Published on the 26/10/2017 | Written by Jonathan Cotton

Huge opportunities for vendors as enterprises look to modernise legacy systems (and have the budgets to match)…

New research shows that large-scale IT transformation is the order of the day for most organisations, with that pressure driving a shift towards customisation and development.

According to the Telsyte Enterprise Applications and Software Study 2017, almost 4 in 5 enterprises are customising, or considering customising SaaS applications, creating an opportunity for better cloud integration, fit-for-purpose apps, mobility and better user interfaces.

A high rate of corporate software development, combined with the ease at which development can occur in the cloud, is creating a “healthy appetite for PaaS with approximately 70 per cent of Australian enterprises already using PaaS”, or planning to adopt it, the report said, a situation which is likely to apply across the Tasman.

“Developing new products and services is now a top priority for CIOs and the ability to develop applications faster and better integrate disparate data sources has become critical,” said Telsyte MD Foad Fadaghi.

The bullishness of organisations towards PaaS and SaaS development is not surprising, given but the (almost) universality of that positive outlook is heartening, especially for vendors: 85 percent of organisations are looking to increase their PaaS investments in 2017 and beyond. 80 per cent of IT leaders plan to increase their SaaS budget over the next 12 months.

Fadaghi said there is a new focus on the customisation as enterprises look to meet new user expectations.

“Customisation is getting a lot more attention than it has in the past,” he told iStart.

“Consumer expectations are changing, market dynamics are changing and ways of doing business are changing. That’s driving a lot of new investment in SaaS and Paas. We’re finding businesses across both Australia and New Zealand doing a lot more customisation of their applications – even when they’re SaaS applications which are considered less customisable, historically.”

Fadaghi said enterprise SaaS products allow for APIs and provide for PaaS, or the ability to develop for that platform, utilising the infrastructure that that platform provides. “Whether its IBM, Microsoft, Salesforce.com, Oracle or someone else, all of these vendors have platform-as-a-service which allows their customers to get more control in the outcome of their applications. Both SaaS and PaaS have come a long way since their arrival to the market ten or fifteen years ago. Mainstream applications are now delivered through those methods.”

The key to modern software development, added Fadaghi, is that it’s become a lot more cost effective and that trend is going to continue. “The tools and the functionality that you’re going to be able to use developing on these platforms – it’s going to be cheaper, easier and faster than it ever was to build monolithic software products in-house. That’s changed a lot, even in the last three or four years. It’s just becoming a lot easier for organisations to take control of what the software does in their business.”

And, while some like head of service integration at Qantas Adam Martin are saying that ‘vanilla is my favourite flavour’ (on stage at a recent ServiceNow conference), Fadaghi has a very different view. “If you’re trying to build competitive advantage, you’re not going to get that from cookie cutter applications off the shelf. You’re going to have to dig your teeth into it and customise it to bring value out.”

Though machine learning and AI functionality is grabbing the most headlines, most CIOs still consider core operational features, upfront costs and return on investment to be the main factors influencing the procurement of enterprise applications.

So does this signify a new boom time for SaaS and PaaS vendors?

“It depends on where the market is in terms of its investment cycle,” Fadaghi told iStart.

“A lot of organisations have already undergone widespread IT transformation but for some organisations it’s still in the embryonic stage. It all comes down to how IT strategy is being viewed in by the organisation. If it’s still seem as primarily an operational part of the business then it’s probably not seeing the kind of investment that you would in organisations that view IT as a transformation or innovation centre for the business.”

That, in Fadaghi’s view, is the key to success. “The challenge for most organisations, regardless of industry, is about staying relevant in a fast changing world.”