Application Consulting and

Outsourcing Service

Consulting in the Cloud: The Emerging SaaS Consulting,

Product Development, and Outsourcing Ecosystem
by Dana Stiffler and Rob Bois

SaaS is on a roll, even for large enterprises, raising concerns among service providers that
the ERP gravy train may be nearing its final destination. Our latest research indicates,
however, that SaaS actually gives rise to new service revenue opportunities in product
development, support, and hosting.

Market Services
Acronyms and Initialisms
BI Business intelligence IP Intellectual property

BPO Business process outsourcing ISV Independent software vendor

CRM Customer relationship management OEM Original equipment manufacturer

DBA Database administrator R&D Research and development

ERP Enterprise resource planning SaaS Software as a service

GRC Governance, risk management, and SFA Sales force automation

compliance
SOA Service-oriented architecture
HCM Human capital management

© Copyright 2008 by AMR Research, Inc.

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Consulting in the Cloud: The Emerging
SaaS Consulting, Product Development,
and Outsourcing Ecosystem
by Dana Stiffler and Rob Bois

SaaS is an opportunity, not a threat, for consultants and other third-party

The
service providers.
Bottom
Line
Since 2005, AMR Research surveys have shown that interest in
Executive Vendors featured
software-as-a-service (SaaS) and subscription-based software models
Summary is distributed equally among small, midsize, and large enterprises.
in this Report:
Accenture
However, the SaaS vendors built their early businesses on a steady
Avanade
diet of small and midsize business that left third-party consulting firms out in the cold.
BlueWolf
Over the past year or two, several SaaS providers have matured their products and sales
Capgemini
models to sell into large global companies.
Cognizant
As a result, the incumbent consulting firms serving these companies are being pulled Fujitsu Consulting
into the SaaS world whether they like it or not. Simultaneously, traditional on-premise HCL Technologies
independent software vendors (ISVs) have been working hard to SaaS-enable their IBM Global Business
products, realizing that their traditional software business model and technical archi- Services
tecture require a major overhaul that will mean much more reliance on third-party Inforte
service providers. Software development companies and outsourcers are rising to the Infosys
occasion with brand-new consulting, development, testing, and support services tar- OpSource
geted at traditional ISVs and fledgling SaaS vendors. Sierra Atlantic
Symphony Services
TCS
Wipro

Application Consulting and Outsourcing Service Report | June 2008 © 2008 AMR Research, Inc. 1
 Takeaways
• The core SaaS services ecosystem includes consulting and implementation, product
development, and delivery-related managed services.
• As SaaS continues to gain more popularity with large enterprises, IT consulting and
systems integration firms that don’t address it will be relegated to IT body shops.
Those that evolve will remain trusted advisors to lines of business with budget, par-
ticularly in the front office, and their traditional CIO clients, which need to under-
stand how SaaS fits into the enterprise scheme of things.
• Traditional licensed, on-premise software vendors have never developed software that
addresses the unique requirements of SaaS: far greater focus on infrastructure, secu-
rity, and perpetual testing, i.e. design for operations. Product development service
providers are in a better position to do this than the current development arms of the
ISVs.
• Traditional ISVs have little or no experience with ongoing application administration,
infrastructure, or service desks. Third-party service providers with years of experience
are in a good position to support ISVs that are moving to a SaaS model.

2 © 2008 AMR Research, Inc. Application Consulting and Outsourcing Service Report | June 2008
The market
Enterprise software customers are interested in delivery models that compress imple-
mentation times and total cost of ownership. Functional and line-of-business leaders
have the primary say in business application decisions that used to be dominated by IT.
Independent software as well as native SaaS vendors are changing their architecture and
delivery models to suit.

The SaaS services ecosystem includes consulting and implementation,

product development, and delivery-related managed services

AMR Research identifies three core SaaS services opportunities:

