SAAS Software as a service

Software as a Service (SaaS) is a software distribution model in

which applications are hosted by a vendor or service provider and
made available to customers over a network, typically the Internet.


SaaS is becoming an increasingly prevalent delivery model as
underlying technologies that support Web services and service-
oriented architecture (SOA) mature and new developmental
approaches, such as Ajax, become popular. Meanwhile, broadband
service has become increasingly available to support user access
from more areas around the world.


SaaS is closely related to the ASP (application service provider) and
on demand computing software delivery models.

The hosted application management (hosted AM) model is similar to
ASP: a provider hosts commercially available software for customers
and delivers it over the Web.

In the software on demand model, the provider gives customers
network-based access to a single copy of an application created
specifically for SaaS distribution.



Benefits of the SaaS model include:
easier administration
automatic updates and patch management
compatibility: All users will have the same version of software.
easier collaboration, for the same reason
global accessibility

The traditional model of software distribution, in which software is
purchased for and installed on personal computers, is sometimes
referred to as software as a product




Software is important in todays business world, where software
applications can help us track shipments across multiple countries,
manage large inventories, train employees, and even help us form
good working relationships with customers.
For decades, companies have run software on their own internal
infrastructures or computer networks.
In recent years, traditional software license purchases have begun to
seem antiquated, as many vendors and customers have migrated to
a software as a service business model.
Software as a service, or 'SaaS', is a software application delivery
model by which an enterprise vendor develops a web-based software
application, and then hosts and operates that application over the
Internet for use by its customers.
Customers do not need to buy software licenses or additional
infrastructure equipment, and typically only pay monthly fees (also
referred to as annuity payments) for using the software.
It is important to note that SaaS typically encapsulates enterprise as
opposed to consumer-oriented web-hosted software, which is
generally known as web 2.0.
According to a leading research firm, the SaaS market reached $6.3B
in 2006; still a small fraction of the over $300B licensed software
industry.
However, growth in SaaS since 2000 has averaged 26% CAGR,
while licensed software growth has remained relatively flat.
Demand for SaaS is being driven by real business needs namely
its ability to drive down IT-related costs, decrease deployment times,
and foster innovation.

As SaaS adoption continues to accelerate, traditional software
application vendors or ISVs could face fierce competition from SaaS
upstarts looking to steal market share.

Over time, they could see their existing customers defect, and
prospective new customers balk at their product delivery options (or
lack thereof) resulting in lower revenues, operating margins, and
profits.
Alternatively, ISV's could adopt SaaS models -- hence risking the
cannibalization of their own software license revenue.
Consequently, the disruption of ISVs offerings would hurt the
demand for technology software service/consulting firms, who earn
profits by integrating, customizing, maintaining, and upgrading
traditional licensed software.
On the other hand, pure play SaaS software companies, third - party
application hosts, and Internet technology providers all stand to gain
with accelerated SaaS adoption.



SaaS is faster and a cost effective way to getting implemented. There
are no hardware, implementation or acquisition costs involved to run
the application from the customer's side. It's the responsibility of the
SaaS vendor to manage and run the application with utmost security,
performance and reliability

Since customers pay a subscription, they have immediate access to
the new features and functionality. Unlike traditional softwares where
upgrades would happen once a year or once in 6 months (with the
vendor coming to your office with a CD), the SaaS vendor
continuously pushes new updates, fixes to the application, which is
immediately accessible by the customer. This reduces the length of
time it takes a customer to recognize value from the software.

Since the software application is delivered as a service, its important
for the vendor to focus on customer service and experience. Since
this is on a subscription model, the vendor is judged on a month-
month basis and the pressure to innovate or risk losing business is
greater.

SaaS can be used by Windows, Linux, or Mac users, providing true
platform independence over the Internet.



Cloud Computing vs SaaS. Is there a difference?
The Cloud delivers computing as a utility,
SaaS delivers an application (such as CRM) as a utility
A SaaS application can be delivered in a range of models from the
vendors own datacenter, to a third-party, hosting vendor, to a true
cloud computing environment which takes advantage of the latest
technologies such as virtualization to maximize resource utilization.
However it is provisioned, SaaS (application delivery model) is quite
distinct from Cloud (compute delivery model).
Cloud has simply become a very handy, very trendy way of
describing all things that occur outside the firewall as it were. If its
not happening on premise, its happening in the cloud whether
youre talking apps or compute.
There is however one HUGELY important distinction. J ust because
an app is hosted in the cloud does NOT necessarily make it SaaS.
Why is this important? As a consumer, if the application is not truly
multi-tenant, youre not getting the great benefits of SaaS, you are
getting an ASP delivery model. Someone is simply running your copy
of their application somewhere in a datacenter. Even if its
virtualized. Thats not multi-tenant. Thats not SaaS.

There is a reason why SaaS eclipsed ASP for application delivery. It
is hands down a superior delivery model from cost to technology to
scalability. Multi-tenancy is what makes all the benefits of SaaS
possible: rapid time to deployment/value, faster innovation cycles,
infinite scalability etc. And it has a dramatically reduced cost
structure because it leverages one platform. Vendors who deliver
their application via SaaS have a competitive advantage over those
who do not.