Uncovering SaaS: A new software revolution

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Uncovering SaaS: A new software revolution

  1. 1. Software as a Service (Saas) is defined as "Software deployed as a hosted service and accessed over the Internet" by Microsoft. Software has traditionally been delivered in boxes with a license and often with a maintenance contract. The Web removes all these formalities, enabling SaaS to become an innovative way of interacting and doing business. SaaS is based on a very simple premise – rather than buying a software license for an application such as Accounting or Human Resources and installing this software on individual machines, a business or an individual signs up to use the application hosted by another company. The consumer therefore simply uses the software by paying a subscription fee, rather than owning a copy of the software. Two successful examples of SaaS are salesforce.com, a SaaS-based Customer Relationship Management (CRM) service and webex.com, an online video conferencing service. SaaS is sometimes also referred as multi-tenant software. This is because the same application instance is designed to handle multiple clients or tenants without any encroachment on each other's data. Each tenant gets the impression that the software is running just for him. Some of the salient features of SaaS are described below: More economical – Since, SaaS is provided over the Internet, many instances of an application can run at once in a common environment. The providers therefore
  2. 2. share one application cost-effectively across hundreds of companies. Moreover, the providers are also able to offer the software to the consumer at a much lower cost in the form of subscriptions. No lock-in for the customers – SaaS offers the customers the flexibility of choosing an alternate vendor if they are not completely satisfied with the first. Sometimes, the SaaS providers can allow the customers to test software by offering them free trial subscriptions. In the traditional scenario, a trial was usually was not possible and the customers were forced to continue using software if they purchased it. Paradigm-shift in software business – SaaS has a higher cost for delivery than their traditional counterparts because of the costs associated with hosting, bringing customers on board, and managing the application and data center environments. This is however offset by lower customer support costs as SaaS comes with self-help options and do not incur any product distribution costs, such as CD creation, packaging, and manuals. Frequent version updates – A software vendor releases a major version once every couple of years, and the company and its partners go to great lengths to make sure that the new version works with older operating systems and applications. A SaaS vendor on the other hand does not have any such worries. As a result, version upgrades tend to occur more often and in smaller chunks. The smaller but more frequent upgrades in this model allow providers to ensure continuous and gradual development of the service. SOA AND SAAS SaaS is often confused with the Service Oriented Architecture (SOA). SOA is an architectural approach and SaaS is a delivery model. In other words, SaaS refers to delivering of a single piece of software to many users, and SOA is about building software that's flexible and reusable. There is a definite trend towards synergizing these two ideologies. If that happens then, you end up with a SaaS solution that uses SOA technologies to more rapidly adjust to changing market conditions and customer needs. CHALLENGE TO SAAS ADOPTION – SECURITY One of the biggest factors blocking the wide-spread adoption of SaaS is security. Data is the most important asset of any business and data is also at the heart of SaaS. SaaS applications provide customers with centralized, network-based access to data with less overhead than is possible when using a locally-installed application. But in order to take advantage of the benefits of SaaS, an organization must surrender a level of control over its own data, trusting the SaaS vendor to keep it safe. To earn this trust, one of the highest priorities of a SaaS vendor is creating a data architecture that is both robust and secure enough to satisfy customers who are concerned about surrendering control of vital business data to a third party, but at the same time is efficient and cost-effective to administer and maintain. REVENUE MODELS SUPPORTED BY SAAS One of the foremost questions that comes in a Business Development Manager's mind when being introduced to this concept is how is the company going to make money with SaaS. Given the fact that the application is available on the Internet, the three revenue models that can be incorporated are: Subscription-based: Each tenant can be provided access to the system on the basis of periodic subscription. Transaction-based: While the registration is free under this model, the tenant pays only for certain kinds of transactions. Ad-based: Both the registration and use is free, the SaaS provider makes money from the advertisements that appear on the panels of the UI. SAAS SAMPLE – LITWAREHR LitwareHR is a reference