• SaaS consulting and implementation—While SaaS has become a pervasive and
in some cases preferred delivery model particularly in the CRM market, only very
recently has SaaS started to capture the attention of the consulting and implementa-
tion service providers. For many of the traditional business consulting firms, SaaS
represented mostly a small and midsize business opportunity largely below their
radar. Over the past few years, several SaaS vendors, including salesforce.com,
Oracle (with its Oracle CRM On Demand), and RightNow Technologies, have
evolved to the point of serving more complex enterprise customers. As a result, these
same business consulting firms began seeing real interest and demand for SaaS
deployments within their existing customer bases. The firms’ practices start to differ,
however, in the ways they approach SaaS, either differently or largely the same as tra-
ditional CRM practices.
• SaaS product development services —For ISVs looking to move to a SaaS model,
there are difficult business and financial decisions to make, in addition to funda-
mental shifts in technical architecture and service delivery. The service providers that
help are still fundamentally software engineering firms, but now they have to think
differently, incorporating more of a total systems and ongoing quality view. The
software R&D menu of services reads the same as it does for onsite product develop-
ment, with coding, testing, and support, but in a SaaS world, there is a far greater
and unceasing focus on infrastructure, security, and perpetual testing. Problems
cannot be blamed on some far-away, behind-the-firewall client that’s mucked up the
software. Responsibility sits squarely with the vendor and its development partners,
which now are responsible for the continuous quality and availability of the product,
which is now a service.

Application Consulting and Outsourcing Service Report | June 2008 © 2008 AMR Research, Inc. 3
 • Ongoing SaaS infrastructure, application, and process support—Many service
providers with strong experience in application support, infrastructure support, and
hosting are targeting these services at SaaS vendors, both native SaaS companies and
traditional ISVs that have little or no experience with ongoing application admin-
istration, infrastructure, or service desks. Some are going as far as marketing these
services as SaaS in a box, bundling their existing monitoring, metering, billing, and
provisioning tools with infrastructure rental and hosting.

SaaS services market dynamics

The traditional enterprise software services market, as propelled by vendors like Oracle,
PeopleSoft, SAP, and Siebel, was all about complex business process reengineering
and heavy product customization. Landing large onsite teams and maximizing billable
hours was—and for many service providers still is—the name of the game. Initially,
many consultants and service providers viewed SaaS as an evil force that would can-
nibalize the ERP money machine. On some levels this is true, but SaaS is also giving
birth to unique, new, third-party service opportunities.

SaaS consulting and implementation

With growth of subscription pricing outpacing traditional perpetual license sales in the
CRM market by double digits, the CRM practices at consulting firms will continue to
see the most demand for SaaS with human capital management (HCM), the next rising
opportunity. While most consulting firms’ SaaS practices are still structured largely the
same as their traditional businesses, firms like BlueWolf are challenging that model by
pursuing shorter but higher volumes of projects (much like the early SaaS market).

SaaS often presents benefits such as lower up-front costs, but that value proposition
could be offset by big consulting fees for implementation. As a result, expect to see
more innovative and creative pricing and delivery models for SaaS consulting that align
better with the cost and value propositions of the software model.

In the realm of CRM deployments, the greatest implementation challenges, especially

for larger enterprises, center on business process strategy and alignment, integration,
change management, and training. None of these issues go away with SaaS deploy-
ments, so the meat of the business consultants’ engagement model still largely applies
regardless of delivery model. And the SaaS providers themselves simply can’t scale to
meet large enterprise demand, nor are they equipped to deal with the demands of enter-
prise IT departments, leaving plenty of spoils for partners.

4 © 2008 AMR Research, Inc. Application Consulting and Outsourcing Service Report | June 2008
SaaS product development services

The demand for service providers that can help ISVs move from their traditional on-
premise product to a continuously delivered service is growing. The ISVs’ customers are
looking for capabilities rather than software and want to shift much of the technical
and administrative burden back to vendors or service providers, in many cases having
the third party physically host applications as well. Traditional licensed, on-premise
software vendors have never developed software that addresses these new demands—
until now.

They need help. There is also a new generation of companies where SaaS and other
service-based models are status quo. Google, salesforce.com, and Facebook are well-
known examples. Furthermore, emerging “software” companies, the ones that get fund-
ing anyway, are almost never selling licensed, on-premise products. The opportunity?
Service providers addressing these segments in addition to their traditional development
services are growing between 20% and 40% annually.

Ongoing SaaS infrastructure, application, and process support

The ongoing care and feeding of SaaS is another rapidly expanding service area. Often,
companies are providing both product development and these expanded support ser-
vices. Many ISVs and SaaS vendors would rather rely on service provider partners to
handle the ongoing administrative and technical challenges associated with the new
model.

