Software as a Service (SaaS)

SaaS or Software as a Service is a new technique in the field of software technology. It enables you to hire any software application only when there is a requirement of such a utility. In other words, it is an on-demand software service provided by the vendors to it consumers. The licensing for using this application may be solely with a single user or it can be shared with multiple users (as per the product ordered). The user license terminates as soon as the purpose of this application software is over, thereby eliminating unnecessary expenditure in the future.

Aims

The SaaS methodology is now becoming popular because of its high services and less maintenance. The availability on demand makes it highly flexible when the maintenance of the tool is taken into account. Now, the user need not be troubled with the maintenance blues, when the application is not in use. Moreover, the on-demand service also saves the complex hardware requirements, once the use of the software is over. The SaaS enables a centralized control of the business by the service provider. In other words, the network of action is distributed amongst many users from a single server. Thus, there is lot of sharing i.e. sharing in the license.

Sharing of license within an organization makes you cut down the expenditure on EULAs (End user License agreement). Although SaaS permits sharing of license, the individual security is not hampered. In addition, there are no copies and distribution, which further extinguishes threats on security of individual system. Hence, SaaS is the perfect service to meet the demands of any software consumer. The SaaS also omits re-installing of the software within an organization because of the central control.

History

It was only in 1999, that the idea of ‘software as a service’ evolved. It was then that Bennett et al came up with the term as the “beginning for gaining acceptance in marketplace” during December, 2000. Although the phrase ‘software as a service’ soon came in to common use, the “SaaS” (TitleCase acronym) was not widely accepted until 2000-2001 in the white paper, which was known as the ‘Strategic Backgrounder: Software as a Service”. In February 2001, this paper got published by eBusiness division of SIIA (Software & Information Industry), even though the content was actually written during the 2000 fall (as per the to internal records of the Association).

Philosophy

Thus, SaaS is a technique in demand of the software users. Its on-demand licensing has undone the cost of providing every machine with the service that is used only when needed. So, it is economic when we have high investments vested in the installation, maintenance, modifications and understanding of single application software. Almost every software application now abides by the SaaS strategy. There are several UNIX based applications, which are running successfully with this new technique except the EULAs applications. These applications never provided such facilities before. For example, if you have an application running on your machine, then all the data’s will be lost as soon as your machine is switched off. And the next time you log in from a different machine, you need to purchase a new license all over again. That means remote accessing of data is not possible. It is only possible when you have the server machine on and then you take the license operable from the distant situated server computer in your machine and make the necessary proceedings. So, every time you access data, you need the remote machine to be switched on for licensing of data’s. However, SaaS has wiped out all the above blues. With centralized control and on-demand licensing, it provides easy management of the application. Remote processing through CPU controls is very well facilitated and distance is not a factor of concern. You now do not need the remote machine to be switched on while handling with data’s. And all the Thanks go to SaaS!

The motive behind designing SaaS applications is to make the software applications easy in use and more web-oriented. The architecture of the SaaS model is so designed that it enables many users to access the same application through a single license. With simple design, it also reduces complex procedure needed to stand the application in use. The above features are some characteristics that separate this technique from other applications like ASP (Application Service Provider). Thus, SaaS is your complete software application with minimum expenses in the up-keep and use.

Characteristics

Software as a Service (SaaS) also known as software in demand implies differently to different people. The important characteristics of SaaS are:

Ø It enables both network and web based access to commercial available software computing services, the work or processing related to is done not at the location of customer, rather it is done on a third-party server.

Ø The application delivery is multi tenant based including partnering, architecture, pricing, and management features.

Ø The end users do not have to download the upgrades and patches for the software, as it has the feature of centralized updating.

Ø The SaaS software is mainly required in a bigger system of communicating software. It is used either as the part of the mash up or as a plug-in to the platform (as the service). Traditional software models are quite simpler than the Service oriented architecture.

SaaS application price is totally based on the user. It is small for a less count of users, which may rise, if the user demands for the extra storage and bandwidth. SaaS revenue stream is lower as compared to the conventional application license fees at the initial stage, but it may change at the later stage. Some of the additional features of SaaS are:

Ø User demand for more feature, as they do not have to pay anything for new feature.

Ø New features are being released at a rapid rate as all the users are benefited for the new functionality.

Ø It practices are the best and well recognized.

