Software as a Service - The fundamentals
Ever since online software like Google Docs and Zoho have been introduced the threat to Microsoft and other 
developers of office suite software has increased. In fact the IT world has coined an new phrase for the online software which is "Software as a Service". According to Wikipedia "Software as a service (SaaS) is a software application delivery model where a software vendor develops a web-native software application and hosts and operates (either independently or through a third-party) the application for use by its customers over the Internet. Customers do not pay for owning the software itself but rather for using it"
SaaS was initially thought of as a low cost alternative for a business to gain access to commercially licensed software. However, that is not the case anymore and this amply clear from the launch and success of Windows live page and Office Live Free Website. Some of the areas where SaaS has been effective is Customer relationship management, Video Conferencing, Human Resources, Accounting and Email. SaaS is different than ASP (Application Service Provider) as in SaaS the focus is on what the customer wants and not what the application developer can deliver.The success of Salesforce.com, which started in 1999, and has 390,000 subscribers has proven that SaaS can be a successful model. In fact nearly all the major IT companies have staked claim to the space as observed by Rick McGee, vice president of SaaS strategy for IBM Global Services.
There are many reasons why SaaS model is a popular one. One of them is the cost and work associated with deploying a SaaS model software. The cost of migration to a new version of a Software is a big cost for corporates and usually results in delay of work. This is not the case in SaaS. In case of SaaS model the burden of software deployment, maintenance, and availability is that of the service provider which makes it easy for the company deploying it.
There is criticism of SaaS model and there are some rightful concerns. The biggest one being data security. A post at Rocket Matter does deal with these questions. In the end you have to careful as to who is offering the service and how secure is your data with them before subscribing to any given software.
Software as a Service model has caught my fancy for sure. It seems SaaS is practical as it has a strong revenue model. In days to come I will be writing more on SaaS. If you have any thoughts please share it with me.
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