Just as the ultimate SaaS buyer is handing technical quality and operational responsi-
bility back to the vendor, the vendor is looking around to see who has experience with
hosting and maintaining infrastructure, ongoing monitoring and billing, and other ser-
vices they’ve never had to deal with before. This allows the vendor to focus its time and
energy on sales, marketing, and serious client issues as well as new service development.
Service providers doing ongoing services for SaaS vendors in addition to their tradi-
tional application and infrastructure support business are, likewise, growing at a rate of
20% to 40% annually.

Application Consulting and Outsourcing Service Report | June 2008 © 2008 AMR Research, Inc. 5
 The providers
AMR Research talked to 15 service providers actively addressing the SaaS opportunity.
Table 1 indicates that most have a focus primarily on implementation of SaaS applica-
tions for users or development and support services targeted at ISVs. As both market-
places are fairly nascent, hurdles for participation were modest. We asked only that the
service provider have a formal SaaS strategy, be working with clients on SaaS projects,
and be willing to talk to us for one hour about both. References were optional.

We were interested in the service provider’s stance on SaaS as a business model.

Naturally, those that chose to participate in this Report are pretty bullish on SaaS or
they wouldn’t be here. The handwringing and uncertainty we saw eighteen months ago
when we initially tried to launch this project were nowhere in sight this time around.
These service providers have executive sponsorship, investment dollars, and new go-to-
market approaches that now include SaaS alongside their traditional enterprise applica-
tions business as well as newer areas, like service-oriented architecture (SOA).

Table 1: Service providers focus on different SaaS opportunities

Support
Services and
SaaS Product Outsourcing Build Own
Consulting and Development for SaaS Multitenant
Company HQ Location Implementation Services Vendors SaaS/BPO IP
Accenture Bermuda √ √
Avanade Seattle, WA √ √
BlueWolf New York, NY √
Capgemini Paris, France √ √√ √√ √
Cognizant Teaneck, NY √ √ √√ √√
Fujitsu Consulting Edison, NJ √
HCL Technologies Noida, India √√ √ √√ √√
IBM Global Business Services Armonk, NY √ √
Inforte/Business & Decision Paris, France √
Infosys Bangalore, India √
OpSource Santa Clara, CA √ √
Sierra Atlantic Fremont, Ca √ √ √
Symphony Services Palo Alto, CA √ √
TCS Mumbai, India √ √√
Wipro Bangalore, India √√ √ √ √√
√ = Have customers today Source: AMR Research, 2008
√ √ = Current or planned offering; no live customers

6 © 2008 AMR Research, Inc. Application Consulting and Outsourcing Service Report | June 2008
 Emerging platform-based services and BPO poised to compete with
SaaS vendors

Alongside the proliferation of SaaS vendors into the enterprise, many large service
providers have been developing their own offerings that echo the SaaS model. The idea
is to get to a multitenant service-as-a-service model with a SaaS-type engine underlying
the product, which often will have be domain specific or even be wrapped in a business
process outsourcing (BPO) layer. Look for service providers with strong traditional ERP
services businesses and BPO arms getting into this business.

The ultimate goal? For multitenancy and shared support staff to liberate service providers
from the razor-thin margins of standard production support and BPO engagements.
The software core of these services could be an OEMed SaaS vendor, a traditional lSV’s
product, or service-provider-developed intellectual property.

Accenture

Accenture was one of the earliest consulting firms to put a stake in the ground on a
SaaS strategy, dating all the way back to 2005. At a salesforce.com conference in New
York, the two companies announced a partnership for implementation services. Both
recognized that for salesforce.com to move into larger enterprise deployments, they
needed to publicize the fact that SaaS did not mean all the challenges with traditional
CRM implementations ceased to exist. This event marked some of the earliest recogni-
tion that SaaS was not only here to stay, but also moving upstream.

Accenture already had established practices for other leading on-premises CRM vendors
like Oracle and SAP, so as salesforce.com expanded and began competing in some of
the same enterprise deals, it made perfect sense for Accenture to move with customer
demand. Within its broader initiatives around cloud computing, Accenture provides
strategy and planning, implementation, and post-implementation services for salesforce.
com (and potentially other SaaS providers). To date, the company has worked on over
45 salesforce.com deployments, largely for existing customers.

Accenture also targets conversion projects for vendors, where it provides scope, strat-
egy and planning, custom development, and architecture resources as well as post-
implementation application and service management. Accenture is also considering
SaaS strategies such as offering its own applications, or assisting enterprises that want to
build SaaS applications for internal use or resale.

