These web-based email services are a good example of what SaaS basically is.
Each web-based email service provider hosts all of their programs, information and data that are linked to the services they are providing (in this case web-based email access), in a remote centralized location.
End-users can then remotely access these web-based email services and data which relates to them, via the World Wide Web using any normal web browser.
To summarize things, there are a few basic points that are common to all SaaS implementation.
Software applications or services are stored remotely.
A user can then access these services or software applications from anywhere in the world, via the Internet.
In most cases, a user does not have to install anything onto their host machine, all they require is a web browser to access these services (although in some cases, a web browsers may require an additional plug-in or add-on for certain services).
These simple set of points are common for all SaaS implementations, whether they are for business and enterprise use or even just for individual use.
A customer buys a software product and once purchased, that software product then becomes the property of the buyer.
The customer now has full ownership of that software solution and can effectively use the software in any way they wish, as long as they do not break any of the terms and conditions (i.e. copyright terms) or licensing terms for that software.
In most cases, once a software solution has been purchased, the vendor for that software solution will still provide software support in the form of upgrades and patches.
In a SaaS solution, ownership of software applications and services remain in the vendor’s hands because the software is not downloaded onto a user’s computer in any way.
Instead it is accessed by a user remotely through the Internet using their web browser.
This means that software vendors now have full control of their software solutions and do not have worry about consumers breaching their copyright terms or licensing terms.
The main advantages of SaaS for software clients (1/2)
Briefly mentioned below are a few of the main advantages for of SaaS for software users.
Lower costs – If a user only needed to use a software application for one month, it would be a waste of money for them to completely purchase this software application (especially for expensive software applications such as video editing, graphics, etc.).
By using SaaS software solutions, consumers can save a lot of money. All they have to do is pay a subscription fee for one month or for the duration of time that they will be using an application for. This is a very cost-effective solution for users who may only use a particular software application on rare occasions.
The main advantages of SaaS for software clients (2/2)
Reduced storage requirements – Some applications can take up a lot of hard drive space.
By using SaaS software solutions, consumers can save a lot of hard drive space and in the long run this can save them money. Also, users do not have to worry about constantly backing up software data as this is all handled by the SaaS vendors.
There are many more benefits to using SaaS software solutions for clients and only a few of the main ones were mentioned above.
The main advantages of SaaS for software vendors (1/2)
Continuous income and greater profits – SaaS allows software vendors to profit like never before. Traditionally a client would purchase a software application, along with the number of licenses that they required and then that was it.
A software vendor received very little from their clients after this initial purchase. However, SaaS now allows software vendors to receive a continuous stream of income in the form of subscriptions. In the long run, this means that software vendors are able to profit far more than they could before.
The main advantages of SaaS for software vendors (2/2)
A reduction in piracy and unlicensed software – By keeping ownership of software applications in their own hands, software vendors can benefit from a reduction in piracy and unlicensed copies of their software being distributed.
Again, this increases their profits because the amount of money that they are losing through piracy can be greatly reduced.
There are many more benefits to using SaaS software solutions for vendors and only a few of the main ones were mentioned above.
Finally, software vendors were just not interested in changing their pricing models.
At the time, most software vendors were happy with receiving immediate up-front payment for their software applications and tended t overlook the benefits that a subscription-based model would have for them.
The major software companies like Microsoft, Oracle, etc., also just ignored SaaS and did not take it seriously.
This meant that SaaS could not only be implemented cheaply but it could now also work efficiently, without any lag or time delays that dial-up Internet connections would have caused.
Also, more and more people were now connecting to the Internet and where there might not have been a market for SaaS before (because most people worked offline); there was one now (because people started to spend more time connected to the Internet online).
Also, consumers were much happier using a subscription-based model because they would not have to pay large amounts of money upfront and had the ability to only pay for the services that they required.
A subscription model in most cases also ensured that consumers would not be locked in by any licensing terms or a software vendor’s terms and conditions.
For example, some software vendors would not offer refunds once a software application had been purchased.
This meant that if a client purchased a software application and it was not as it was advertised making it useless to the client, then that client would have effectively lost their money.
However, using a subscription-based model, a client has the ability to pay a fraction of a software application’s full price, without being locked in to their subscription in any way.
This means that if a software application ends up being useless for a client, then they can cancel their subscription with a minimal loss of funds.
SaaS is a relatively new technology when compared to other technologies, but it is now starting to be widely adopted by both businesses and home users.
