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This has been a formidable discussion.   I want to weigh in on the question of the value proposition in using SaaS or Saas-like services.  

Moving to a culture that lives and breathes cloud-based services and the like is a core part of our current campus IT strategy.  The hard part is not in finding SaaS vendors (they are everywhere), it is in finding vendors who are committed to working closely with our community.  Last winter, when Gabe Youtsey and I gave an Educause Live! Webinar on Cloud Computing, Gabe noted that while the technology starts the conversation, the cultural alignment is what makes it succeed.  We are a major user of an externally-hosted Sakai instance.  Our needs are not tidy: our application eats bandwidth and managing the peak loading across several networks is very challenging; integration between the external Sakai service and our complex on-campus Student Information System makes close coordination (and patience) critical.  

We have worked with the vendor, rSmart, for several years and we hold this up both on our campus and with our sister institutions as a great model.  Our original goal was to save money, but my Academic Technology director insisted from day one on a real collaboration and so did the vendor.  rSmart meets with us on a regular basis scheduled around critical events on campus (like final exams); we have a complete mapping between our technical team and rSmarts, so that we have counterparts in both locations who are worrying together.   This was their idea and it has been a game changer for us: our QA person and their QA person work together, etc.  Sure, we are a complex customer, so there has been value for both rSmart and UC Davis to develop a model for success together, but we also believe that for some areas that are critical to your campus business  -- whether financials or teaching — you are not buying software as a service, you have to view it as buying a business partnership.

Sometimes our administration asks what is the difference between working with a company that has built the technology and one that provides a critical service of helping you manage a community-built technology.  I think the difference is quite dramatic.  Our partner vendor is as motivated as we are to ensure the right features are in Sakai, Kuali, and so on.  Their success depends also on the management and reporting tools working well, and on upgrades taking a rational, efficient course.  So, in addition to our own active participation (I just came off a Kuali Rice board call this morning), every dollar we spend with (in our case) rSmart is also an investment in helping the university (or more correctly, university-vendor) partnership succeed.  This is an obvious incentive towards alignment that is not possible in the case of some large database companies we all work with.

To summarize, it is important not to jump too quickly to an assumption that universities are always better partners with each other (sure, I believe we always want to be, but we lack some of the business rigor to always deliver on our goals in areas that are not our natural strength), but it does make sense to create consortia or partnerships we direct with diverse partners, as long as it includes an intellectual alignment such as the one I describe above.  Any university, community, or other partnership we develop should welcome and value corporate partners who really "get" what we do and can make money helping us achieve our goals.  We think we'll invest more and more in this kind of partnership in the future.

I look forward to more on this from others.  Hope this perspective is useful.

Pete Siegel
UC Davis

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Chris and John, 
This is a wonderful reflection on your company and very reflective of our conversations. 
Mike B.