This document discusses Software as a Service (SaaS). It defines SaaS as software deployed as a hosted service and accessed over the Internet. Key advantages of SaaS include lower costs since users pay monthly subscription fees rather than large upfront licensing fees. The document outlines the history and growth of SaaS, describing how it has evolved from early ASP models. It also discusses the paradigm shifts required in application architecture and business models for SaaS, including moving to a multi-tenant architecture that is scalable and configurable. The speaker emphasizes that SaaS will have a major impact on the software industry and future IT professionals should closely track developments in SaaS.

1. SaaS : Software As A Service Suhas Kelkar VP Product Management Digité ( www.digite.com ) Keynote Speech For SCIT ( www.scit.edu ) Software Development Challenges & Issues Seminar January 19, 2008

2. Agenda What is SaaS? Why SaaS? History and current state of SaaS SaaS Architecture

3. SaaS Elevator Pitch "Software deployed as a hosted service and accessed over the Internet"

4. Business Services versus Consumer Oriented Services

5. What is SaaS? SaaS is a software delivery method that provides access to software and its functions remotely as a Web-based service. SaaS allows organizations to access business functionality at a cost typically less than paying for licensed applications since SaaS pricing is based on a monthly fee . Users don’t need to invest as much in hardware, server support, security audits and need fewer in house IT staff

6. SaaS Advantages Lower Costs. The user need not pay a single (usually large) licensing fee. He only needs to pay recurring subscription fees. Smaller Storage and Hardware Requirements. The user need not store software or data stored on his computer Fewer Personnel. SaaS reduces the need for specially trained IT personnel to handle maintenance, monitoring and software updates. Key Advantages for the End User Continuous and recurring stream of income Reduced losses from piracy and unlicensed use of software Greater valuation for the company! Key Advantages for the Vendor

7. Key characteristics of SaaS? Network based access and management of commercial software Central management of commercial software rather than at each customer’s site One to many application delivery model based on single instance, multi tenant architecture Centralized updating of software No more install hassles, downloadable patches and painful upgrades Upgrades are frequent and completely transparent. Gmail version keeps changing

8. Why SaaS? In 2005, Gartner estimated SaaS sales were 5% of total business software sales. In 2011, Gartner predicts that share will grow to 25% (As per Gartner, September 26, 2006) From IDC Directions Video : SaaS Tipping point in ’07 IBM will create online marketplace on Web Sphere SAP, Microsoft will accelerate SaaS strategies Salesforce.com will be acquired 2/3 rd of line of business managers favored SaaS delivery model

9. Why SaaS? Target the “long tail” Targeting the "long tail" of smaller businesses, by reducing the minimum cost at which software can be sold . On-Premise Software Market SaaS Opens up New Market

10. Why SaaS? SaaS Showcase Example daptiv formerly eProject $45 per user per month, claims to have 100,000 users. Adding 2000 users per month Grew 128% to $16M revenue in FY06 Positioning themselves as “SalesForce for the PPM market”, via eLounge (online customer collaboration environment) Gaining market share and winning many deals

11. Agenda What is SaaS? History and current state of SaaS SaaS Architecture

12. History of SaaS SaaS as a concept is not fundamentally new! What is new is the timing and success of SaaS!

13. ASP Versus SaaS It is important to understand the difference between ASP and SaaS. It is very common to confuse SaaS with ASP. ASP applications were traditional client-server applications with HTML façade ASP suffered with poor performance Shift in center of gravity : SaaS is about what customer wants, ASP was what the client would offer ASP concept did not scale!

14. SaaS and beyond SaaS is just the beginning Platform As A Service (FORCE.com) Hardware As A Service (HaaS) Infrastructure As A Service (IaaS) “ Blue Cloud” by IBM Simple Storage Service (Amazon S3) enables storage in the cloud, Elastic Computing Cloud (Amazon EC2) enables "compute" in the cloud. Google computing services

15. Agenda What is SaaS? History and current state of SaaS SaaS Architecture

16. Paradigm Shift Moving from on-premise software to SaaS requires paradigm shift in following three areas

17. Application Architecture : SaaS Maturity Model Level 1: Ad Hoc / Custom Level 2: Configurable Level 3: Configurable and Multi-tenant efficient Level 4: Scalable, Configurable, Multi-Tenant-Efficient

18. Application Architecture : SaaS Maturity Model Similar to ASP model Each customer has i ts own customized version of the hosted application, and runs its own instance of the application on the host's servers This level offers very few of the benefits of a fully mature SaaS solution LEVEL 1 : AD HOC / CUSTOM

19. Application Architecture : SaaS Maturity Model Vendor hosts a separate instance of the application for each tenant Same code, no need to maintain customized application code bases Easier to support/maintain since only single instance needs to be updated More expensive than Level 1 in terms of effort required LEVEL 2 : CONFIGURABLE

20. Application Architecture : SaaS Maturity Model Single instance that serves every customer, with configurable metadata Authorization and security policies ensure that each customer's data is kept separate from that of other customers Eliminates the need to provide server space for as many instances as the vendor has customers LEVEL 3 : CONFIGURABLE & MULTI TENANT EFFICIENT

21. Application Architecture : SaaS Maturity Model Vendor hosts multiple customers on a load-balanced farm of identical instances Scalable because servers can be added to meet demand without re-architecture Changes or fixes can be rolled out to thousands of tenants LEVEL 4 : SCALABLE, CONFIGURABLE & MULTI TENANT EFFICIENT

22. Business Model Shifting the "ownership" of the software from the customer to an provider. Reallocating responsibility for the technology infrastructure and management—that is, hardware and professional services—from the customer to the provider. Typical Budget For On-premise Software Budget Distribution For SaaS Software

23. Business Model Reducing the cost of providing software services, through specialization and economy of scale. SaaS Hardware costs get shared by all tenants resulting in economies of scale

24. Operational Structure SaaS providers not only have to be experts in building software and bringing it to market, they must also become experts in operating and managing it. Monitoring SaaS applications For availability For performance

25. Trust the Platform!

26. Does this look all complicated to you?  Help is literally just around the corner! :)

27. Summary SaaS is going to have a major impact on the software industry, because SaaS will change the way people build, sell, buy & use software As students of SCIT, you are the future of tomorrow’s IT industry. Hence you need to track SaaS very closely as it will have material impact on your future!

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29. Glossary and References http://msdn2.microsoft.com/en-us/library/aa479069.aspx http://blogs.msdn.com/gianpaolo/ http://www.microsoft.com/serviceproviders/saas/default.mspx http:// en.wikipedia.org/wiki/SaaS