Software as a Service (SaaS) is also commonly known as “Software on Demand.” In a basic sense these terms refer to software delivered to end users, over the internet, on a pay-per-use basis.
According to Wikipedia, “SaaS is generally associated with business software and is typically thought of as a low-cost way for businesses to obtain the same benefits of commercially licensed, internally operated software without the associated complexity and high initial cost.”
Some key characteristics of a SaaS product are:
- Available via the web
- Product support, maintenance, enhancement and deployment are managed centrally by the Vendor
- Deployment leverages multi-tenant architecture to achieve significant economies of scale
- Deployment model is one-to-many in terms of feature-sets
- Pricing is kept as simple as possible, with vendors typically packaging infrastructure, support, maintenance, licensing, bandwidth and ongoing feature upgrades into one pay-per-use fee
- Is often designed using Service Orientated Architecture (SOA) enabling mashups and integrations with other “as-a-service” stacks (Platform as a Service (PaaS) and Data as a Service) often through a well defined Application Program Interface (API).
- First-line end user support is often not provided at all, or provided through online community forums, wikis and help documentation. Interfaces are thus developed to be extremely intuitive and self-supporting
- Many SaaS products can be ordered, immediately deployed and paid for online
- Usually a time-restricted free-trials are offered to allow potential buyers to sample the software
- Due to the Vendor requirement to “package” these products and make them “self-supporting,” the offering is forced to be well thought out and simple from an end user’s perspective.
In the early 2000’s, the buzz word for this type of concept was “ASP” (Application Service Provider) and the concept gained some popularity, especially in the United States. Microsoft Exchange Server is one example of a fairly early ASP model that enjoyed a measure of success.
The problem however was that the technology was not quite ready yet. Many early ASP Vendors experimented with models of deployment delivering stand-alone software via Virtual Private Networks (VPN). This proved to be slow and frustrating to end users in many cases. Also, the early ASP models didn’t deliver well on their cost-saving promises as bandwidth and infrastructure costs soared (especially in countries like my country of residence, South Africa, where telecoms monopolization/regulation kept bandwidth costs extremely high).
What Changed?:
Technology caught up with vision, bandwidth improved internationally (in South Africa, as with other countries, bandwidth provision was deregulated and costs have come down substantially) and the international tech community invented a new buzz word to signal a new start, SaaS!
Internationally, we saw a number of great proprietary SaaS software product successes, most notably, SalesForce.
So where are we now?:
Going back as far as 2003, at White Wall Web we have had a slogan (and a banner) that says “Ultimately, all software will be web-based.” Not too long ago, that was seen as a somewhat fringe comment and an unlikely eventuality. It may still seem quite a way off, but it is certainly more conceivable today.
Personally, I am very bullish about SaaS as a deployment model. I envisage a future where, at very least, the bulk of software is deployed on this model, accessible 24/7 to end users via web and mobile interfaces.
What is SaaS? It is model for software deployment with the most benefits for both the vendor and purchaser of software.
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Next Week Teaser:
Next week I will continue with the “Starting Out” series and unpack the question “Why SaaS?” I will answer the question,, “What are the key benefits?”and provide some real world examples to demonstrate these benefits in practice.
Full Book Chapter Plan:
The full list is available on the Upcoming Topics page.
Glossary of Terms:
Please comment if I have used any term that you are unfamiliar with or feel should be added to the Glossary page.
October 27th, 2008 at 2:48 pm
Received the following email from a friend which made me do some research:
“Thanks for this. I am impressed with your idea and yet again inspired by your vision.
If you haven’t checked out this link already it might be worth doing so.
http://www.gartner.com/it/products/research/media_products/book/hypecycle_video.jsp
Where would Saas fit in in the hype cycle? Based on what you have said, it would seem to me that it would be somewhere on the slope of enlightenment. I can see your work here provoking a movement along the cycle.”
I thought about this a bit and had a look at the Google Trends image: http://www.google.com/trends?q=Software+as+a+Service
It seems that the initial hype (http://www.google.com/trends?q=Software+as+a+Service&ctab=0&geo=all&date=2006) is over and interest in this topic is still growing steadily…
August 4th, 2009 at 11:07 am
Hi Peter
I also share your enthusiasm on the subject but it extends beyond just SaaS to include all the other services being offered via the cloud. I really see cloud computing as the realisation of Utility Computing as envisaged by John McCarthy in 1960.
Sure some people argue SaaS is the same as the ASPs from back then but I tend to differ. I believe one of the more important characteristics which SaaS so popular today lies in its elastic on-demand nature. SaaS, the other XaaS services, really allow dynamic scaling based on business demand. Not only can you quickly scale up to meet seasonal demand, say a billing run once a month, but you can also scale down and only pay for what you use.
Ooh, I am so excited about this space as I have always preached, agreeing with Nic Carr, that IT is really a commodity and cloud computing is really the industrialisation of IT.
Sure there are many challenges requiring ironing out, but like you I too am bullish.
Andre (@the_dre)
August 6th, 2009 at 3:56 pm
Thanks Andre - appreciate your comments and shared sentiments. The future is bright for SaaS for sure.