Over seven years ago, Taleo was faced with a key strategic technology decision: Are software applications delivered as a service the trend of the future?
In other words: Is it a good decision for Taleo to continue to invest heavily in the on demand model?
Today it seems more like a rhetorical question as the on demand model has been proven by similar innovators like Salesforce.com and endorsed by the largest technology companies like IBM.
But what is the difference between all those acronyms? What is their definition? Is the on demand model here to stay?
On demand has been called a business model that is agile, fast to react, and that leverages a shared infrastructure and a subscription model as described in AMR Outlook.
ASP stands for application service provider. This model has recently shrunk in scope. At best, it is now merely synonymous with Hosted Application Management. ASP is limited to hosting applications for companies that were bought and web-enabled. This is a halfway alternative with traditional on-premise license packaged software and an evolutionary step towards total outsourcing.
SaaS stands for software as a service. Many define the concept as a software solution that is designed specifically for a web delivery and supported by a vendor as a service.
Recently some companies opted for hosted native web applications on site. This is a minor odd trend and seems to be missing the economy of scale of the on demand model.
But is the on demand model here to stay?
On demand is a significant force according to analysts. The growth for on demand software for the next four years will be 21% vs. 4% CAGR for the on-premise model, as described in a THINKstrategies paper.
The first benefits are mainly cost and often driven by avoiding the pain of needed upgrades. But as described by IDC research: Current software on demand adoption is just the tip of the iceberg.
So maybe our technology bet was not too bad. Taleo has been the on demand talent management pioneer and is probably one of the largest SaaS providers in terms of data hosted with approximately 80 Terabytes!
