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The Truth Behind the Hype Behind Software-as-a-Service (SaaS) LIMS, Part One

There is significant interest in on-demand Software-as-a-Service (SaaS) solutions due to increasing dissatisfaction with the costs, complexities, and length of time that it takes to realize value from on-premise application investments. As a result, many LIMS vendors are now offering SaaS versions of their software. These SaaS LIMS replace large upfront fees and costs with periodic payments at a fraction of the price, thus offering cost-effective alternatives to traditional packaged applications. This is the first of a two part article that explores the issues involved with understanding and evaluating this new generation of LIMS.

What is Software-as-a-Service?

SaaS solutions are on-demand applications as opposed to on-premise applications. This is because the organization purchases only what is needed, when needed, for only the necessary users instead of purchasing the application for in-house installation on site; i.e., on premise.

Hosted on the Web by the LIMS vendor, the SaaS LIMS is priced on a subscription basis based on the number of users or seats and paid for as it is consumed. Because the vendor is responsible for delivering and managing the service, the SaaS business model eliminates maintenance agreements and enables labs to leverage an application’s functionality without the burden of application deployment and management (Table A).

SaaS LIMS also eliminate the added costs and complexities of purchasing and deploying additional hardware and software, or dedicating additional staff resources to support the enterprise application on an ongoing basis. There is basically no software, hardware, or infrastructure to purchase, install, or maintain. Apart from a personal computer and an Internet connection—and perhaps a PDA or barcode reader depending on the laboratory’s applications—all parts of the solution are provided by the SaaS vendor.

Best of all, the SaaS model enables the customer organization to benefit from the vendor’s latest technological features without the disruptions and costs associated with software updates and upgrades.

ASP versus SaaS

The SaaS business model is radically different from the Application Service Provider (ASP) LIMS first introduced in 1999. ASP LIMS were the original web-enabled LIMS, utilizing re-architected code to replace functionality implemented in the client with HTML in order to use the solution over the Internet. A true SaaS LIMS, on the other hand, is a web-based solution. There is a significant difference between web-enabled and web-based.

When ASP solutions were introduced—and these solutions also promoted subscription-based pricing—security issues had not yet been ironed out and the economic environment was not so dire. Now, the SaaS LIMS model has addressed the security concerns as well as provided a truly viable cost alternative. In addition, SaaS LIMS adoption will be driven by the greater understanding of the true cost of on-premise enterprise applications which are proving to be so expensive to acquire, deploy, update and maintain.

“According to industry research, 31.1% of software projects are cancelled before they are completed. Of those software projects which have been completed, over half (52.7%) have taken twice as long or have cost twice as much as originally expected. When on-premise software applications are fully deployed, the maintenance and management costs can be ten times the original license fee.”(1) Indeed, the failure rate of commercial LIMS solutions is commonly estimated to be as high as 60% by industry analysts such as Strategic Directions and ArcWeb.

Further, SaaS LIMS are by design enterprise solutions, and thus deliver high-end functionality that was once only available to large organizations into the hands of small to medium-sized laboratories. These small to medium-sized labs represent a widely underserved market, according to Sciformatix president and CEO Thomas Kent. “More than 80% of scientific labs do not use a professional LIMS. Not because they don’t want to, but because implementing a LIMS has been too difficult, time consuming, and costly. That ‘perfect storm’ of daunting factors includes commercial-off-the-shelf LIMS as well as home-grown solutions.” Instead, according to Kent, most labs still rely on informal systems, such as paper-based notebooks, Excel spreadsheets, or tracking systems cobbled together using tools such as Microsoft Access or FileMaker Pro.(2)

Keep in mind that as with any new application, misinformation abounds. One LIMS vendor has stated that “the main difference between a subscription-hosted LIMS and a direct purchase ‘on-site LIMS’ is the initial cost and total cost of ownership (TCO)”.(3) This is not the full story. The most critical difference lies not in how it is priced, but in the underlying code and how the SaaS LIMS was developed.

On-premise LIMS vs On-demand LIMS

While it would appear that established on-premise applications are ideal candidates for conversion to on-demand versions, this is not always the case. Some very critical changes must occur. Not only must the SaaS one-to-many delivery model be developed using state-of-the-art tools such as Web 2.0, but parts of the operating system may need to be replaced by custom developed modules to provide the required level of support — not always an easy task.

SaaS solutions involve more than developing new code; the Service Delivery Platform (SDP) is also a critical component. The SDP is the set of components that provide the services delivery architecture, such as service creation, session control & protocols, etc. that drive the ability to rapidly develop and deploy the service. Therefore, when reviewing SaaS LIMS consider not only what the service offers and what your organization needs, but also how the service is packaged.

In order for a SaaS LIMS to succeed, not only must the SaaS vendor invest in a comprehensive SDP, but they must also ensure the implementation of security technologies and certification programs that govern data center operations and personnel. These certification programs can include SAS 70, ISO standards, HIPAA, Sarbanes-Oxley, etc. The Statement on Auditing Standards (SAS) No. 70, for instance, is the authoritative auditing standard that judges a service organization’s controls and safeguards over their information technology and related processes. It is important that the SaaS LIMS vendor be able to produce SAS 70 service auditor reports which validate that the service offering conforms to the guidance requirements and thus delivers a secure service.

Rather than attempt to develop a platform outside their core competencies, the SaaS LIMS vendor may partner with an SDP vendor who offers managed services such as application management and database administration. Because many SaaS vendors leverage SDP vendor platforms to deliver the service, it is important to examine the breadth and depth of the SDP, whether it was developed in-house or through a partnership with a SDP vendor, and how well it enables the SaaS LIMS to function in the on-demand environment.

Fortunately, if the service does not meet the lab’s needs, it can be cancelled. The burden of success rests not with the customer but with the SaaS vendor to deliver reliable, scalable, secure services. This enables the laboratory to focus on the attributes of the SaaS solution and determine how well those features and functions meet the lab’s needs, and not on implementation, management and support.

End of Part One. Look for details of SaaS LIMS features and functions as well as how to evaluate SaaS LIMS in Part Two next month.

References
1. CIO’s Guide to Software-as-a-Service: A Primer for Understanding and Maximizing the Value of SaaS Solutions, THINKstrategies, Inc., www.thinkstrategies.com, © 2008
2. Sciformatix Announces Laboratory Information Management System, Breakthrough in Samples and Storage Management for Small/Medium Labs, Corporate Press Release, www.sciformatix.com, January 26, 2009.
3. SaaS – Is a web hosted LIMS right for your laboratory?, LabLynx LIMS Journal, www.limsjournal.com, © July 12, 2009