Application Consulting and Outsourcing Service Report | June 2008 © 2008 AMR Research, Inc. 7
 Avanade

Formed in 2000, Avanade is an IT services joint venture between Accenture and

Microsoft that specializes in Microsoft technologies. The company has three main
clients: end users, Microsoft, and Accenture. In the SaaS ecosystem, Avanade pro-
vides both application and infrastructure services, including general SaaS consulting.
With Microsoft, Avanade is working on developing a multitenant version of Microsoft
Dynamics AX, implementing Microsoft CRM Live, and also working with Accenture
to develop a platform for one of Accenture’s new BPO ventures.

The next step is to inject industry-specific features, most likely targeting financial ser-
vices, media and entertainment, and consumer goods and retail, and integrate SaaS
offerings with Microsoft’s native online service offerings, including SharePoint. The
company has few live SaaS customers—it has implemented six on CRM Live—but it’s
clear that Avanade views SaaS as a strategic imperative across its business lines.

BlueWolf

BlueWolf stands out in the crowd of consulting firms because the company is built
from the ground up specifically for SaaS implementations and integrations. Founded in
2000, BlueWolf not only targets SaaS projects, but also structures its entire engagement
model to align with the same faster, lower risk appeal of the software delivery model.
For example, BlueWolf is structured to handle higher volume, shorter lifecycle engage-
ments and even offers a guaranteed success program, where the customer doesn’t pay
until tangible value is derived. Projects are typically built around a 90-day timeframe
to help clients concentrate on a discrete set of achievable goals, further reducing risk of
scope creep.

BlueWolf claims over 1,000 customers to date with roughly 180 active projects going
on at any given time. The company provides technology and business consulting ser-
vices largely for CRM and HCM processes. BlueWolf has even developed its own set of
integration tools for linking together SaaS and on-premises applications. In addition to
traditional consulting, BlueWolf also offers IT resourcing, remote database administra-
tor (DBA), and training services. BlueWolf has customers in financial services, media,
and manufacturing.

8 © 2008 AMR Research, Inc. Application Consulting and Outsourcing Service Report | June 2008
Capgemini

Capgemini has selected four different SaaS-related business opportunities on which to

focus:
• Consulting on and implementing SaaS applications
• Independently repackaging existing ISV functionality and delivering it via SaaS
• Developing its own industry-specific flavors of SaaS
• Managing the integration between SaaS and the enterprise

There is talk of a fifth opportunity, selling consulting, application management, and

infrastructure management services to SaaS vendors, but Capgemini is not yet actively
pursuing this market.

Capgemini itself is using a number of SaaS or native web applications internally,

including salesforce.com, Google Apps, Writex, and a few others from smaller vendors.
Its first foray into SaaS implementations was with NetSuite. The company has four
current salesforce.com engagements and delivered five in the last year. The pipeline for
salesforce.com, specifically, is large. HCM vendor RightNow looks to be the next main
implementation opportunity. Consulting on and managing the integration between
SaaS and the enterprise is a modest but rapidly growing business, as it is for other par-
ticipants in this Report.

Cognizant

Cognizant formally pulled together a SaaS consulting and implementation group

last year, focusing on three products: Oracle CRM On Demand, salesforce.com, and
Microsoft Dynamics. Cognizant sees two different types of SaaS engagements in its
client base. The first could be characterized as big bang enterprise SaaS: hundreds or
thousands of users with heavy integration to the client’s existing systems. The second
is where clients start out small, with a divisional solution, gradually deploying SaaS to
additional areas of the business. The company is involved in a number of on-premise
replacement projects as well.

Cognizant often gets involved with clients during product selection, where they are see-
ing surging interest in SaaS as a viable alternative to traditional on-premise software.
This puts the company in an interesting position: Its traditional Oracle CRM practice
is quite strong. To date, the company has worked on 15 salesforce.com engagements.
The company has two Oracle CRM On Demand implementations under its belt and
five Microsoft Dynamics implementations. Elsewhere in the SaaS ecosystem, Cognizant
also helps technology and services clients re-architect and deliver tools and applications
via a SaaS model. For example, it helped an online marketing company put together
a multitenant business intelligence (BI) solution based on Informatica, Cognos, and
Oracle technologies. Cognizant has 17 customers that view and analyze their data on
the platform.

