Concept
Software as a Service (SaaS) is a model of software
deployment where an application is hosted as a service and provided to
customers across the Internet. By eliminating the need to install and
run the application on the customer’s own computer, SaaS alleviates the
customer’s burden of software maintenance, ongoing operation, and
support. Conversely, customers relinquish control over software versions
or changing requirements. Moreover, costs to use the service become a
continuous expense, rather than a single expense at the time of
purchase. Using SaaS can also conceivably reduce that up-front expense
of software purchases, through less costly, on-demand pricing.
SaaS
lets software vendors control and limit their usage, prohibits copies
and distribution, and controls all derivative versions of their
software. This centralised control often allows the vendor to establish
an ongoing revenue stream. The SaaS software vendor may host the
application on its own web server, or this function may be handled by a
third-party application service provider (ASP). This way, end users
reduce their investment on server hardware too.
Trajectory
Start-up
versions of SaaS will be created, such as Amazon’s and Google’s
platforms.
SaaS versions of companies that own traditional software,
such as Sage’s Online 50.
Vertical solutions for small and
medium-sized companies will compete with traditional verticals
solutions.
SaaS solutions that do not cover in-house software.
Big
companies have been looking to raise in-house products to a higher
level by moving into the cloud, as Microsoft has done with Microsoft
Online Services, and companies such as Oracle and SAP have with their
respective SaaS solutions.
SaaS is a paradigm-changing model for
addressing business management. It is uniquely positioned to allow small
and medium-sized companies to access sophisticated, state-of-the-art
technology. It is a well-suited, growing business because it provides
the flexibility to support agile, rapidly changing companies, while
being scalable to accommodate rapid growth.
SaaS lowers cost of
business solution ownership and provides predictability of costs over
time. It provides more rapid time to production and value while avoiding
the technology lock-in of licensed applications.
SaaS provides
improved security, performance and availability with reliable access to
data anywhere, anytime via an Internet browser. Companies report that
the risk mitigation of reliable back-up and storage, coupled with audit
trails, improves their support for compliance and better governance.
Because
SaaS significantly reduces the cost of technology ownership, you can
invest your capital elsewhere, allowing you to run your business, not
your software.
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