Software as a service

Software as a Service (SaaS) is a model of software delivery where a company adopts specific activities that provide customers access to software alleviating that customer from the maintenance and daily technical operation and support of business and/or consumer software. SaaS is a model of software delivery rather than a market segment; software can be delivered using this method to any market segment including home consumers, small business, medium and large business.

Key characteristics of software delivered by SaaS

The key characteristics of SaaS software, according to analyst IDC include:

• Network-based access to, and management of, commercially available (e.g., not custom) software
• Activities that are managed from central locations rather than at each customer's site, enabling customers to access applications remotely via the Web
• Application delivery that typically is closer to a one-to-many model (single instance, multi-tenant architecture) than to a one-to-one model, including architecture, pricing, partnering, and management characteristics

Types of SaaS Providers

There are two types of SaaS providers. The first has often been referred to as an Application service provider (ASP) where a customer purchases and brings to a hosting company a copy of software, or the hosting company offers widely available software for use by customers, such as hosting Microsoft Office and making that available across the web to customer who pay a fee per month for access to the software. The second type of SaaS provider offer what is often called software on-demand, where a company offers to customers software specifically built for one-to-many hosting. This means that one copy of the software is installed for use by many companies who access the software across the web.

In the first of these types of providers, a licensing fee and a monthly fee are quite separate being paid to the maker of the software and the hoster of the software as appropriate. The second type of hosting is where there is no division between licensing and hosting fees, and where there is little to no customization of software for each customer.

ASP versus SaaS

The reason for moving away from the term ASP or Application service provider is that this was the term used in the 1990s for a group of companies offering software across the Internet. These companies floundered at the time as markets were not sure of the security of business and personal data being transported across the Internet and second that the mindset of the time was that the web was too slow for running applications. There are still many in the IT industry who see SaaS simply as a re-branding of the term ASP, which they see as a discredited concept.

SaaS providers

• Apptix
• Ariba
• CDO2
• eMeta Corporation
• Journyx
• NetSuite
• RightNow Technologies
• PlatformON
• Salesforce.com

See also

• Vendor-independent solutions provider
• On-demand
• Application service provider
• Universal Enterprise Infrastructure