"The combination of ever-more-abundant bandwidth, increasingly powerful processors, and inexpensive storage is broadening the choices for designing, deploying, and using software: in devices, in computers, on servers in corporate data centers, and on the Internet...." Read Microsoft's introduction to SaaS
"The Oracle Platform for SaaS provides ISVs a single, integrated platform for both on-premise and cloud-based deployments, allowing ISVs to offer their customers a choice in where to run their software...." Oracle's SaaS offering for ISVs
"SaaS is becoming an increasingly prevalent delivery model as underlying technologies that support Web services and service-oriented architecture mature and new developmental approaches, such as Ajax, become popular...." Techtarget's SaaS definition
"Back in the desktop software era, magazines ran software reviews in which the side-by-side comparisons of features took up an entire page..... Typically, the software with the most features won..... With software as a service, the focus has become whether the tool is good enough on day one and how well it will adapt over time...." Seven questions to evaluate SaaS
"McAfee is positioned to take advantage of the fastest growing segment of the security industry. 'The SaaS security market is growing a little over 30 percent per year, three or four times faster than the on premises security software market'....." McAfee releases security products related to SaaS
"All the SaaS news and breakthroughs ....  covered by ebizQ's Phil Wainewright, a leading authority  on emerging trends in business automation....." Read ebizQ's SaaS news updates
"The phenomenon of software as a service (SaaS) has changed the way organisations access their applications, as more and more users deploy hosted software delivered direct to a web browser....." Computer Weekly covers the advances in SaaS
"Salesforce.com is a powerful tool for business processes that have little to do with "customers," like fundraising, recruiting, and public relations...." Articles on business usage of SaaS from ITworld

Software As A Service

Definition: Software as a Service (SaaS) is a type of cloud computing offering where users access internet-hosted software applications using a browser rather than a traditional client or client-server based application.


Software as a service

SaaS and Cloud Computing

SaaS is the most easily understood variant of cloud computing with applications such as webmail and Google Docs perhaps the best known examples. In fact most of the so-called Web 2.0 networking applications such as Facebook, YouTube and MySpace could be categorised technically as SaaS applications.

As an example, compare the difference between using webmail and client-based email applications such as Microsoft Outlook, Lotus Notes or Eudora. With a PC-based client the users preferences and settings are all tied to their PC, and emails are usually copied down to it as well. Emails are stored somewhere that most users can't find and moving them from one PC to another requires a significant degree of IT knowledge.

With a webmail client all you need is a PC and an internet connection to link to your webmail provider and all email, past and present, all contact details and settings are available straight away. There's no link to any one PC so anything that can be done from the user's usual PC can be done from a colleagues PC or from an Internet café.

SaaS in a Business Environment

These well known consumer applications are not often referred to as SaaS applications though. The term tends to be used more in the commercial software space where there is a different relationship between the user and the SaaS provider. This is usually characterised by payment being made to use the service and the payment model being of the 'pay-as-you-go' (PAYG) type.

The major financial difference SaaS offers an enterprise compared to a traditional internally hosted application is the ability to pay for application software on an 'as-needed' basis. An enterprise-quality software application would traditionally be offered in batches of licenses such as 1-10, 10-50 etc. This means that enterprises have to pay up front for software, often before they have the people to really justify it.

Pay as You Go

SaaS - Software as a ServiceWith the PAYG model and the software and data hosted on servers in the cloud, an enterprise can simply pay an application provider an amount per user per month, or perhaps the number of minutes used per month, depending on the type of application and the precise model that the SaaS provider is operating. There are far less IT management overheads as when operating servers to host a company's own copy of an application, all that is required are PCs with a browser and an Internet connection.

An enterprise SaaS also offers all the benefits of consumer web-based application in that all the data is centrally hosted so that it can be accessed from anywhere. Another secondary benefit is that the PCs in an enterprise do not have to be particularly powerful as all the high-powered computation is done on the application provider's servers.

Startups and SMEs Profit Most

This is all of particular benefit to startups and growing SMEs as it all means lower costs, immediate access to a fully-fledged application and fewer resources wasted on maintaining a computing environment. Companies in these situations do however need to be aware that they will be tied into that application provider. They should monitor costs as they grow to ensure that they don't pass a breakpoint where a traditional model is more cost effective.

A good example of commercial SaaS is Salesforce.com's web-based customer relationship management (CRM) system. Installing an organisation-wide CRM system using a traditional local hosting model can be a real headache, with a lot of up front expense to install and maintain hardware, operating systems and the application itself, which then has to be tailored to the organisation. To use a web-based CRM all that employees need to do is register and login to the central system and import any existing customer data. Salesforce.com's application is available in four levels from basic to unlimited at a range of prices per user per month.

This all sounds like it's too good to be true, surely there are disadvantages to SaaS? Many companies are concerned about not being able to control their own IT infrastructure and platform. The risk to the organisation of having a third party company in charge of their data, with concerns about privacy and data piracy, is considered too great for many companies to embrace cloud computing in general and SaaS in particular.

Operational Concerns

There are operational concerns too. For a company to lose it's Internet connection is currently a great inconvenience. For an organisation using an SaaS model, losing their Internet connection becomes a complete disaster so steps would need to be taken to provide backup connections. This all increases telecommunications costs.

With the advent of mobile internet connections it becomes harder to imagine a business person being somewhere where there is no Internet connectivity but it does happen. Once employees get used to working in an 'always-on' environment they find it harder to be productive when they are suddenly disconnected.

Strategic Issues

Strategically, the SaaS model presents some problems in addition to the tie-in to a supplier mentioned above. Suppose an SaaS provider begins to get overloaded and is slow to put more resources online; that would result in slower performance for their customers. Smaller customers are likely to feel the pinch as larger customers are prioritised and his might also happen with customer support resources.

Although it might not be a stated policy of an SaaS provider to downgrade support for smaller customers it is easy to understand that customer service personnel might inadvertently or even subconsciously put more effort into responding to larger customers.

Organisations are often reluctant to allow control of significant processes to pass outside their own walls, sometimes with good reason.