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Software as a service and managed services have emerged in recent years as transformative business models for solution providers, but though sometimes confused, the models are distinct from each other.

That is, until now. At the intersection of SAAS and managed services stands Bluewolf, an IT consulting and services firm that this month added remote monitoring to a solution that customers use to integrate SAAS applications with other software.

New York-based Bluewolf, which has a strong focus on SAAS applications from vendors such as, Big Machines and eAutomate, describes its Integrator tool as “integration as a service.”

The solution, says Corinne Sklar, Bluewolf vice president of marketing, addresses what Bluewolf sees as the Achilles’ heel of SAAS because customers often don’t have the expertise to integrate SAAS applications with their existing software. A lot of the SAAS applications at customer sites were implemented by business people.

“The marketing or sales department would implement it themselves without IT,” Sklar says.

Through SAAS, customers get the benefit of a software application’s functions without having to deploy it on-site. Instead, the application is hosted remotely and made available to the customer through the Web. As with managed services, customers pay for SAAS as they would a utility bill through monthly or quarterly fees. And like managed services, the remote hosting takes the burden of maintaining and updating the technology away from the customer.

SAAS integration raises a lot of complex issues for customers, such as whether to use a SAAS vendor’s integration solution or implement your own infrastructure, or whether to employ traditional methods such as FTP or more modern approaches such as Web services, says Benoit Lheureux, an analyst at research firm Gartner.

“SAAS vendors tend to downplay the challenge of SAAS integration because it involves a lot of complex issues,” Lheureux says.