Where is my treasury system?
A new report from Gartner predicts that revenue generated from enterprise applications delivered through software as a service (SaaS) will grow by 27 percent in 2008. This of course also covers treasury applications.
27 percent growth is much more than the average for enterprise applications. So what does it mean to buy your next treasury application on SaaS, application service provider (ASP) or through another kind of hosted solution?
When it comes to pure SaaS, several (or all) clients are running on the same system, with the same version, using the same data base. With ASP solutions on the other hand, each customer has their own instance of the software and database installed on the host’s computer(s).
Contrary to the report, I don’t think it’s important whether it is a pure SaaS model or whether it is closer to the ASP model, just so long as the customer knows what they are buying. New systems are often developed as pure SaaS systems, whereas the ASP model is a good way of accessing tried and tested software without having to install the system in-house.
With such growth in outsourced applications there will soon be a lot more companies using SaaS or ASP software for their business applications. We are getting much closer to the promised land of “cloud computing”, where you just use the internet to access whichever application you need, whether that is finding the shortest way to the theatre, planning your new kitchen, keeping in contact with friends and colleagues or managing your liquidity reserves.
For most private purposes we don’t worry about where the application servers are or where the data is stored, we basically trust the provider blindly. It seems to be the direction we are going with enterprise applications too.
Many new applications are specifically developed to be deployed via the internet. As long as we trust the provider there is no need to know where the provider stores the data. However, this should not stop a prospect asking demanding questions about how the data is protected.
Treasury systems are also prime candidates to buy applications as a service, instead of having them installed locally. However, this is probably not to everyone’s liking and some will have a more compelling reason than others.
Some time ago I spoke to the deputy treasurer of a large IT company and asked him what he thought about using a hosted treasury system. He answered that since they themselves are in the IT business (though not hosting), it was their policy to run everything internally to show that they could handle the IT business.
