perspective, it’s a different dynamic. They drip money in month by month, so they have a lot more leverage,” he says. “If a customer isn’t happy, they don’t pay and as a supplier, if you’re not getting paid, you take notice. You will take steps to remedy things before you get to dealing with contractual issues.”

While the MIS suppliers are not finding their customers are asking for SaaS just yet, and so don’t have any products available today, they are aware of it and are assessing what the benefits are, what sort of firms will benefit most and when the time may be right to enter the market.

“There is a huge merit in having data stored centrally for security and to ensure there is a back-up and built-in redundancy and ensure uptime of 99.5%,” says Deane. “I believe we could provide our customers with better uptime by centrally hosting rather than them locally hosting.”

Wragg adds that frequent incremental upgrades reduce the need for tiresome wholesale upgrades and the resulting retraining.

“What printers hate is when every 12 months they get a whole re-implementation of the MIS,” he says. “They haven’t got the time to implement it and do all the necessary retraining. We can drip feed in new features in bite-sized chunks so, as a user, you don’t get swamped by the changes. It’s a nicer way to deploy software.”

Customisation and integration are flagged as possible problems with the SaaS model by MIS vendors. Wragg believes the term ‘customisation’ is a misnomer. “It’s configuration, and that is independent of changing the software itself,” he says.

One of the biggest factors that will affect the uptake of SaaS in MIS is cost. “There’s no initial capital expenditure, just the monthly fee,” says Cook. “There’s no need for the printer to buy the servers and database; the system administration costs as a web service would include all that in a monthly fee.”

That said, most non-print enterprise applications systems do have an upfront set-up fee.

Shuttleworth’s Deane is more cautious about the cost benefits of SaaS: “For a lot of companies, the economics just don’t stack up for either the user or the developer, but that is changing. When we looked at the numbers, there was a cost justification for larger printers, but there’s no doubt that for smaller firms it’s not that cost-effective today.”

Clearer costs
Wragg questions whether many firms know the true costs of running their MIS and argues that SaaS makes it much clearer. “You’re making it very visible. If you have software in-house, then there are lots of other costs that aren’t accounted for.”

His view is backed up by Bezier group technology director Glenn Batty, whose firm uses Brightblue and Prism and is interested in expanding its use of SaaS as MIS.

“There are probably a lot of hidden costs, but that’s a gut feeling, as we’ve never had the incentive to look at it too closely,” he says.

As Wragg stated earlier, service is the important word and he cautions any would-be user to carefully check their contracts, especially the service level agreement for things like operating hours, uptime and refunds and compensation for any downtime.

And as for the issue of security and the fear your data might get into the hands of your rivals, he adds that security would be a priority for any supplier: “If any sort of data transfer like that were to happen, then that’s it. It would pretty much end the business for that supplier.”

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CASE STUDY: BEZIER
Retail print specialist Bezier fits the bill as some people’s ideal user of the SaaS model. It’s a multi-site company with several locations in Wakefield and other operations in Bristol, Poole and Weybridge, Surrey, with an in-house team responsible for maintaining its MIS. It’s also an IT-savvy operation that has some experience of SaaS and web services as a user and a provider.

Group technology director Glenn Batty says: “The strength of SaaS would be around the cost of ownership and not having an initial investment. As a sophisticated user of MIS, we have several people supporting our system.”

Other benefits he sees include being able to roll out upgrades more efficiently by “flicking a switch rather than an intensive internal process”. He’s not aware of any MIS suppliers offering the whole package as SaaS, and says he would be interested if anyone offered that option.“We could focus on our core skills rather than on managing people’s desktops,”
he says.

Bezier operates a Prism MIS and is the beta site for its integration with SaaS estimating package Brightblue. Batty is happy with Brightblue and especially the ability for CSRs to use it in the field. The firm also has experience of providing a software-based print personalisation service online to its own clients.

He has some tough questions that any SaaS MIS would need to answer about availability.

“You get spikes of MIS usage at the end of the month,” he says. “Would the system be able to handle those spikes, especially as that’ll be at the same time that every other user has spikes in their usage?”

His other concern is whether SaaS would deliver the same level of customisation and integration with the rest of Bezier’s business: “It would have to, if it didn’t do that it would draw a line straight through it.”