Advances in Internet speeds and bandwidth availability have made it both a very feasible software solution and a cheap software solution and it is now backed by major software and Internet companies such as Microsoft and Google.
To create flexible payment models for software services
Using SaaS, there are many different ways that a client can pay for software.
For example they could pay a monthly fee, they could be charged based on the features that they use or on how much they used a particular software service, i.e. using a pay-as-you-go model.
The good thing about this flexibility in pricing models is that the needs of many different users can be accommodated for.
For example, larger companies could pay bigger upfront fees to save them money in the long run, while individual users could use a pay-as-you-go payment model to save them money in the short term and avoid paying large upfront fees.
Those were some of the main goals and objectives for SaaS when it was initially implemented.
The main aim for SaaS however, was to take the management strains of software maintenance and deployment away from consumers, while at the same time putting control of software services back into the hands of software vendors.
SaaS, involves making an application an entirely hosted one, which resides remotely outside of an organization's internal infrastructure.
Although Software plus Service has a similar concept to SaaS, it is not quite the same.
Software plus Service is something of a middle ground technology, where it provides the complete functionality of traditional software applications but also the benefits of external hosted software applications.
This is achieved by installing an application in a traditional way, where they reside on a machine locally but by also complementing them with remote services, similar to the way in which a SaaS applications services are delivered.
More feature rich applications can be provided
SaaS is great because it means that businesses do not have to install any application data onto their machines; however, there are a few setbacks to this (mainly because SaaS is still in its infancy).
One of these setbacks is that certain features are currently just too difficult to implement across the Internet or run within web browsers efficiently.
By installing certain features locally and then complementing these features with web-based features as well, a business can receive the best of both worlds.
This is a good compromise for businesses who do not want to fully change their software application model to a SaaS-based one or for businesses who want to wait until SaaS catches up to the point where software services can be delivered with the same efficiency as if they resided locally.
With a SaaS-based software delivery model, users must be connected to the Internet whenever they want to use their software application services.
Obviously this means that if a user is offline, then they are unable to access their software applications, which also means that it is very unlikely that they are able to get any work done (unless of course they have local backup applications but this would defeat the purpose of using SaaS-based applications in the first place).
Software plus Service on the other hand, allows users to work offline (because important application data is stored locally).
Once these users connect online, their data can then automatically be synchronized with their software service provider's servers.
This is very advantageous to users who work remotely or users who are constantly on the move, because they can complete all of their work offline.
They can then connect to the Internet when it is convenient for them and synchronize their data online, so that they can receive the same collaboration benefits that SaaS provides but of course without having to be constantly connected to the Internet.
One concern that most businesses have when switching over to a SaaS-based software delivery model, is how secure their data is.
This is because when using a SaaS-based software delivery model, all of a business's data resides externally and it is up to the SaaS service providers to secure this data.
By using the Software plus Service software delivery model, businesses have the option of controlling what data will reside locally and what data will reside externally.
This means that a business could choose to keep private sensitive data stored internally, while less sensitive data could be stored on their software service provider's servers, to improve the efficiency of their software services.
Traditional software applications are more difficult to customize for a business than SaaS software applications are.
Although SaaS software services offer businesses more flexibility and the ability to customize their software experience (by picking and choosing the services that they want), SaaS does not quite offer the same level of customizability as Software plus Service does.
Software plus Service allows businesses to customize their in house software, while also receiving the services that they require from a third party service provider, giving them a much more unique software experience that is specifically geared towards their business.
It is clear that Software plus Service offers some advantages that SaaS cannot currently offer.
Software plus Service offers the benefits of being able to collaborate with a wide range of users via the Internet, while also taking advantage of more powerful PCs by running core application code locally.
It is a great compromise between the traditional in house software approach and the Software as a Service approach.
Software plus Service is great for businesses that want to receive similar benefits to having a SaaS software delivery model and for businesses that do not want to completely change their software delivery model to an outsourced external one.
The ASP software delivery model first started being widely implemented during the early 90s.
It was the ASP software delivery model that created the whole idea of hosting third party client/server software applications within an ASP organizations data centers, and then delivering these software applications to their clients via the Internet.
The problem with the ASP software delivery model was that each client's applications or set of applications would require their own mini-data centre within an ASPs premises.
This meant that ASPs would require massive data centers if they were going to host software applications for many clients.
Because so many different customer specific applications were being run within an ASPs data centre, ASPs just could not provide any help or documentation for each one of their clients' software applications.