Application Consulting and Outsourcing Service Report | June 2008 © 2008 AMR Research, Inc. 9
 Fujitsu Consulting

Fujitsu Consulting follows a traditional enterprise application consulting model for

SaaS providers, including salesforce.com, Informatica, and Business Objects, an SAP
company. A salesforce.com partner, Fujitsu Consulting specializes in larger global
enterprise deployments primarily in sales force automation (SFA) for financial services,
manufacturing, and telecommunications firms. The company does have a specialized
SaaS practice, but one that works closely with the other horizontal practices, such as
CRM. Fujitsu also offers a specialized salesforce.com implementation practice in the
UK, Australia, and is building a practice in Japan.

Fujitsu Consulting’s SaaS consulting practice began in 2004 and last year acquired a
New York-based firm called OKERE, which specialized in SaaS CRM projects. The
acquisition helped grow its SaaS business another 30% to 40% last year. The company
reports taking on more custom development and integration projects as more customers
are building hybrid SaaS and on-premises architectures. The company claims roughly
75 enterprise SaaS clients, all of which include salesforce.com implementations and
some with integrations to Informatica or Business Objects.

HCL Technologies

HCL’s main play in the SaaS ecosystem today is enabling product engineering and sup-
port services for ISVs. HCL has provided these types of services for years to software
vendors, through the switch from mainframe to client-server, from client-server to web,
and from on-premise to SaaS. Today it works with approximately 30 ISVs, helping
them migrate from on-premise to SaaS, including four household-name ISVs. Most are
enabling software and tool vendors, but HCL’s client base also includes a number of
business application vendors.

Sometimes HCL is helping clients migrate an entire product set, but there are also cases
where select modules only have been targeted for SaaS treatment. HCL’s traditional
infrastructure expertise is a boon in these engagements, where the goal is to engineer
a smaller footprint that’s more compatible with on-demand computing and today’s
smaller data centers.

In late April, HCL launched its AGORA SaaS delivery platform, which brings together
all the services an ISV or service provider might need to move to and deliver the SaaS
model, including single sign-on, service management, metering, billing, customer sup-
port, and integration services. HCL is targeting specialist ISVs and service providers
that serve the real estate, financial services, and telecommunications and media sectors,
looking for long-term relationships that give it ongoing development, support, integra-
tion, and implementation opportunities.

10 © 2008 AMR Research, Inc. Application Consulting and Outsourcing Service Report | June 2008
IBM Global Business Services

IBM Global Business Services began SaaS projects in 2007 largely as a part of the
company’s customer relationship management practice. Because of the large enterprise
customer base, IBM views Oracle CRM On Demand and salesforce.com as the leading
enterprise-ready SaaS CRM applications. In addition to application consulting, IBM
Global Business Services is building financial models and functional fit models around
both Oracle CRM OnDemand and salesforce.com. These are then used as tools to
demonstrate the pros and cons of SaaS to executives evaluating the model versus on-
premises software options.

In addition to traditional application consulting, IBM is also developing hard and edu-
cational assets. The company built a utility that can reduce traditionally slow SaaS data
conversions from weeks to days—up to 10 million records in a single weekend. While
a relatively new part of the business, IBM Global Business Services engaged in about
a half-dozen SaaS projects in 2007 and have already engaged in over a dozen in 2008.
SaaS projects are originating equally from existing clients as well as new clients.

Inforte

Inforte, now part of the Business & Decision Company, has specialized in consult-
ing services for customer management. Its core SaaS strategy falls within its CRM
implementation business, which makes up about a quarter of the company’s revenue.
SaaS implementations are handled as part of the firm’s CRM practice, which includes
Oracle, salesforce.com, and SAP as well as digital marketing and marketing analytics.
The majority of the SaaS business for Inforte is on salesforce.com deployments or devel-
opment work on the salesforce.com platform.

Inforte currently engages in CRM projects across delivery models and has no separate
North American group just for SaaS. However, it is building some specialized SaaS
expertise in Europe where the model is more nascent. To date, Inforte has engaged in
25 to 30 SaaS projects with midsize customers and several vendor selections for larger
enterprises. The broader CRM practice works with companies across industries, includ-
ing banking, insurance, telecommunications, and life sciences.

Application Consulting and Outsourcing Service Report | June 2008 © 2008 AMR Research, Inc. 11
 Infosys

Infosys is pursuing a twofold SaaS services strategy, with the overall goal of helping its
customers (nearly all large enterprises) understand how to take advantage of the poten-
tial benefits of the SaaS delivery model, even as most of their operations are supported
by traditional ERP and legacy infrastructure. Infosys views SaaS as an adjunct to the
many delivery models it already offers clients: projects, managed services, outsourcing,
and business process outsourcing. One interesting consulting offering from Infosys is a
“SaaS-ability” index, where it looks at what the client has and identifies where SaaS can
and should play a role.

