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Negative View of Security Standing in Way of SaaS


No reason not to deliver dev tools as services, but perceived risk remains

By Jennifer deJong
September 5, 2007 — 
Thanks largely to the success of Salesforce.com, software as a service is a widely accepted way to deliver business applications. But despite longstanding pockets of adoption, SaaS has not completely caught on in the enterprise development tools arena.

Analysts and toolmakers said there is no reason why entire suites of development tools cannot be delivered on a service basis. The obstacles—security concerns being chief among them—are not technical. The real impediment, they said, is a widespread perception that the SaaS model poses a greater risk for coding, testing and other life-cycle development tools than it does for business software, such as the customer relationship management offering sold by Salesforce.com. “Some people have an almost allergic reaction to hosting source code outside the firewall,” said Forrester analyst Carey Schwaber. “But the resistance is more of an ideological thing than a technical thing.”

IBM Rational program manager Ashok Reddy noted a widely held belief exists that committing customer data to a centralized server controlled by a third party is OK, but doing the same thing with source code is another story. “Source code is intellectual property, and it is perceived as more strategic to the company [than customer data],” he said. HP vice president of managed software solutions Marc Olesen said the challenges of delivering software as a service are “not unique to development tools.” Security is the key issue cited by development and QA managers considering HP’s service-based offerings for load testing and functional testing; the company, by virtue of its 2006 acquisition of Mercury, can be said to have provided these since 2000. Potential customers also raise concerns about self-sufficiency—the ability to control the software themselves—and about integrating that software with other offerings, he said. These are the core issues, added OpSource chief technology officer John Rowell. “And they are the same for any software.” OpSource provides services that help software companies adopt the SaaS delivery model.

‘In Someone’s Garage’
When development managers opt for SaaS solutions, they do so primarily to take advantage of the toolmaker’s institutional knowledge, which is very difficult to replicate on staff, said Voke analyst Theresa Lanowitz. When software is provided as a service, “you don’t need a full-time person [dedicated to] Load Runner,” she said referring to the HP load-testing offering. Relying on a service provider—instead of deploying and managing the software on servers located in-house—helps immensely with managing distributed teams, and it is also cost-effective, she said. “But people haven’t understood the full value of this approach.”

That’s likely because, beyond HP’s offerings, there are relatively few enterprise hosted development tools, noted Forrester’s Schwaber. Among the companies that provide SaaS-based offerings for enterprise development are Empirix, which delivers load-testing and performance management software, and IBM, which makes the Watchfire application security tools and other offerings as hosted services. But the majority of the hosted offerings in the development tools market are “lightweight project management tools small enough to be hosted in someone’s garage,” Schwaber said, citing eProject as an example.

Another indication that enterprise application development teams have not bought into the SaaS delivery model is CollabNet’s decision, about a year ago, to begin selling its collaboration and other software development tools under a traditional licensing agreement. Earlier, the company made its software available only on a service basis, said company CEO Bill Portelli. “Our position on SaaS is that we are agnostic,” he said. But he also noted that “SaaS has better business benefits in terms of cost savings.” Portelli declined to say what percentage of the company’s customers opt for SaaS, compared with traditional software licensing. HP’s Olesen also declined to answer that question. “We don’t break out those numbers,” he said. But he said that buying HP testing tools on a service basis costs about 20 percent less than licensing the software, when measured over the course of three years.

Lanowitz said it’s essential that the enterprise development teams move toward the SaaS delivery model. “That is the direction we have to go,” she said. “The way we consume software now is archaic. The vendor-to-consumer model is more than 25 years old.” She said that in the long run, all development tools are likely to be delivered as services. But a hybrid model, where some activities of the software development process are hosted outside the company, and others remain in-house, is likely to emerge in the short term. “Once you try the service approach, you don’t go back to other model.”


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