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Virtual Ark Welcomes Gartner Report on SaaS Economics


July 8, 2010 -- Third-generation outsourcing specialist Virtual Ark has welcomed a report by research group Gartner that predicts increased popularity of Software as a Service (SaaS) on public cloud infrastructure.

Called “Public Cloud Infrastructure Helps SaaS Vendor Economics”, the June 4 Gartner report suggests that new and current software vendors will increasingly deliver SaaS through a managed service running on public cloud infrastructure.

Virtual Ark is a globally focussed managed services company, that partners with Independent Software Vendors and provides large enterprise organizations with a unique SaaS – on-demand access to their core business applications in the Cloud on a flexible pay-as-you-go basis.

Virtual Ark Executive CEO & President Marty Gauvin believes the Gartner report provides clear confirmation of his company’s vision of outsourcing trends. “By leveraging existing Cloud service providers, the pay-as-you-go model of 3g-SaaS enables independent software vendors to align licensing as closely as possible to how the customer consumes the application,” said Mr. Gauvin. “This is the central tenet of Virtual Ark’s approach to delivering SaaS because it equips our ISV partners with a strategic advantage over their competitors.”

Established in 2009, Virtual Ark is backed by private shareholding and the investment bank, Baron Partners. Virtual Ark’s key shareholders and management team, which has worked together for a decade, sold their previous company to Macquarie Communications Infrastructure Group for US$64m.

The Gartner report was prepared by Robert P. Desisto, Yvonne Genovese and David W. Cearley, Key findings include that “high capital costs of creating multitenant ‘shared everything’ applications are a major inhibitor for new and current software vendors trying to offer SaaS, causing vendors to seek alternate approaches”.  The report goes on to state that “running a single-tenant application can provide many of the same advantages as multitenant SaaS, if the provider optimizes use of the software application for public cloud infrastructure”.

The report recommends that organizations consider a single-tenant SaaS application running on public cloud infrastructure when faced with constrained IT resources to support a traditional on-premises deployment; a limited capital budget and quick time to deployment requirements. It also suggests the SaaS delivered over Public Cloud infrastructure will suit organizations that want more control and flexibility over release management or need more complex customization.

In fact, Virtual Ark believes that the sophisticated integration and security needs of large enterprises are better suited to single tenant solutions than multi-tenant solutions in addition to the points raised in the Gartner report.

Mr. Gauvin said the emergence of Cloud Computing enabled Third Generation Outsourcing to materially challenge traditional outsourcing models in a way that no previous models had. “Third Generation Software-as-a-Service (3g-SaaS) uses the on-demand flexibility of multiple Cloud infrastructure services from companies such as Amazon, Rackspace and Microsoft to deliver existing enterprise applications more flexibly and more affordable than ever before, globally,” he said.  “Whilst traditional multi-tenant SaaS has been widely used by smaller businesses, the 3g-SaaS model offers substantial competitive advantages to large enterprises through a “pay-as-you-use” system that reduces fixed costs for IT, provides instant access globally and also increased flexibility for rapidly responding to market demands.

Mr. Gauvin said a significant gap had previously existed between Cloud vendors such as Amazon, Rackspace or Microsoft and the customer, such as an enterprise seeking to SaaS-enable a core business application or an Independent Software Vendor wanting to deploy its application in the Cloud. “This effort requires new technologies, processes and new skills,” he said.  “Virtual Ark fills that gap and we believe this Gartner report confirms the value of our vision.”

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Source: Virtual Ark

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