2. All Contents © 2006 Burton Group. All rights reserved. Burton Group Take 5! Software Smackdown – SaaS vs. Traditional Software Applications Lyn Robison, Analyst, Application Platform Strategies March 19, 2007

3. 2 Burton Group Take 5: Software Smackdown Software form factors - When is SaaS best? Software as a service (SaaS) Commercial off-the-shelf software (COTS) Custom developed software (CDS)

4. 3 Burton Group Take 5: Software Smackdown Benefits, Drawbacks, and Demands Organizational burdens? Organizational flexibility? Conforms to technical architecture? Financial considerations? Risks?

5. 4 Burton Group Take 5: Software Smackdown Custom Developed Software Organizational burdens? Development, documentation, and support Organizational flexibility? No need Conforms to technical architecture? Yes (until it changes) Financial considerations? High initial costs Risks? Implementation risks are high

6. 5 Burton Group Take 5: Software Smackdown Commercial Off-The-Shelf Software Organizational burdens? Operations and some development Organizational flexibility? Org must fit software Conform to technical architecture? Perhaps Financial considerations? Variable costs (coarse- grained) Risks? Relatively low

7. 6 Burton Group Take 5: Software Smackdown Software as a Service Organizational burdens? Some development Organizational flexibility? Org must fit software Conform to technical architecture? No Financial considerations? Variable costs Risks? Try before you buy, but data lives outside

8. 7 Burton Group Take 5: Software Smackdown And the winner is… CDS offers the potential for competitive advantage COTS offers operational efficiency for generic business processes SaaS offers the fastest time to value for generic business processes

9. 8 Burton Group Take 5: Software Smackdown The Future of Software Locally-hosted SaaS SaaS and SOA SaaS and smart clients

10. 9 See Burton Group’s Application Platform Strategies upcoming overview, “Build, Buy, or Borrow: Choosing Custom Development, Open Source Software, Commercial off-the-Shelf Software, or Software as a Service,” for references and more information