Alexander Craig's blog

Run a Google search on ‘IFA SaaS solutions’ and you won’t find much. In fact, our last blog post on the topic currently comes up top of the pile! However, change the search to ‘SaaS solutions’ in general and you’ll suddenly find a whole world of diverse products and providers. There may not be much on the market-specific SaaS plate right now, but SaaS is big and will continue to grow. This is for two simple reasons: software as a service (SaaS) is easy to buy and it is (usually) cost effective. It’s also the most established of the Cloud Computing space ‘as a service’ solutions (more on ‘infrastructure’ and “platform” as a service in upcoming articles).

By now you’ve no doubt heard about SalesForce.com and Google Apps. But what does SaaS really look like closer to home; in the IFA market place for example? To get some idea, it is worth taking a quick look at two examples, Profida’s front and back-office solution for IFAs and SalesForce.com.

Profida have made a bold, market-specific move. In July this year they launched a full end-to-end business automation solution and made it available as SaaS. As you’ll see from their web site (which has some handy video tutorials) they aim to provide everything an IFA needs to run their business, from initial client capture to on-going reporting and analysis. They even allow their customers to provide a simple branded on-line ‘portal’ that they can point their clients at. This is a good thing. It allows an IFA to present a solid and professional on-line image and reduce legwork by getting clients to complete their own initial on-line Fact Finds etc. A super example of business efficiency and customer interaction best practice. It is early days for the product so we’ll have to wait and see how strong uptake is and I’d be keen to hear from anyone who has used the solution ‘in anger’.

SalesForce.com, by comparison, is the undisputed masters of the task-specific SaaS offering. They do customer relationship management (CRM) and they’re good at it. While they cover a much smaller proportion of the IFA solution space (compared to Profida who try to cover it all) they’ve got the advantage of a 10 year head start and a hell of a reputation. People like Aon make a great practical example of a SalesForce.com rollout. Aon turned to SaaS to address a very specific task (creating consistent customer management and reporting across their businesses) but stuck with other systems for the rest of their extensive solution needs. They could do this because, like most SaaS offerings, SalesForce CRM was quick and easy to roll-out and happy to integrate with other systems.

These two examples give a nice contrast between whole business vs. task-specific SaaS and the big vs. small providers. They also give a really nice view of what the near future may look like.

But what, I hear you say, of the cost. That’s the most interesting part. In both cases the costs are simply based on the number of subscribers to the service each month and are in the region of £35 – £100 per user per month. That’s it. Remember, this is SaaS so the provider is dealing with the infrastructure management, buying and running servers, operation systems upgrades, backups and all the hassle that goes with it. All the customer needs to provide is a workstation and an Internet connection – simple and cheap! And do you know what, if it doesn’t work out the only cost will have been the monthly fees while the service was being used (and maybe a little bit of time and training). This makes for a very compelling case to at least try SaaS!

So, to recap, the SaaS landscape for the financial services market is relatively unpopulated but it isn’t barren. This is likely to change quickly over the next 12-24 months as new provides and services come on stream. In the mean time, if you’re considering SaaS, think about it in terms of two distinct flavours:

1. Market specific solutions — aimed directly at a single market, addressing its unique needs and typically providing a broad scope of business automation for that market. Profida is a good example of this;
2. Task specific solutions — aimed across a range of markets but targeting a well defined business automation requirements such as CRM (in the case of SalesForce.com). Other examples include project management (LiquidPlanner, Basecamp, Intervals and Zoho), basic accounts (Freshbooks and Crunch) and email, collaboration, etc. (Google Apps);

Finally, remember, the best part of SaaS is that you can usually start small and scale up. This means it is possible to quickly and cheaply trial solutions before committing. As a result, it will be simpler than you make think to catch the SaaS wave and take advantage of it in your own organisation sooner rather than later.

This all means that the answer to the question posed in the title of this article is a resounding “yes”. There is plenty of space for SaaS in financial services, and that space will continue to grow as quickly as it can be filled.

I’ll be keeping a close eye on the market place and will keep you abreast of any significant developments in upcoming articles. I’ll also be taking a closer look at the other part of the Cloud Computing space: Infrastructure as a Service (IaaS) and Platform as a Service (PaaS) next time round.

This article was first published on 05 November 2009 on the AT8 Group blog.