Individual point tools eventually evolved into suites. As the functionality grew, so did the cost, Probst says. SaaS, however, broke the existing price point model, with ServiceNow at the vanguard, he notes, adding that SaaS ITSM can be deployed at half to three-quarters of the cost of an on-site product, depending on the customer.
Other economic drivers also come into play. Jenny Geisler, treasurer at itSFM USA and principal consultant at Aeritae Consulting Group, says most IT shops are getting hit with depreciation on their capital outlays. "As their expense budgets are chewed up by depreciation expenses, they need to find a different model."
The ongoing cost of maintaining on-premises IT service management may also influence SaaS migration. Shari Brunette, president of itSFM USA and senior consultant at Aeritae, says upgrading to a new release of on-premises ITSM can take a large enterprise 12 to 18 months and cost up to $2 million. SaaS solutions, Brunette adds, let organizations keep more of their IT personnel focused on the business and less on software management.
Adds Doron Gordon: "Not owning and operating your own environment...is important."
Gordon, executive officer of SAManage, a SaaS-based service desk and asset management vendor, says outsourcing not only saves money, it also puts customers in a position to receive more frequent-and useful-software updates.
Recalling his experience at an on-premises tool provider, Gordon says development cycles use to take two to three years. "The outcome of that is you're shipping what you started building years ago, and it's no longer relevant to what the customer needs."
Cloud Offers ITSM Functionality Without Restriction
Cost isn't the only SaaS driver, however. The flexibility of the cloud model also attracts IT buyers.
At Fugro, a desire to pursue ITIL and the inflexibility of its service desk software sparked the SaaS transition. Ismael Carlo, IT manager at Fugro, the U.S. operation of a Netherlands-based multinational company that provides geotechnical and geoscience services, said the company's IT team lacked a formal IT process when he joined the company in September 2011. Fugro, he says, sought to mature its management of IT, but the firm bumped into limitations with its service desk system, Symantec's Altiris.
Carlo says Fugro decided to install a new release of Altiris in a test environment, noting that the software upgrade incorporated a formal IT process. "The problem was the product was very rigid, so we would have to completely change everything we were doing. When we started to use it, it enforced ITIL to the nth degree, and that was really challenging on the service desk team," he says.
Fugro spent about three months trying to adjust to the new software and then began scanning the market for other approaches. The company discovered SaaS as an option. "We realized these cloud vendors have done a pretty good job of capturing our needs," Carlo says.
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