What is SaaS?

As time and technology progresses, delivering solutions to the market have evolved from sending floppy discs to downloading software. So the question arises: is SaaS just another way of delivering software to the user? The answer is: No.

Software as a Service (SaaS) is not about the software but about the solution it brings. In short, SaaS is a model of delivering a (software) solution to the customer where the supplier takes care of maintenance, daily technical operation and support for the solution provided.

In the past, another concept of delivering solutions to the customers in a managed manor was branded ASP. It is fair to compare the two but there are fundamental differences.

SaaS is usually delivered on a pay-as-you-go concept. This means the client uses the solution and is charged based on that usage. It is not very common to tie customers into long term contracts, contrary to typical ASP, where the supplier was forced to have long contracts to make sure every cost has been covered.

But the main difference is not in the payment concept. It is in the providing organization and its solution. SaaS solutions have been designed for internet use and have also been designed to be very scalable in accordance with user demand. The supporting organization is shaped to support high fluctuations in customer demand. Their entire support and service is built around the variation in client numbers. The software is designed to allow users to help themselves as much as possible and provide FAQ’s and newsgroups.

SaaS offers many advantages including a lower risk of piracy, lower installation costs, controllable implementation and maintenance costs and an always up-to-date solution.

But SaaS also comes with risks. These vary from uptime and availability to the stability of the supplying organization. Other elements to be aware of are security and integration issues.

Is SaaS the way of the future?

Yes, for many reasons SaaS will be the way of the future. Companies have been slow to adapt to the concept of SaaS but more and more the risks are being overshadowed by the advantages. In current day-to-day business, the focus is more and more on cost effective and agile solutions.

And this is what good SaaS solutions, together with SOA and Web 2.0 can deliver.