Software as a service (SaaS) has gained tremendous popularity over the past few years. It offers a powerful solution for organizations looking to cut their software budget while simultaneously expanding their reach into new markets and supporting their own growth. SaaS provides the ideal business model for medium to large companies that are seeking ways to reduce the cost of software license costs while at the same time improving the quality of service provided through their applications. The following article will discuss the advantages of implementing software as a service in your organization.
Software as a service is basically a software subscription and delivery model where software is sold on a pay-per-use basis and is centrally located. It can be called “on-demand software” and previously was commonly known as “software plus services” from Microsoft. In the early days of software services business, these types of models were not cost-effective, but as advances have been made in hardware, networking and software development tools over the last few years the cost of implementing such a model has decreased dramatically. Consequently, the size of software services businesses has also expanded, making them a prime focus for many companies with finite budgets.
One of the main reasons that organizations are choosing to implement software services as a business model is the ability to rapidly scale the available capacity as needed without significant additional expenditure. Typically, all aspects of a software services operation are scalable, which means that as new applications and products are developed, more users can be added, and more servers can be added to support an ever increasing number of customers. This scenario is much more affordable than traditional software development methods, especially when compared to the expense of establishing and maintaining a substantial IT department and staff. In addition, the wide availability of Internet based services such as SaaS, makes it very easy to quickly evaluate the performance of various SaaS applications on a per-customer basis. In essence, this allows a customer to test a particular application in a lab environment prior to purchasing it, while other customers can be subjected to a more realistic scenario where they can use applications in production environments without fear of excessive costs being incurred.
By offering on-demand access to SaaS, customers can significantly reduce the cost of implementing software products. When these types of services are implemented, it is common for the upfront investment associated with development and implementation to be substantially reduced, which can lead to significant savings for companies. For example, by offering on-demand access, it is possible to get access to specific SaaS application development tools that can be licensed for a monthly fee. In turn, once the software development tools are purchased by customers, they do not need to invest additional capital into tools or servers that they will no longer need in a year or two years down the road.
Many organizations also choose to implement on-demand software applications as a method of consolidating hardware resources. Typically, on-demand software applications include database and software applications that are used to maintain enterprise-wide data. Through a variety of on-demand software solutions, it is often possible to quickly and easily bring various pieces of information together in order to form a comprehensive picture of all enterprise-wide data. For example, through a combination of SQL databases and web based user interface applications it is possible to quickly and easily integrate customer records with orders, products, and other relevant information. By combining these various pieces of data together on an on-demand basis, a business organization can rapidly identify trends that may arise in any given area and be able to respond accordingly.
As well as on-premise software delivery methods, many companies choose to utilize a variety of SaaS models in order to reduce their IT management overhead. Typically, a SaaS model includes three components – an infrastructure for hosted software applications, a collection of middleware and utility programs that run on the server and connect with the SaaS application, and a collection of websites that provide end-user access to the SaaS application. Most often, a SaaS model is implemented as an on-premise solution that integrates directly with an existing IT infrastructure. More commonly, a SaaS model is implemented as part of a cloud computing or a SaaS-based website.
Cloud computing provides businesses with on-demand access to a number of SaaS application via the Internet. In short, by renting or purchasing virtualization hardware and software, it is possible to eliminate the need to install and maintain expensive software on-site. The cloud model manages hardware, applications, security and maintenance all from a remote location. Businesses no longer have to worry about paying for software licenses, training and staff costs, or having IT professionals on site in order to get access to their applications.
For many companies, software services represent an effective way to reduce operational expenses and increase profitability. In addition to reducing overhead for IT departments, software services provide a means for companies to enter new markets, build IT capabilities and more effectively compete in today’s marketplace. As software companies continue to grow and offer more services at reduced prices, they will continue to attract new customers and diversify their portfolio of products and services. Furthermore, most software companies will continue to innovate as they look to improve the features and functionality of their products and services. As a result, software services are expected to continue to lead the way in technology adoption and diversification to stay ahead of the competition.