Software as a Service – What is it?

Wikipedia defines SaaS as follows:
Software as a service (SaaS, typically pronounced ’sass’) is a model of software deployment where an application is hosted as a service 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 time of purchase. Using SaaS also can conceivably reduce the up-front expense of software purchases, through less costly, on-demand pricing. From the software vendor’s standpoint, SaaS has the attraction of providing stronger protection of its intellectual property and establishing 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 may reduce their investment on server hardware too.

IBM says:
The Software as a Service (SaaS) business model is impacting the software industry and how your customers acquire business functionality and solutions. In this model, application functionality is delivered through a subscription model over the Internet. The customer does not take ownership of the software, but instead rents a total solution that is delivered remotely.

With the SaaS model, you can reduce up-front support costs because you no longer need to support multiple platforms and versions. This rapidly emerging delivery model can help you, as an ISV, enter new markets.

What is Software as a Service? – a definition from Whatis.com (hosted AM, SaaS on demand, hosted application management)
DEFINITION – 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. IDC identifies two slightly different delivery models for SaaS. 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. IDC predicts that SaaS will make up 30 percent of the software market by 2007 and will be worth $10.7 billion by 2009.

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.

Microsoft defines Software on tap as:
The combination of ever-more-abundant bandwidth, increasingly powerful processors, and inexpensive storage is broadening the choices for designing, deploying, and using software: in devices, in computers, on servers in corporate data centers, and on the Internet. Business solutions can be delivered and consumed in all of these ways—either singly or in combination—to provide the best user experience and the most business value.

Software as a Service (SaaS)—meaning delivering software over the Internet—is increasingly popular for its ability to simplify deployment and reduce customer acquisition costs; it also allows developers to support many customers with a single version of a product. SaaS is also often associated with a “pay as you go” subscription licensing model

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