Five years ago, Web application development in North Carolina was a hit-or-miss operation. Some state programmers failed to meet testing standards, and some didn't test at all. North Carolina needed to overhaul its application-testing processes, preferably without spending too much cash to make it happen.

In 2004, the North Carolina Office of Information Technology Services (ITS) realized it had to change how state agencies performed software quality assurance (SQA) testing on their applications, found programming faults and created criteria for developers.

"Depending on which agency you walked into, you could see some good [software development life cycle] methods and techniques being used and the appropriate tooling and so forth available for doing quality assurance," said Gary Alexander, ITS director of service portfolio management. "Then you could walk into some other places and literally, it was nowhere to be found. And there were obviously flavors of it in the middle too."

He came to state government in 2003 and saw that the lay of the IT land was rather rough, so he wanted to do some landscaping. Specifically, he wanted to expand the number of services ITS delivered to agencies.

Fortunately the time was right to act: In 2004, the state passed SB 991, which mandated IT infrastructure consolidation. Alexander, along with ITS colleagues, created a concept for expanding and modifying the office's service delivery processes and garnered approval from CIO George Bakolia.

The office decided to save North Carolina money and headaches by consolidating SQA testing methods under ITS. The plan was to allow agencies to subscribe to quality assurance tools provided centrally by the ITS instead of purchasing tools themselves. This would unify and streamline application testing with less fuss.

"Every day we're using the service and testing applications for various state agencies that had been going untested and would have been launched with some very painful and obvious bugs or performance issues associated with them," Alexander said.

The office provides agencies the SQA tools for a fee through a Web-based delivery model known as software as a service (SaaS). It's a popular way for CIOs to subscribe to software and use it over the Web, and often it's a cheaper alternative to buying the software and hardware to run it. In North Carolina's case, the SQA software is owned by ITS, and state agencies rent it to test their own applications.

"You have a single incidence of software, hardware and network infrastructure that is supporting and servicing multiple clients or tenants, so it's the one-to-many type of scheme," Alexander said.

SaaS Usage Grows Significantly

The SaaS delivery model has been quickly spreading globally, according to prominent business research. Gartner, an IT research and advisory firm, reported in March 2007 that the worldwide SaaS market reached $6.3 billion in 2006 and forecast that it would grow to $19.3 billion by the end of 2011. In January, IT research company IDC estimated that 76 percent of American organizations would use at least one SaaS-delivered application by the end of 2009.

Arguably the main reason these organizations try SaaS is the upfront cost savings on implementation. For starters, the software runs on servers owned by the SaaS vendor. In most cases, the host also mobilizes its own IT personnel to handle problems or system upgrades, which means IT departments don't have to worry about maintenance issues. Customers pay for usage, not ownership.

"The other benefit by consolidating all the licenses and offering the tools under one agency is that we can control all the patching, upgrades and support in that nature," said Paul Schmidt, service owner of Software Quality Assurance Services at ITS. "If we had it spread on