To view this complimentary webcast in full, visit: http://forms.axiossystems.com/LP=286 Eveline Oehrlich (Hubbert), the Senior Analyst at Forrester Research, shares practical guidance on choosing an ITSM subscription model that's right for your organization. This video is a must see for anyone that is contemplating the move to SaaS.

1. 1 © 2010 Forrester Research, Inc. Reproduction Prohibited

2. To SaaS or Not?
What Is The Right IT Service Management Model For
Your Organization?
Evelyn Oehrlich
Senior Analyst
Forrester Research
October 19, 2010
2 © 2010 Forrester Research, Inc. Reproduction Prohibited
2009

3. Weigh your options to
support service
management
preparations for the
upturn.
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4. Agenda
IT budget outlook
IT operations challenges
IT fears
IT goals and initiatives
Alternative business models for IT
– SaaS maturity model
– Differences
– Decision model
Summary/conclusion
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5. A year ago, things began to
look uniquely black
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6. Business leaders put emphasis again on growth
while CIOs still focus on efficiencies and cost
“What are your firm's three most important “Which of the following initiatives are your
corporate business priorities over the next IT organization's top IT management
12 months?” priorities over the next 12 months?”*
Base: 2,803 IT budget decision-makers
Source: Global IT Budgets, Priorities, And Emerging Technology Tracking Survey, Q2 2010
* 5 on a scale of 1 (not on our agenda) to 5 (critical priority)
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2009

7. IT Operation groups face challenges
Business
Service delivery demands
Customer
satisfaction
Justifications
Adoption
Service consumption
New technologies
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8. Normal IT tradeoffs have been skewed to short term
priorities
Short Term Long Term
Financial Most savings today Overall total value
Relational Take-orders vendor Value-added supplier
Architectural Run what exists today Build for the future
Contractual Cost-plus transparency Outcome-based visibility
Recession has pushed many firms’
emphasis way over to the short term
agenda
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9. IT fears
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10. The economic tide is
hesitantly turning
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11. Goals and initiatives
Source: February 12, 2010, “The State Of Enterprise Software And Emerging Trends: 2010” Forrester report
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12. MOOSE and IT spending by verticals
Maintain and operate the IT organization, systems, and equipment
Source: Enterprise And SMB Software Survey, North America And Europe, Q4 2008
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2009

13. IT’s recession responses shift in 2009 — NA
Source: Enterprise IT Services Survey, North America And Europe, Q2 2009
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14. IT’s recession responses shift in 2009 — EMEA
Source: Enterprise IT Services Survey, North America And Europe, Q2 2009
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15. IT should consider
alternative business models
to reduce the MOOSE.
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16. Cloud computing
Source: February 12, 2010, “The State Of Enterprise Software And Emerging Trends: 2010” Forrester report
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17. SaaS adoption by applications
Source: May 19, 2010, “SaaS Adoption 2010: Buyers See More Options But Must Balance TCO, Security,
And Integration” Forrester report
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18. The leading benefits of SaaS are lower costs, faster
deployment, and less IT staff
Source: May 19, 2010, “SaaS Adoption 2010: Buyers See More Options But Must Balance TCO, Security,
And Integration” Forrester report
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19. SaaS markets SaaS
Applications
ITMS as a Service
SaaS Applications
% moves (CRM, HR, ERP)
to SaaS
ASP
ITMS
n
lutio
% moves
to SaaS Packaged % moves
Outsourcing Application to SaaS
Evo
% moves
to SaaS ITMS replaced
dor
Legacy
Ven
Disruptive
Application Replacement
Ve
nd
or
Ev
outsourced olu PaaS
Self Hosted tio
n Platforms
ITMS Enterprise Mash up
of Legacy/Packaged/SaaS
Business Enterprise Apps with business logic by
Mash Up ISVs attracted via install base
Application
ITMS PaaS
Infrastructure
PaaS Infrastructure
Provide Technology Stack
Platform License
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Technology

