Strategic Application Outsourcing (Software as a Service)

[Ron Ehlers]

“What do you think about the strategic outsourcing of applications and application support in the retail environment? It has been called many different things (Hosting, ASP, SaaS, Subscription Computing, Cloud Computing), but is not seen often in Retail. It can be done for evaluation, as an interim solution or a permanent approach. Do you see the benefit of implementing functionality at store level where you would have no hardware or software to buy, install or support, and a very short implementation cycle? What functionality leaps to mind for which you wish it would be that easy to put in place? Do you see any applications at corporate that would fit this model? What level of cost savings would entice you to move in this direction? Would today’s economic climate drive you to an approach that would require little or no capital expenditure to deliver new and beneficial functionality to your organization?”

[Ilango]

Hi Ron,
If you really looking for a Saas and DaaS mode of solution, you have to wait for a while.

SAP is coming up with the cloud computing model soon. Already amazon have implemented the FPS module and it is in live for cutomer. It is better to evaluate Amazon FPS for right now..

For rest of the module I think we have to wait for some time.

Hope this answers your question.

Cheers,
Ilango

[Kavindra Malik]

Ron -

I think the answer depends upon the size of the retailer and type of retail application.

Price/revenue optimization area has seen this type of model with some success, in part as the retailers often do not have the right talent to manage the software functionality at home and/or vendor only offers this model.

Like anything else, there is no free lunch. On the positive side, it reduces the initial costs for the retailer of adopting the technology. On the reverse end, the retailer ends up financing the provider's fixed costs and asset accumulation.

In my mind, for technologies that less central and/or where it makes sense to preserve the ability to switch - such as price optimization solutions offered by vendors, loss prevention solutions may be good candidates. I think this can be a good interim solution while company 'pilots' a technology or needs an interim solution.