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Software as a Service

Monte Pollard - Friday, February 19, 2010

Software as a Service (Saas)

 

What is SaaS - "Software as a Service"?

 

This BLOG is designed to assist consumers to better understand;

 

    • What SaaS actually is and how it relates to a Website Solution

A couple of excellent detailed explanations about the development of the SaaS concept can be found on;

 

    • Wikipedia - some comments here are taken from that website.
    • Computerworld dated May 2009, gives a good background from an Australian perspective.

Briefly

 

With the development of hosting companies around the world providing specialised hosting facilities, mostly in North America and the UK, there became a redundancy or oversupply of hosting space that was not being utilised. Hosting companies responded by creating their own software that clients could use for the cost of hosting and software development. This had the effect of substantially reducing the initial cost of quality software for SME businesses.

 

“The concept of "software as a service" started to circulate before 1999. In December 2000, the term was beginning to gain acceptance in the marketplace. SiteEasy was sold on a subscription-basis for a monthly fee to its first customer in the Fall of 1998. Further development of the software since then has made it easier for the business manager to manage their own solution rather than have to revert to their web developer every time a modification was required”.

 

It should be noted that this is true for the northern hemisphere as, in our opinion and generally speaking, Australia has been slow to take on the concept, especially in the SME market.

 

The philosophy is that, sharing software provides a low cost structure for businesses to obtain the rights to use software as needed, versus licensing all devices with all applications. On-demand licensing enables the benefits of commercially licensed use, without the associated complexity and potential high initial cost of equipping every device with applications that are only used when needed.

 

It can be said that the principle applies to all software but in the latest developments there are some important differences.

 

How This Relates to a Website Solution - The Old versus the New

 

The old way was to pay a license for a one off software solution when you required it. Ongoing support was chargeable and you did NOT get any ongoing software updates often without having to pay for a completely new total package to get the latest version. If you required another module at any time (for example an ecommerce shop) a payment was required to have the software added to your solution. An ecommerce solution was often another software developer’s package that attracted another license fee that was added to your original solution. Often it was (and still can be) more economical to discard the old version and replace it with the new. Usually, maintenance had to be done by your web developer.

 

Generally, hosting was provided by another provider, usually on an annual basis or you set up your own servers.

 

The new way is to pay a low monthly fee and have the software updated and upgraded for the life of the solution. Good SaaS providers add new modules to the software from time to time at no additional cost and you just utilise them as and when you wish or require them.

 

An example of this could be getting online with your website and at some time in the future you add an ecommerce shop. The software is already there for your use. Some providers adjust the monthly fee for additional modules and some don’t. The only other cost would be to have someone activate a module for you, or if you are proficient, you just activate and set it up yourself.

 

This is true for many modules that providers make available.

 

One of the drivers from the Wikipedia website says and I quote;

 

“SaaS has the effect of democratizing software, allowing small and medium businesses to have access to functionality formerly the domain of large enterprises. Many analytical software tools have been released as SaaS applications and are available on a monthly subscription basis”

 

Benefits

 

So, what are the benefits?

 

    • Lower initial cost - depending on what customising you want
    • Reasonable monthly fees
    • Monthly commitment
    • No long term contracts
    • The future of the Internet

Look for a good Internet Consultant and Web Developer who will;

 

    • Provide ongoing support for the life of the solution
    • Train you in the management of your solution, if that’s what you want
    • Train you how to make your solution able to be found on the Internet (SEO for Google AND the user)
    • Train you with the marketing of your solution (Internet marketing is different and requires some specialised knowledge and skills)

I trust this helps and should you care to comment, please do.

 

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