implementation of SaaS, developed and supported by Microsoft's Architecture Strategy Team. LitwareHR is a human resourcing application, designed to handle recruitment processes of a company and is accessible as a service. The key objective of LitwareHR is to show how to be multi tenant efficient as well as allowing tenant specific customization in a single instance environment. Some of the features that LitwareHR supports are listed below: Provisioning: LitwareHR can be provisioned from multiple sites – from a tenant's premises of choice to a hosting service provider's data centre. The tenants can make use of this application over both public and private network. UI Configuration: Each tenant can upload their logo and configure the look and feel of the application based on their corporate colors. The solution also supports design templates. Workflow Configuration: A modern organization tends to follow its own workflow when it comes to performing its corporate functions. LitwareHR creators have kept this in mind and allow its tenants to configure the workflow. Multi-tenant Data Design: A SaaS application can be implemented using one of the following models – separate database, separate schema, and shared schema. In the first case, separate database can be created for each tenant. In the second case, separate schema or separate sets of tables are created for each tenant. In the third case, the data of all the tenants are stored in the same sets of tables. A database designer can select the scheme depending upon the availability of space on the database server and the kind of traffic that he expects on the SaaS application. Roles and Access: LitwareHR supports creation of multiple roles, with multiple access rights. Depending on the roles to which a user is assigned, he or she is
  3. 3. granted one or more permissions to perform specific operations or actions. Therefore, the application supports creation of roles like Chief Executive, who can view and change more data than a junior-level executive, such as an Accountant. Security: Due to the fact that LitwareHR is provisioned over a public network, the design team has paid a lot of emphasis on creating a robust security sub-system. LitwareHR supports following three kinds of security patterns: Filtering: Refers to the use of an intermediary layer between a tenant and a data source, which acts like a sieve and makes it appear to the tenant that its data is the only data in the database. Permissions: Refers to the use of access control lists (ACLs), which determines who can access data in the application and what they can do with it. Encryption: Refers to the cloaking of every tenant's critical data so that it remains inaccessible to unauthorized parties even if they come into possession of it Moreover, when a tenant begins using LitwareHR application, a secure database connection is made using Windows Integrated Authentication or HTTPS connection. Requests from each tenant is handled using Kerberos protocol. Source: Microsoft Corporation The above diagram illustrates the physical architecture of the LitwareHR application. The tenants are allowed authenticated access (using username and password) of the LitwareHR application on the private network. They are allowed to post jobs. Members of the general public or the end users access the application over the public network that is, Internet. The end users are allowed to apply for jobs without authenticating themselves. In other words, no registration is required. The diagram also shows two tenants – Contoso and Fabrikam. Both the tenants have configured LitwareHR to suit their own requirements. CONCLUSION SaaS has already started a sea of change in the software development and delivery arena. The early signs indicate that the service market looks promising and is gaining momentum that is hard to stem. For the companies focused on entering the SaaS market, the main challenge surrounds customer adoption and acceptance. 9873194661 REFERENCES 01) Carraro, G., Chong, F., Architecture Strategies for Catching the Long Tail, http://msdn.microsoft.com/en-us/library/aa479069.aspx (Accessed on: 30th January, 2009) 2) Chong F., Carraro G., Wolter R., Multi-Tenant Data Architecture http://msdn.microsoft.com/en-us/library/aa479086.aspx (Accessed on: 30th January, 2009) 3) Dubey A., Wagle, D., Delivering software as a service http://www.mckinseyquarterly.com/Delivering_software_as_a_service_2006
  4. 4. (Accessed on: 30th January, 2009) 4) Seeley, R., Delivering software as a service, http://searchsoa.techtarget.com/news/article/0,289142,sid26_gci1252502,00.html (Accessed on: 30th January, 2009) 5) Microsoft SaaS Architecture Workshop Proceedings, http://www.codeplex.com/LitwareHR/Wiki/View.aspx?title=SaaS%20Architecture%20Workshop%20070402&referringTitle=Home (Accessed on: 30th January, 2009) For more information, visit www.rightwaysolution.com, or write to info@rightwaysolution.com. Corporate Head Office Rightway Solution (India) Pvt. Ltd. A/301, 3rd Floor, Smita Tower Opp. Vishramnagar Garden Nr. Subhas Chowk Gurukul Road, Ahmedabad - 380052 Gujarat, INDIA Telephone: +91 79 27493698 / 27439921 Fax: +91 79 40037106

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