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SaaS: integration in cloud

By Judith Lamont, Ph.D
KM World Magazine
1st January 2010
The advantages of software-as-a-service (SaaS) products are well recognized by now: lower cost of entry, minimal demands on IT and easy upgrades, as well as more rigorous security than can be provided by many small to medium-sized businesses (SMBs). But what happens when a company is using multiple SaaS applications that need to communicate with each other, or when SaaS applications need to access information contained in on-premise or legacy applications? At that point, businesses are “in the cloud” and will likely need some help in integrating multiple services.

“The value proposition of cloud computing is that it allows companies to focus on their business activities, and not on their IT functions,” says Daryl Plummer, management VP and Gartner Fellow at Gartner. “However, it’s important to get all the applications working together toward the organization’s business goals.”

Moving to the cloud

AWPRx provides pharmacy benefits management services for workers’ compensation organizations. Through its Direct Access software and aided by its Client Protocol Guide, AWPRx validates prescriptions and notifies its clients when medications are filled or need an approval. The company has contracts with more than 60,000 pharmacies that reduce prescription costs for their clients, and an automated prescription process that reduces workers’ comp fraud.

Poised for significant growth, AWPRx was hampered by management and maintenance of its current IT environment. The company took some interim steps, such as moving to a storage area network environment. However, to eliminate the complex IT infrastructure required for its databases and transaction processing, AWPRx decided to move all of its IT functions to the cloud.

The Direct Access application has been relocated to force.com, a cloud computing platform as a service (PaaS) offered by Salesforce. Additionally, AWPRx opted to store its data in EC2, the “elastic cloud” solution provided by Amazon. “Moving to EC2 offered the promise of essentially unlimited and flexible storage at a much lower cost,” says Jay Roy, CEO of AWPRx, “and would let us get out of the server business entirely.”

A potential obstacle to a cloud-based infrastructure was the fact that the Salesforce platform does not connect natively to the many data sources on which AWPRx relies. Through its relationship with Salesforce, AWPRx discovered Jitterbit, an integration platform for on-premise and cloud-based applications.

“We tested Jitterbit thoroughly,” Roy says, “processing every client file and confirming the workflow. Jitterbit was able to provide the same functionality that we had with our in-house database software.” Reports that formerly would have required a request to be sent to IT can now be generated by department managers and processed in 10 to 15 minutes.

Jitterbit serves as the interface between force.com and third-party databases such as pharmacies, providers and the insurance companies that are AWPRx’s customers. Rather than storing provider data, AWPRx uses Jitterbit to look up what’s needed. Once it picks up data from the pharmacy, Jitterbit extracts data from the pharmacy database and other information sources as needed, and routes the data to Salesforce. The data flow is bi-directional; for example, Salesforce provides information to the pharmacy about what prescriptions the worker is entitled to, and enforces dispensing rules.

AWPRx expects to complete the transition to the cloud-based system at the beginning of February and to begin reaping benefits in many areas. “We now have scalability and replication that we could never have afforded to do with an on-premise infrastructure,” Roy explains. “And with our IT staff no longer required to carry out routine data management tasks, they can now focus on our Direct Access software and other products that provide value for our customers.”

Jitterbit was already offering traditional integration services to its customers, but the process was often cumbersome. “We wanted to expedite integration,” says Ilan Sehayek, CTO and co-founder of Jitterbit. “One way to do that was to look at common integration points and design a product that would let non-programmers define the steps.” Part of the value of SaaS products, he maintains, is that business users can be more self-sufficient. “Putting in a complex integration product negates this because it means that IT has to intervene,” Sehayek says. “Jitterbit returns control to the business users while still allowing them to create sophisticated business processes.”

In the cloud from the start

When Ingres was purchased from CA by an investor group five years ago, its open source database was valued in the millions, but the company had no offices, computers or any other type of infrastructure. Ingres established its headquarters in Redwood City, Calif., and as it rolled out the resources necessary to establish itself as an independent entity, decided that its computer infrastructure would be entirely SaaS-based.

Ingres then selected a core group of enterprise products that included the Salesforce CRM suite, accounting software from Intacct and human resources solutions from ADP. “In our selection process, we gave priority to SaaS software products that were compatible with other products,” says Doug Harr, CIO of Ingres. “We wanted to use best of breed, rather than a SaaS product that tried to do everything but left some of our users unhappy.”

Getting each of those applications in place was just a first step; Ingres then sought a method for integrating them so that they would function together. Ingres narrowed the choices down to the products, each of which had different strengths. Overall, Harr found that AtomSphere from Boomi was the farthest along in its ability to integrate SaaS products. “Boomi already had connectors for the software we were using,” Harr explains, “and it was a true multitenant SaaS product, not a hosted ASP solution.”

