The Evolution of SaaS in Government

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In the early days of SaaS, numerous models of providing software as a service emerged. A common model involved pairing license software with managed hosting as a service.  In this model, the software could be hosted within an agency’s datacenter, a commercial data center, or on a commercial cloud like Azure or Amazon Web Services (AWS). For the Federal Government, software could be implemented via any approved Infrastructure as a Service (IaaS) offerings listed at FedRAMP.gov.  The software itself, however, was not rearchitected for a SaaS environment. It was simply the same monolithic application, and the customer was not reaping the full benefits of a SaaS based technology.  

These early models cobbled together multiple vendors for a full solution. This integration-based approach caused problems for regular maintenance including addressing security vulnerabilities. Total system performance and costs are also issues because the traditional software that was placed on IaaS was not built for the Cloud and therefore is not taking advantage of the Cloud’s key benefits such as automatic updates, auto-scaling, and multi-tenancy.  To overcome these challenges, significant resource and financial investment is required, and the software license itself is only a fraction of the overall cost of ownership of these solutions.  

The SaaS model also offered customers a shift from capex to opex, where the service was operational in nature.  However, this is just one value proposition for the Cloud.  While in many cases the new IaaS platforms were being used, little had changed at the application layer or in the support and maintenance models, so vendors were still operating under higher costs structures and were unable to pass along true costs savings to clients.  

The Evolution 

In parallel, born-on-the-cloud vendors started to prove the capability and cost advantages of the Cloud, offering multi-tenancy and leveraging cloud services to drive down costs and pass those savings onto customers. This drove traditional software vendors to reinvent and rearchitect their offerings.  This reinvention led the industry to create what we’ll refer to here as COTS SaaS – Commercial Off the Shelf (COTS) cloud offerings.  Like COTS IaaS (ex: AWS and Azure), COTS SaaS offerings are now abundant.  

Don’t Be Fooled 

A COTS SaaS offering is a turn-key solution from a single vendor.  The vendor not only provides software optimized to run on one or more IaaS platforms, but the continuous updates and operation maintenance and support for the full technology stack.  As agencies move to SaaS, it is imperative to consider whether the SaaS offering is truly COTS.  If an agency takes traditional software, has an integrator or intermediary put that software onto a cloud infrastructure, and perhaps has a 3rd party do the implementation, integration and/or support – that is actually GOTS SaaS (Government Off the Shelf).  The agency runs the risk of substantively higher ongoing costs and limited innovation over time due the integration complexity for their specific environment versus a COTS SaaS offering that may support hundreds if not thousands of customers.  Important questions to ask include: 

  1. Does the software vendor provide a Cloud-based application, or is this a monolithic application housed in the Cloud? 
  2. Is the software vendor providing the ongoing maintenance, security, support and innovation for the application? Or is there a 3rd party, integrator or intermediary involved? 
  3. Do upgrades and maintenance occur regularly? Do they require system downtime?
  4. Does the vendor provide a broad ecosystem of plug-and-play technologies? Or will customizations be required to meet requirements? Are integrations seamless to the end users?
  5. Does the solution meet security requirements as-is, or is there work yet to be done? Who will do that work? Who will bear the cost?
  6. How many others customers use this solution as-is? How many end users does that represent?
  7. Who is responsible if there are issues with the solution? The vendor? The integrator?

Looking forward 

Moving forward, software vendors will release new functionality and innovations into their cloud-based offerings first.  And, software companies will continue to make multi-million-dollar investments in their turn-key SaaS offerings to create stronger value propositions for their customers at a better price than they once paid for just software licenses alone.  Eventually, software vendors will sunset their older software and hosting options, opting for the more advantageous cloud and SaaS offerings.   

Those customers who chose to create their own SaaS by placing enterprise licenses on an IaaS and then having separate entities provide integration and ongoing maintenance will be at a significant disadvantage. Those systems will become antiquated as traditional upgrade processes and lack of new feature sets create a bigger divide between those systems and COTS SaaS offerings.  Choosing COTS SaaS today enables customers to afford all of the benefits and safeguard their investments well into the future. 

For more information on Blackboard SaaS offerings, visit: https://www.blackboard.com/industries/government .