SaaS (Software as a Service) - A brief introduction
Software as a Service (SaaS) is also known as Software on Demand is the new concept to deliver the software products and its usages to the customer. Traditionally, the software products were delivered to the customer in CDs and the customer used to install them in his desktop or server. There were many disadvantages with this system for both the customer as well as software vendor.
Drawbacks to the Customer
The main drawback in the old system is that the customer needs to pay the full price for the product even if he uses only certain functionalities of that software. Secondly, he needs to constantly update the products whenever a patch or new version is released. This imposes additional financial burden as well as technical issues such as backward compatibility. The other drawback is once he purchased software from a particular vendor, he is struck with the same vendor. Even if the product does not meet his expectations, he does not have any alteration. He is fully dependent on the same vendor for all supports.
Drawbacks to the Vendor
The vendor also has lot of problems with the old system. Whenever a patch or new version is released, he needs to provide support for various platforms. This ultimately increases his production and distribution cost. Since differential pricing is not possible in this model, vendor charges the same price for every user irrespective his usage level. Due to this user who uses very little features also ends paying more. Another problem is as most of the users are technically navies the vendor needs to provide support at customer places for installation and breakdowns, which increase his operational cost.
SaaS and its advantages
SaaS model enables the vendors to release the product as a service. The vendor has complete control over the product as it is hosted by him at his server and used by the customers through their computers remotely. User can use the software as a service, either by paying a periodical subscription or by paying as per usage. A Vendor provides various service standards such as Gold, Silver, Bronze, etc according to the requirements and capacity of the customer. User can also select the features which he needs and pay only for the features he uses.
The vendor has complete control over the product; he installs upgrades and sets the features at customer desktop through remote controlled procedures. This reduces the distribution cost and also saves a tremendous amount of time. Another advantage is as the customer uses the software on real time he can immediately log the errors, bugs and drawback instantly and this helps the company fix them quickly. Although SaaS appears to be similar with its predecessor ASP, both are not the same. ASP model provided the organization to move their application to a third party server, where as SaaS provides shared applications which can be accessed by different users from their desktops. The ever increasing demand for SasS among the users is due to its simplicity and the cost effectiveness drives more and more vendors in to this domain with better products. This heralds a paradigm shift in the software delivery and changes the game completely.