Ingres integrated employee-oriented applications such as Salesforce and the HR software from ADP so that activities such as expense reporting could begin as soon as new employees were hired. Next, the company plans to integrate additional products and move its business intelligence (BI) functions to Amazon.com.

“The innovation of the Amazon EC2 service is its elasticity, which allows dynamic provisioning of enough computing and storage capacity to hit peak workloads, and then allows a scale-back,” Harr says. “That elasticity provides greater agility than traditional managed services environments and is priced on a variable cost basis.”

Boomi was founded in 2000 with the goal of simplifying the integration process, and developed products with a graphical interface that eliminated the need to write code by using drag-and-drop techniques to define linkages. In 2006, the company decided to address the issue of integration in the cloud. “We looked at SaaS and were convinced that integration was posing some significant problems,” says Bob Moul, CEO of Boomi. “And without good integration, the full potential of the cloud could not be tapped.”

Launched early in 2008, AtomSphere is an integration PaaS that is used most often by Boomi to integrate cloud and on-premise applications. Only about one-fourth of Boomi’s customers are exclusively in the cloud at this point, according to Moul. Boomi focused on the most popular SaaS software. Connectors have been built for several dozen products ranging from small business software such as Intuit’s QuickBooks, to enterprise products such as Oracle’s Business Suite.

Since AtomSphere itself is a SaaS product, it embodies all the advantages of SaaS, including rapid updating. “When an API is modified, we make the change and everyone gets it at once,” Moul says. AtomSphere also offers ease of use that is consistent with Boomi’s original mission of simplification, with wizards that lead the user through the process of configuring connectors, so that business users are able to define and implement business processes.

Gartner predicts solid growth over the next few years for both SaaS applications and cloud service brokerages. “Organizations have come to the point where they are frustrated with internal IT departments and with the large financial outlays for on-premise software,” Plummer says. “They are actively looking for alternatives, and cloud computing holds a lot of promise for alleviating these problems, as well as providing innovative options for improving business operations.”

Goodbye SaaS Hello SlaaS?

In 1998, eGain launched its suite of e-services in the then-nascent application service provider (ASP) market, precursor to today’s software as a service. Hosted software pioneer and eGain co-founder Ashutosh Roy believed everything belonged on the Web but discovered customers wanted the option of a license, so eGain added on-premise solutions as well.

As time went on and the company grew, “managed services” were added, which bridge the gap between on-premise and hosted environments, allowing customers to still purchase a software license inside the firewall after a hosted contract for, say, a year or two.

Now along comes solutions as a service (SlaaS). “The biggest difference in SlaaS, as the client sees it, is the fact that we are not locking them into a contract. We give them the flexibility to go up and down on a usage-per-month basis, and they can stop their use of eGain whenever they want to,” Roy says.

What’s the catch? He explains, “Customers are ‘paying more for a drink,’ but they still have the option of migrating to a long-term contract when the need arises.”

— Hugh McKellar, KMWorld editor in chief

Building trust in the cloud

Users of individual SaaS products have generally become confident that their vendor is proficient in maintaining security, ensuring that data is backed up and carrying out other support tasks. However, venturing more broadly into “the cloud,” where many applications may be used as services, is a different matter; establishing trust with numerous third-party suppliers is a complex process.

To help address the problem, Vordel introduced the Vordel Cloud Service Broker in November 2009. It manages multidomain cloud services by registering them in a single repository to facilitate monitoring and policy enforcement. Cloud Service Broker also optimizes performance by providing caching, acceleration and data transformation.

A large retailer is using the Vordel Cloud Service Broker to manage connections to an Amazon service, the Amazon Gift Codes on Demand (AGCoD). That service replaces plastic gift cards by distributing them via e-mail, HTML or paper. It is accessed through a Web Service API that exposes Amazon’s technology to other systems. The Vordel Cloud Service Broker provides the necessary authentications and digital signatures. The monitoring capability lets the retailer track service frequency and usage via Flash-based metrics and Web-based reports.

“With the emergence of SaaS and storage as a service, customers wanted to create composite applications that included components from the cloud,” says Vic Morris, CEO of Vordel. “But with this complexity comes the need for monitoring and management.”

Although many companies start with non-mission-critical applications for their cloud services, use is expanding rapidly. “It is a compelling model,” Morris says, “and one that is growing rapidly in the KM space.” Vordel, which has a history in XML and SOA integration, is also exploring the opportunities for matching customers with the burgeoning list of available cloud services.

 Judith Lamont, KMWorld senior writer