Software as a Service (SaaS)

Software as a service (SaaS) is a software distribution model in which a third-party provider hosts applications and makes them available to customers over the Internet. SaaS is one of three main categories of cloud computing, alongside infrastructure as a service (IaaS) and platform as a service (PaaS). 
  

Introduction

Software as a Service is a software distribution model in which application are hosted by a vendor or by a service provider and the vendor made it available to the client over a network. We can say that it is a software delivery method that can provides access to the software and its functions remotely as a web-based service, Software as Service allows the customers or organizations to access it business functionality at a cost usually that is lower than paying for licensed application. Software as service pricing is usually based on monthly fee, as well as, the software is hosted by a remotely, customer don't need to buy additional hardware. Software as Service also enables the organization to remove the need to handle the installation, set-up and often daily upkeep and maintenance. Software as Service is becoming an increasingly prevalent delivery model as underlying technologies that support webhosting and service oriented architecture mature and new development approaches like Ajax become popular.
SaaS is closely related to ASP and on Demand Computing software delivery models. in the software on demand model, the provider gives client or organization network based access to a single copy of an application created specifically for the software as service distribution.

CONCEPT

The concept of SaaS took hold at a time when information technology executives were fed up with the ballooning costs of packaged enterprise software. Company had to spend thousands of dollars just to buy one software license, as well as they also had to spend more dollars for the implement the software, that include the consulting fees, and the training costs, and some extra infrastructure that was required to run the software and maintenance fees. As a result, SaaS emerged from the wreckage of botched multimillion0-dollar CRM & CRP implementation as a radical alternative to the software licensing models. Software as a service is a speedier cheaper implementation and easier.
Enterprise Software Applications delivered as SaaS include business applications such as customer relationship management (CRM), web conferencing and collaboration applications, HR applications like talent management and payroll, enterprise resource management applications like ERP, supply chain management (SCM), product lifecycle management (PLM) and so on.

The key characteristics of SaaS are:

• Software as Services is only rented for the purpose of use they are not owner.
• This software's are installed at a central server rather than on the client machines. The customer can access to the application through the internet. The vendor is responsible for the proper maintenance and performance of the software.
• The vendor provides the facilities such as maintenance, support & upgrades to the software from the server. The provider is also responsible for the up gradation of the software.

Situation

Analysis of the demand for the Software as a Service, here we are going to discuss whether sufficient demand for the specific product is prevailing in the market, and what are the advantages and disadvantages for using it.


SaaS removes the need for organizations to install and run applications on their own computers or in their own data centers. This eliminates the expense of hardware acquisition, provisioning and maintenance, as well as software licensing, installation and support. Other benefits of the SaaS model include:
Flexible payments: Rather than purchasing software to install, or additional hardware to support it, customers subscribe to a SaaS offering. Generally, they pay for this service on a monthly basis using a pay-as-you-go model. Transitioning costs to a recurring operating expense allows many businesses to exercise better and more predictable budgeting. Users can also terminate SaaS offerings at any time to stop those recurring costs.
Scalable usage: Cloud services like SaaS offer high scalability, which gives customers the option to access more, or fewer, services or features on-demand.

Automatic updates: Rather than purchasing new software, customers can rely on a SaaS provider to automatically perform updates and patch management. This further reduces the burden on in-house IT staff.
Accessibility and persistence: Since SaaS applications are delivered over the Internet, users can access them from any Internet-enabled device and location.
But SaaS also poses some potential disadvantages. Businesses must rely on outside vendors to provide the software, keep that software up and running, track and report accurate billing and facilitate a secure environment for the business' data. Providers that experience service disruptions, impose unwanted changes to service offerings, experience a security breach or any other issue can have a profound effect on the customers' ability to use those SaaS offerings. As a result, users should understand their SaaS provider's service-level agreement, and make sure it is enforced.
SaaS is closely related to the ASP (application service provider) and on demand computing software delivery models. The hosted application management model of SaaS is similar to ASP: the provider hosts the customer’s software and delivers it to approved end users over the internet.  In the software on demand SaaS model, the provider gives customers network-based access to a single copy of an application that the provider created specifically for SaaS distribution. The application’s source code is the same for all customers and when new features are functionalities are rolled out, they are rolled out to all customers. Depending upon the service level agreement (SLA), the customer’s data for each model may be stored locally, in the cloud or both locally and in the cloud.
   
      

Conclusion

Software as a service is a very different model than the traditional software license and maintenance and client server model. Software as service will be the way through most applications will be delivered in near future. We can say that technology innovations are the primary driver for SaaS adoption. it is an attractive delivery model for high volume and commoditized business processes in back-office banking, as well as SaaS does not have to be all or nothing value proposition, we can operate it in a hybrid model. Developments of Saas vary by region. while Europe, the Middle East and Africa respondents cited total cost of ownership as the main motivator, North America and Asia/Pacific participants focused on ease and speed of development. Although SaaS does not provide any guarantee to be less expensive than on-premises software and it also had some risks. In some organizations it is very difficult to relinquish control or trust third parties to manage their applications and data
A series of macro-trends is fundamentally changing the way businesses must operate. Globalization is changing the competitive landscape, and mobility is changing the way workers do their jobs. An explosion of consumer-oriented, on-demand services, led by Amazon.com and Apple's iTunes has taught people how easy it can be to access and share information or the goods and services they want.
These experiences, combined with the escalating competitive climate and challenges of managing an increasingly dispersed workforce, are forcing businesses of all sizes to re-think how they acquire and utilize software applications. Unwilling to continue to tolerate the operating inefficiencies and ongoing costs of traditional on-premise software products, a growing number of businesses are now adopting on-demand solutions to meet their business needs.
This has opened the door to an exciting new era of opportunity for organizations to leverage and build their own on-demand applications and a Pandora's Box of challenges for organizations trying to develop and deliver SaaS solutions in a cost effective fashion. In addition to designing a unique on-demand solution, they must build and deliver it in a scalable and secure fashion. For ISVs, this must be done without the benefit of the upfront revenues of a traditional, perpetual license model. Instead, the pay-as-you-go subscription pricing approach inherent in SaaS places significant financial constraints on aspiring SaaS vendors. Yet, they must still get to market quickly and scale their operations in order to keep pace with escalating competition and customer demands in the SaaS market.