What is Software as a Service?
Introduction, Trends and Perspectives in Software as a Service



   William M. Blake
   Pr...
What is SaaS?

SaaS = Software as a Service
• Deployment/Delivery model
    – Hosted and Managed by vendor
    – Delivered...
Definition of SaaS
• Software offered as a service to multiple customers with the
  following main characteristics:
• Stan...
Primary Drivers of SaaS

     Customers want a choice

     Changing economic & ecological conditions

     Changing co...
Benefits of SaaS - Customers

 • Lower entry point
     – No large up-front investment in
        • Software licenses
    ...
Benefits of SaaS - Vendors

 • Economies of Scale
     – Derived from Multi-tenant architecture
        • Better resource ...
What makes an application SaaS?

 • Network-based access to commercially available software
 • Multi-tenancy (one-to-many)...
SaaS vs. ASP

 • ASP: Application Service Provider
     – Single-tenant architecture (one customer per instance)
     – Mu...
SaaS Model




   SaaS is different from on-premise software in more ways than one.
Business Functionality of SaaS

 • Client/User Registration & Management
 • Provisioning
 • Billing & Payment Processing
 ...
SaaS Business Model Implications

 • New sales & marketing approach
     – Greater emphasis on web-centric cycle
 • New sa...
Shortcomings of Legacy on-premise Apps

  • Deployment Challenges
     – 31.1% of SW projects cancelled before completed
 ...
Changing Customer Expectations

    Old                                    New
    • Capital Investment                   ...
Equation for Greater Opportunities


     Economy             Tighter     =   Greater SaaS
                   +
    Uncert...
SaaS Adoption Today




                      Source: THINKstrategies/Cutter Consortium © 2007
SaaS Deployment Plans




                 Source: THINKstrategies/Cutter Consortium © 2007
Gartner’s Slope of Enlightenment


                                   Gartner’s Hype Cycle




                           ...
Living in a Hybrid World

  • Most enterprises will seek mix of on-premise and
    on-demand solutions
  • Users prefer ch...
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eDocument Sciences SaaS 101

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Review of Software as a Service and what it means to business

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eDocument Sciences SaaS 101

  1. 1. What is Software as a Service? Introduction, Trends and Perspectives in Software as a Service William M. Blake President, eDocument Sciences, LLC Phone: (716) 913-6676 e-mail: blake@edocumentsciences.com www.edocumentsciences.com
  2. 2. What is SaaS? SaaS = Software as a Service • Deployment/Delivery model – Hosted and Managed by vendor – Delivered across the Internet • Business model – Usage-based pricing vs. perpetual license model • Per user per month • Per transaction • Per GB of storage per month
  3. 3. Definition of SaaS • Software offered as a service to multiple customers with the following main characteristics: • Standardization of software – eventually customized for specific customers and markets • License based on usage – pay-as-you-go • Service includes maintenance, support and upgrades • Data storage at SaaS vendor • Web-based through Internet browser
  4. 4. Primary Drivers of SaaS  Customers want a choice  Changing economic & ecological conditions  Changing competitive forces  Changing workplace requirements  Changing technologies  Changing priorities & sourcing policies
  5. 5. Benefits of SaaS - Customers • Lower entry point – No large up-front investment in • Software licenses • IT infrastructure • Lower operating/maintenance costs – Fast, easy deployment (Web browser) – Vendor maintains/upgrades application – No IT staff necessary to keep running • Consumption-based expenditure – Pay As You Go (OpEx vs CapEx) – Scale up/down as needed
  6. 6. Benefits of SaaS - Vendors • Economies of Scale – Derived from Multi-tenant architecture • Better resource utilization • Simplified maintenance – Operating costs per customer drop as customer base grows • Better understanding of usage patterns – Drive innovation and enhancements • Faster release cycles keeps up with market/competition • De-facto access to Global market
  7. 7. What makes an application SaaS? • Network-based access to commercially available software • Multi-tenancy (one-to-many) • Payment Model • Central Application Management – Software – Infrastructure • Control of Upgrade Process
  8. 8. SaaS vs. ASP • ASP: Application Service Provider – Single-tenant architecture (one customer per instance) – Multiple instances running (as many as there are clients), typically hosted by third parties • Disadvantages – Significant management overhead – Difficult maintenance – No economies of scale
  9. 9. SaaS Model SaaS is different from on-premise software in more ways than one.
  10. 10. Business Functionality of SaaS • Client/User Registration & Management • Provisioning • Billing & Payment Processing • Performance Monitoring • Usage Metering & Tracking • Reporting • Customer Service & Self-Service
  11. 11. SaaS Business Model Implications • New sales & marketing approach – Greater emphasis on web-centric cycle • New sales & marketing compensation • New release cycles and maintenance model • New deployment/delivery approach • New/higher expectations on customer service • Uptime and SLA • Professional Services
  12. 12. Shortcomings of Legacy on-premise Apps • Deployment Challenges – 31.1% of SW projects cancelled before completed – 52.7% of projects cost nearly 190% of original estimates • Operational Costs – Maintenance & management costs >10x original license fee – Escalating hardware & staff support costs – Over provisioning and under-utilization of SW licenses • Economic/Budgetary Pressures – Need to reduce IT costs and increase business benefits – Need to increase utilization to gain greater ROI
  13. 13. Changing Customer Expectations Old New • Capital Investment  Operating Expense • Complex, Customize  Simple, Utilization • Reactive Maintenance  Proactive Management • Response Time  Ongoing Monitoring • Customer Support  Automated Delivery • Limited Responsibility  Higher Accountability • Outsourcing Alternatives  Out-Tasking Options Enterprises Seeking to Generate Greater ROI at Lower TCO.
  14. 14. Equation for Greater Opportunities Economy Tighter = Greater SaaS + Uncertainty Budgets Opportunities
  15. 15. SaaS Adoption Today Source: THINKstrategies/Cutter Consortium © 2007
  16. 16. SaaS Deployment Plans Source: THINKstrategies/Cutter Consortium © 2007
  17. 17. Gartner’s Slope of Enlightenment Gartner’s Hype Cycle You are here.
  18. 18. Living in a Hybrid World • Most enterprises will seek mix of on-premise and on-demand solutions • Users prefer choice • Users seeking on-demand/on-premise integration • ‘Applets’, Appliances, etc. will permit off-line use and synchronization

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