This meant that the clients of an ASP would still require their own in-house software experts and would still need to implement their own set of troubleshooting procedures, both of which were very costly.
This is one of the major reasons why many businesses decided not to use an ASP to outsource their applications and instead decided to keep their software applications in-house.
Businesses would have to pay software professionals regardless of whether they stored their software applications in-house or not, therefore instead of paying the additional cost of out-sourcing their software applications, most businesses decided to stick with their traditional software storage approach, by storing them within their own data centers.
Because SaaS providers are dealing with less software applications and services, they can also provide their clients with more application-specific documentation and can maintain and manage software applications themselves, preventing their clients from having to do all this, which of course saves them money.
The SaaS software delivery model also provides clients with cheaper upfront costs when compared to the ASP software delivery model.
This is because when a client uses an ASP, they still have to pay the full cost for the software applications that they are going to be using, because the ASP is only hosting a single copy of these software applications for them and no other clients.
Although SaaS has effectively taken over from ASP as the dominant software delivery service, ASPs still exist today.
However, the modern ASPs differ from the ASPs of the past, which failed.
These days, ASPs either concentrate on a narrow range of software services instead of many different types of software services; ASPs offer their own set of specific software services, similar to the way in which SaaS vendors deliver their own set of software services.
Most modern ASPs will function in a very similar way to SaaS service providers.
This is mainly because the SaaS software delivery model has been proven to be a successful one and can provide benefits to both service providers and a service provider’s clients.
Using SaaS service providers to deliver software services, in most cases, is the best choice for businesses.
SaaS software applications have a quick deployment time (no need to install the applications) and are much cheaper than ASP software services (due to economies of scale).
However, in some cases, using an ASP may be the only choice that a business has.
For example, if a business wanted to outsource a particular software application or set of software applications but these applications were not currently offered by any SaaS service providers, then they would have to use an ASP to outsource these software applications for them.
SaaS allows businesses to save money in a number of different ways.
Firstly there are lower IT related costs when using SaaS software solutions in place of traditional software solutions.
When a business purchases software applications in the traditional way, as well as the initial costs of purchasing this software (and licenses), there are a whole host of other costs.
For example a business may have to purchase additional hardware to run this software on their machines, they have to secure the machines on which these software services run on and IT professionals are required to manage or troubleshoot this new software.
Multi-tenancy or using multiple-tenant software services is another way in which businesses can save money.
Multi-tenant software is any software application that can be used by more than one user or multiple users.
Due to the fact that multiple users can share the same software application/service, subscription levels can be offered by SaaS vendors at much lower rates than if a software application was being used by users in a 1:1 ratio.
The good thing about paying for SaaS software services is that they offer flexible payment methods, meaning that businesses can choose the payment method that offers them the most benefits or the method that can save them the most money.
Also, traditionally when software applications had to be used on a number of different machines, they would usually have to be installed on to each one of these machines (which is a time consuming process).
However, by using SaaS a business can access the same software services on multiple machines without having to install anything.
This can save businesses a lot of time, resources and even money.
The above-mentioned procedures often have hidden costs and consequences that are not easily spotted by businesses.
For example, it can be so easy to overlook or forget about the extra costs that maintaining software services, installing software patches and troubleshooting entail.
By using SaaS, all of the above problems and procedures are virtually eliminated.
This means that businesses can use their budget far more effectively on business-related processes, and a business’s workforce can concentrate fully on core business processes, rather than on software-related tasks and activities.
SaaS: Giving businesses access to the very latest software versions
SaaS changes this, because software vendors can immediately offer their updated software solutions to clients online in a cost-effective and efficient way.
This means that clients can benefit from software innovations on an ongoing basis, because as soon as a software vendor makes changes or offers new and improved features, their clients can begin using them right away.
Sometimes, when a business installs software traditionally they face problems; for example, the latest version of a particular software application may not work as intended with their existing operating environment or with their existing infrastructure.
This means that a business would have to completely upgrade their existing infrastructure or operating environment, to allow the latest version of a particular software application to function correctly.
This is obviously very expensive and although there are other ways around this, SaaS is a great method to avoid having the problem mentioned above.
By using SaaS, a business does not need to change their existing operating environment or infrastructure in any way.
All incompatibility issues are dealt with on the software vendor’s side of things and they are the ones who will ensure that the software services they are providing run stably within their data centers.
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