Intelligent Enterprise

Enterprise search vendor FAST is poised to strike a blow for SNaaS – Software NOT as a Service. With a planned April 30 software release, FAST plans to alter the Web's money equation, which to date has been service mediated. The FAST AdMomentum platform – provided for installation by online publishers – is designed to shift control of delivery of contextual advertising from third-party service providers. Company CEO John M. Lervik claims that by adopting a SNaaS model, media companies, retailers, and telecommunications service providers will be able "to maintain control of their revenue, serving their advertisers and audiences more effectively," something "difficult to do with third-party platforms."

Granted, I'm not telling the real story, which is about competing models for delivery of big-$$$ contextual advertising on the Web. That's the story FAST wants me to tell, but I'm an analyst and not a reporter, and I can pull from that real story whatever I choose, which in this case are conclusions about when and when not to go with Software as a Service (SaaS).

Lervik and FAST don't use the SNaaS term, which I coined just this last weekend after realizing what really interested me in a pitch sent by a FAST publicist. The publicist's focus was dollars and AdSense, as in Google's ad-delivery service, but even tech strategists like me understand that someone must pay for the Web's free tools and toys. It's a given that no one makes money from consumer Web search per se – not Google or Yahoo with 55% and 20% of the market, respectively, and certainly not Microsoft, whose "Live" branding seems more a desperate wish than a compelling offering. (Live's search share is in the single digits and is reportedly slipping.) No, we all know that online ads fund Web search as a loss leader, and it's Google AdSense and Yahoo Search Marketing and the like that broker and deliver those ads. They do it as a service, quite profitably.

Web search has always been delivered as a service. Who but propeller-hatted weenies (like me) would even think to pre-label this service with "Software as a"? FAST's pitch is to save online publishers high, not-so-hidden costs, or rather, to let them retain the substantial bit of vigorish on each ad impression/click that would otherwise go to Google or Yahoo. The pennies add up, and soon we're talking real money, enough to justify Google's and Yahoo's combined $190 billion market valuation.

When we start talking real money, that's when it makes sense to bring back in-house business that was previously outsourced "as a Service." That's when it makes sense for a solution provider such as FAST to pitch software an organization can install itself. What, after all, is SaaS other than outsourcing, and is outsourcing ever a one-size-fits-all proposition?

I've finally realized why I dislike the term "Software as a Service." It puts software center-stage where the issue is really the most profitable or efficient place to conduct automated business processes. SaaS as a concept seems little more than an attempt to differentiate software products, suggesting that the SaaS/SNaaS decision should be based on technology and not on business considerations.

FAST, good luck, and thanks for letting me use you to tell my story. SaaS=outsourcing, nothing more. Evaluate SaaS as an option on that basis. Don't use service X because it's SaaS; the software part is close to irrelevant. Use it because it makes the best business sense.