In the SaaS-enabling category, Infosys is working with one large software vendor to
determine where it can move from an on-premise to a SaaS delivery model. But for the
most part, Infosys will develop its own core intellectual property (IP) for multitenant
business platforms or partner with large ISVs for niche functionality it can deliver in a
one-to-many fashion. Segments Infosys has identified as potential candidates for this
are the governance, risk management, and compliance (GRC) market, Web 2.0 and
other platforms for social computing, and specific applications for the manufacturing,
retail, and insurance industries. Infosys has a partnership with salesforce.com, but does
not yet have salesforce.com clients.

OpSource

OpSource was founded in 2002 specifically to provide infrastructure and services to

SaaS and web-based software applications. The core of the service is the OpSource
On-Demand platform, which handles the hosting and application management for
SaaS vendors. Because of the mismatch between the cost structures and revenue
streams particularly for early stage subscription-based vendors, OpSource offers its
unique Success-Based Pricing. This unit-based pricing model allows customers to
pay based on the number of customers rather than a large up-front cost. This allows
OpSource’s customers to receive quality hosting service and support at an early stage in
the company lifecycle.

In addition to core hosting services, OpSource also provides additional products includ-
ing OpSource Connect for web services integration, OpSource Analytics for customer
monitoring and analytics, OpSource Billing for subscription provisioning and billing,
and SaaS Enablement for vendors evaluating SaaS readiness. OpSource works with
SaaS providers predominantly between $10M and $100M in revenue. Roughly two-
thirds of customers are organic SaaS vendors, with the remaining third being license
software companies with SaaS products.

12 © 2008 AMR Research, Inc. Application Consulting and Outsourcing Service Report | June 2008
Sierra Atlantic

Sierra Atlantic is both a consulting and IT services company for users and an ISV
development partner. The advent of SaaS has compelled the group to put together its
know-how across different lines of business. The company acts as a partner to ISVs for
both SaaS product development services as well as deployment and support. Especially
for larger implementations, the company lends its global delivery model to ISVs to get
applications live faster. Sierra Atlantic is a product development and deployment part-
ner for Oracle CRM On Demand and has also integrated salesforce.com to SAP-based
back offices. To date, the company has done one SaaS implementation (through its rela-
tionship with Oracle) and is in the middle of another.

Sierra Atlantic is making the biggest splash in the SaaS world in product development
and support services for vendors. These engagements usually take one of two forms.
One is to SaaS-enable a traditional tool application. The other is providing web services
integration between salesforce.com and other applications. The idea is to make the SaaS
application continuously interoperable—it’s a perpetual managed testing service. Today,
Sierra Atlantic has eight ISV clients to which it provides various SaaS services. Four are
live and commercial, and four are works in progress. The client set includes one ISV
that targets the life sciences and financial services segments, and one that targets the
telecommunications industry.

Symphony Services

Symphony Services, a software development services veteran, identified SaaS as a key

strategic area roughly 18 months ago. The company has long-time relationships with
ISVs, as well as a number of Internet-based software companies. Today the company
has a formal product development partnership with Oracle CRM On Demand and a
more recent one with salesforce.com. Symphony has formed a SaaS center of excellence
to pull together its expertise on helping clients make the shift. Much of the center’s
mandate is to help employees understand SaaS and how engagements may differ from
traditional on-premise ISV development projects from the sales cycle through devel-
opment and testing. Presently, the business is split into 20% SaaS and other remote
application, tool, and software infrastructure development, and 80% traditional ISV
development. Symphony doesn’t do much ongoing support; it partners with OpSource
when there is a client need.

Currently, Symphony Services is helping five traditional ISVs migrate to the SaaS
model. It also has approximately a dozen native Internet businesses it develops software
for on its roster. References were optional for this research since it is the early days and
the market is fragmented. Symphony was one of the few participants to give us a mean-
ingful reference that demonstrated the full range of its capabilities, from SaaS business
and architecture advisory through to execution.

