The markets for both application portfolio management (APM) and Software as a Service (SaaS) have been soaring. IT enterprises have been realizing the need for APM to improve the channelizing of the investments on IT operations and maintenance, and have productive applications on board. At the same time, SaaS has the potential to make APM more valuable for IT enterprises. IT enterprises can harness the powerful analytics features of SaaS applications and combine that with the APM tools. Multidimensional data and analytics are the backbone of APM and that becomes possible only when SaaS is combined with APM. The whole APM framework can also be hosted in the cloud, which significantly reduces the cost of the IT enterprise. So, APM and SaaS make for a good combination. (For more on SaaS, see 11 Essential Steps for Implementing SaaS.)

What Is Application Portfolio Management?

APM is a framework for managing enterprise IT software applications and services. Among its several features, APM can provide reports to IT managers on the overall health of all enterprise IT software applications and services. For example, it can quantify the current state, performance, age, returns on investment (RoI) and economic value of the applications. Based on the reports, the IT managers can make important decisions such as eliminating redundant or unproductive applications or buying new software. Obviously, APM plays an important role in both identifying application health and productivity and making the best use of the IT budget.

What Constitutes an Application in the APM Context?

Not just any application is within the scope of APM. The scope of APM across organizations is roughly the same. Still, given below are a few examples of what can constitute an application:

  • Web services
  • A service-oriented business application (SOBA) that provides a user interface for performing one or more business tasks such as creating invoices
  • A system that comprises a rich client, a server-based middle tier and a database. If changes are done on any one component, the other components are also impacted.
  • An Excel sheet that contains multiple macros that perform business tasks
  • A website publishing system that pulls data from one or more databases and publishes the data in an HTML format on a public URL

Business Case for APM

The State Of Global Enterprise IT Budgets: 2009 To 2010 states that “For IT operating budgets, enterprises spend two-thirds or more on ongoing operations and maintenance." That is a significant expense and there is scope of channelizing the budget to more productive avenues. A lot of organizations maintain applications that perform the same functions for various reasons. All such applications need to be maintained and upgraded, which are expensive tasks. APM can identify duplicate applications for the IT managers so that they can be eliminated. APM can also quantify the performance and the business value of the applications.

Approach to APM

The standard objectives of APM should include but will not be limited to reducing expenses on operation and maintenance, quantifying the health and performance of the applications, improving compliance and identifying redundant or duplicate applications. So, the standard approach is given below:

  • Measure the current business value of the applications portfolio.
  • Recommend the optimum mix of software applications, web services, websites and databases.
  • Provide a practical road map for the implementation of the optimum application mix.
  • Implement a governance process for prioritizing investments, align applications with business needs and manage change programs.

How Can SaaS and Analytics Influence APM?

The rise of SaaS and analytics offers an opportunity to take a fresh look at how APM is done. IT enterprises have an opportunity to cut costs, redeploy resources to more productive assignments, have high-quality analytics based on which resources — such as applications, servers and databases — could be eliminated or updated. In a nutshell, IT enterprises are freed up to focus on higher-priority areas. Given below are some of the ways SaaS could influence APM:

The IT enterprise has gotten rid of the responsibilities to procure, install and maintain hardware, recover data after disasters and maintain applications. When a relationship with SaaS is established, APM becomes easier. The IT enterprise now can use as many APM tools as required, depending on the SaaS platform. The IT enterprise can consider APM tools provided by SaaS vendors.

The full APM framework can be hosted in the cloud provided by the SaaS vendors. APM frameworks are flexible in the sense that the IT department can add, update or remove applications whenever needed. However, these APM activities need to be supported by the infrastructure that hosts APM and SaaS represents the ideal infrastructure. SaaS, which is hosted in the cloud, can be scaled up or down as per needs. So, the IT enterprise does not need to invest a lot on the infrastructure for hosting the APM. (To learn more on applications in the cloud, see 8 Best Practices for Managing Cloud Applications.)

The powerful analytics capabilities of the various SaaS offerings can add a new dimension to the APM. From the perspective of an IT manager, it is crucial to have data in a clear, user-friendly format. Powerful analytic capabilities can quantify and expose different dimensions of application performance such as age and performance correlation, compliance graphs, duplicate functions performed by different applications, returns on investment, economic value and perceived business value.

Large enterprises have large teams located across the globe. Naturally, the IT infrastructure can be either centrally located or distributed across locations. In such a situation, it is a challenge to ensure that all users around the world have access to the same APM version and can collaborate easily. SaaS ensures that the same software versions are used by all users irrespective of their locations, and greater coordination is achieved.


The main contributions of SaaS to the APM market are superior analytic capabilities and freeing up the resources of the IT enterprises for more productive purposes. However, the availability of SaaS for APM does not mean that the above two objectives are fulfilled automatically. The IT enterprise still has to locate a suitable SaaS vendor which can take care of a lot of activities such as server installation, versioning, deployment, backup, recovery and other tasks. If these tasks are not done properly, then the IT enterprise will not be able to focus on its other tasks. The IT enterprise also needs to combine the analytical abilities of SaaS applications with APM so that its application health can be evaluated.