20. Forrester’s SaaS Maturity Model
SaaS
maturity level
Source: August 14, 2008 “Forrester’s SaaS Maturity Model” Forrester report
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21. SaaS versus Application Service Provisioning versus
Application Outsourcing
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22. SaaS versus ASP versus AO
Architecture SaaS ASP AO
Originally designed to be Yes No – No –
SaaS client/server client/server
architecture architecture
with added with added
web GUI web GUI
End-to-end responsibility Yes Yes Yes
(hw, sw, security, dr …)
Deployment
Demo Immediate Sometimes Sometimes
demo needs to be needs to be
available set up set-up
Production Immediate Needs to be Needs to be
production set-up set-up
instance
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23. SaaS versus ASP versus AO (cont.)
Upgrade SaaS ASP AO
Who controls timing? Provider/ Customer Customer
Customer
Payment model Subscription Subscription Upfront
license &
maintenance
fee
Customer owns license No No Yes
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24. SaaS versus ASP versus AO (cont.)
Application SaaS ASP AO
management?
Who develops application? Provider Software Software
provider (not provider (not
ASP) AO)
Who has responsibility for Provider ASP AO
operating & maintenance
of application &
infrastructure
Who owns HW Provider ASP AO
*sometimes customer
PO’s
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25. SaaS TechRadar™
Source: March 12, 2009, “TechRadar™ For Sourcing & Vendor Management Professionals: Software-As-A-
25 Service” Forrester report © 2010 Forrester Research, Inc. Reproduction Prohibited

26. Forecast: IT management SaaS market, 2008 to 2013
Source: November 17, 2008, “How Big Is SaaS In IT Management Software?” Forrester report
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27. Forecast: IT management SaaS market, 2008 to 2013
(cont.)
Source: November 17, 2008, “How Big Is SaaS In IT Management Software?” Forrester report
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28. SaaS buyers cite value add in times of recession
Reduce upfront costs . . .
– . . . and have more predictable costs over time.
Prove value before committing . . .
– . . . and continue to demand value from your vendor.
Ability to scale — up or down
Offload risk to the SaaS vendor
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29. But decision-makers voice concerns with adopting
SaaS
Source: February 20, 2009, “Software-As-A-Service Adoption Expands” Forrester report
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30. A new dawn perhaps?
But what does it take
to achieve it?
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31. A “more science than art” decision model
Financial analysis
- third party process consulting
- licenses cost vs. subscription cost (implementation, integration, training)
- administration, maintenance and upgrades
- support, administration, user management
Capital efficiency
- increased output per capital investment
- direct cost avoidance
Protection of assets
- cost avoidance
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32. A “more science than art” decision model (cont.)
Business Impact
- Need uptime guarantee (depending on vertical)
- Penalties for missed SLA’s
- Compliance
- Mandate
User Productivity
- Immediately
- Reduction of staff
Risk
- Implementation risk
- Impact risk
- Strategic risk
- Measurement risk
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33. A “more science than art” decision model (cont.)
Skill and process analysis
- Process maturity
- Size and skill of team/members
Technical requirements
- Integrations needed
- Depth and breadth of solution
- Fill in the blank
- Support needs
- Maintenance needs
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34. A “more science than art” decision model (cont.)
Contract terms and SLAs
- Uptime and performance
- Disaster recovery and business continuity
- Support assistance
Vendor SaaS value
- Size and profitability of vendor
- Mix of SaaS and other business
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35. Your SaaS Checklist
Budget, contract, SLA:
- Pay as you go model, pricing, SLA details
Speed-to-delivery
- Implementation, deployment, ongoing changes
Security and business continuity
- Some risks – evaluate the vendors DC
Uptime and performance
- depends on your scope and size
Vendor viability and trust
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36. Recommendations
Implement a formal method of due diligence.
– Weigh cost, benefits, risk
Be rigorous in the development of metrics for cost, benefits and risk.
Pricing and contracts matter.
– Don’t forget SLAs, protection against heavy price increases at contract
termination, and support expectations.
Vendors with an on-premise alternative mitigate risk.
– By providing option to move to perpetual license
– On-premise version typically provides greater flexibility and customization
capabilities
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37. Thank you. Danke. Merci. Gracie.
Evelyn Oehrlich
+1 617-613-8803
eoehrlich@forrester.com
www.forrester.com
www.forrester.com
© 2009 Forrester Research, Inc. Reproduction Prohibited