Application Consulting and Outsourcing Service Report | June 2008 © 2008 AMR Research, Inc. 13
 TCS

TCS started getting involved in SaaS implementation projects roughly two years ago. It
has implemented both salesforce.com and Oracle CRM On Demand during that time
and is also getting ready to do a Rightnow.com implementation. The company has 10
salesforce.com clients of its own and also works with Salesforce.com as a services part-
ner where it has worked on dozens more engagements. TCS’s four Oracle CRM On
Demand implementations have been through Oracle’s professional services group.

TCS has focused more on implementations than on SaaS-enablement for ISVs, though
it has helped a few clients port their applications to salesforce.com via salesforce
AppExchange. TCS’s developers have also developed some salesforce.com-associated
tools for ISVs. TCS’s traditional ISV partnerships, custom solutions, and BPO lines of
business are also extremely active and growing, and could provide the basis for other
SaaS and SaaS-like platform initiatives in the future.

Wipro

Wipro has put considerable effort into building a SaaS-enablement program for ISVs,
including consulting on what SaaS will mean to the company’s business model, opera-
tions, and technology. Wipro calls the subsequent program, i.e., the execution phase,
SaaS Enabler. During this program, it re-architects the product and integrates it with
products or services that provide metering, billing, identity management, and payments
functionality. To date, the company is working with three ISVs on this program. Wipro
is also able to provide or partner for hosting and infrastructure services according to cli-
ent preference.

For SaaS implementations, Wipro offers consulting and integration services for its tra-
ditional enterprise export services customers and is also seriously targeting the Indian
market. It has eight implementation customers, three of which are live on SaaS solu-
tions. Wipro also has plans to take selected domain-specific, proprietary single ten-
ant solutions and offer them up as multitenant applications. These include a payment
exception processing solution for financial institutions and a solution for the medical
device industry.

14 © 2008 AMR Research, Inc. Application Consulting and Outsourcing Service Report | June 2008
Recommendations

For users of enterprise software

Users already have some great choices for enterprise salesforce.com implementations,
and we expect to see more proof points for Oracle CRM On Demand, Microsoft
Dynamics, and BI and performance management tools.

There are also consultants that have gone one step further to help users understand how
SaaS applications can be integrated into traditional environments. Additionally, they
help users build a roadmap for understanding, as they move ahead, which software and
business service delivery scenarios make the most sense for them.

For ISVs seeking SaaS product development and support assistance

Product development and support providers we interviewed (again see Table 1) all have
the necessary skills to take an on-premise product, advise on the technical feasibility of
moving it to a SaaS platform, and then execute the design, coding, and testing neces-
sary to support the migration. Many also provide the security, billing, monitoring, and
customer support necessary to support the vendor on an ongoing basis.

One potential fly in the ointment is that many service providers that pitch product
development and support services also aspire to bring their own SaaS-like multitenant
BPO offerings to market. This is particularly true with the Indian service providers.
Ensure that your service provider has no designs on your domain, or, alternately, con-
sider partnering with them to form the IP core of an enhanced multitenant service.

One area where we failed to find a critical mass of skills was in the strategic or manage-
ment consulting services that would presumably be necessary to see if it makes funda-
mental business sense for the ISV to replatform and move to a recurring revenue model.
These complex math and modeling services are best sourced from management consul-
tancies and specialists rather than the providers in this Report.

Application Consulting and Outsourcing Service Report | June 2008 © 2008 AMR Research, Inc. 15
 For implementation, product development, and managed service
providers

SaaS and platform-based delivery models are big trains that today’s service providers
can’t afford to miss. While there are still millions to be made on bread-and-butter sys-
tems integration and product development, sales forces, consultants, developers, support
teams, and implementation and development methodologies will all need to be retooled
to address the SaaS market’s different dynamics.

There is opportunity and margin on the implementation side that as recently as one
year ago was not recognized by mainstream consultants and integrators. Take into
account the business and IT consulting and integration work necessary to gradually
mainstream SaaS into enterprise environments, and there starts to be a pretty attractive
silver lining in the shift from on-premise to SaaS.

For services targeted at ISVs and native SaaS vendors, likewise, this market is just start-
ing to gear up. All major traditional software vendors are hard at work making the
shift. Furthermore, take a look at what types of vendors and applications are getting
venture funding and generating market interest: 90% are service-based and delivered
remotely.

16 © 2008 AMR Research, Inc. Application Consulting and Outsourcing Service Report | June 2008
 Notes

Application Consulting and Outsourcing Service Report | June 2008 © 2008 AMR Research, Inc. 17
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