Implementation

SaaS architecture is classified as being a part of 1 of the 4 “maturity levels,” as per the Microsoft. The key attributes of the application are configurability, scalability and multi-tenant efficiency. The four levels are distinguished from each other by this attributes. As each level has one of the three attributes: Let us have a look at the four levels in details below:

Level 1 – The Ad-Hoc/Custom: In this level, each and every customer is equipped with its own modified version of a hosted application. Each of them is solely responsible to run their own instances of an application on the servers of the host. This being the primary maturity level, the effort required by the SaaS to transfer the non-networked in this level for the development is minimal and the operating cost is even reduced. The reduction is primarily due to consolidation of server hardware & administration.

Level 2 – Configurable: When it comes to the 2nd maturity level, the flexibility with which you can do program is quite greater. As in this level, you are provided with the metadata (i.e. data within the data) which is configurable by the user and this enables many customers to use separate cases of similar application codes. Thus, various needs of the customers can easily be meeting by the vendor and they can even provide the customer with the detailed configuration options. Maintenance and updation of the common code bases are made easy and simple for the users.

Level 3 – Configurable & Multi-Tenant-Efficient: In this level, another attributes i.e. multi-tenancy is taken care of, but it lacks scalability. Adding of this attribute makes way for the single program instance for serves each customer. This enables the serves resources to be used to maximum.

Level 4 – Scalable, Configurable, and Multi-Tenant-Efficient: This is the final maturity level has the benefits of all the key attributes. Scalability, which was missing in the third level, is added up through the multi-tier architecture. Thus, it provides a complete balance farm of the identical application cases, which are running on the variable count of servers. The capacity of the system can be varied according to the demand by simply either by adding or taking away servers. No changes have to be made in application software architecture.

Virtualization is one more key attribute, which may be used in SaaS architectures instead of multi-tenant attribute or along with it. The advantage of adding up virtualization over multi-tenant application in the architecture is that the system’s capacity can be increased with no further programming. If both are there, then it would provide greater flexibility for tuning the system for best performance.

SaaS application development is not an easy task. It involves various components and frameworks. Marketing time and the converting cost of a conventional on-premise product and deploying the new SaaS solutions get reduced due to these tools.

SaaS and SOA

Everyone tries and take the advantage of one another. So, same is for SaaS software likes so many other software it also takes advantage of the SOA (Service Oriented Architecture). This will facilitate software applications for communicating with one another.

Each software service also has the opportunity to work as Service provider, thereby revealing its functionality for other applications by the means of public brokers. The software service has also the chance to act as the Service requester, and by acting as the Service requester, it can incorporate data along with functionality from another service.

Drivers

Anything to be successful some source or drivers are always behind it. SaaS has become successful in recent years and this is all because of the people work. This acceptance has become possible.

Computer is all around: The information, which the workers want, gets through computer. So, the learning curve has gone down for the new application and therefore, you require less holding of hands by the IT firm.

Computer as the commodity: During the earlier period, corporate mainframes were safeguarded as strategic advantages. Nowadays, people have become aware, as it is just the business process and data itself, which include customer records, pricing information and workflows that are only what matters for the success. Computing and the application license is very effective in reducing cost and for and outsourcing. Internet scale may also soon become a commodity by the SaaS adoption.

Standardized applications: All the application tools are getting standardized day by day and it is being preferred by the people. A spreadsheet, e-mail system and many other application tools are there, which are present everywhere around you that enable the user to easily switch over from a system to the other. This is quite clear, as they are numerous web-based calendaring, e-mail systems and spreadsheet that have come up recently.

Parameters can be used: In earlier days, if you had to modify anything in a workflow, it could be done only by changing the code. Nowadays, especially in a web based application, parameters and macros can be used either to create a new application or modify the one. SaaS providers also enable its user to customize the application with some basic set of function.

Specialized Software: Software gets specialized by the provider for doing a particular task only keeping in mind the global markets. Such software may find it difficult to be popular initially, but very soon it finds its place in the market and becomes quite preferable. Same goes for SaaS providers. They can bring products in the market, according to the needs.

Consistency of web system: Though there are periodic outages and up and downs, still people are not backing out with the use of public Internet. HTP (Hypertext Transfer Protocol) and TCP/IP stacks for delivering business function to an end user. Thus, the web system is still being reliable for the user.

Security: When it comes to security of SaaS, it is well trusted and clear: SSL has made possible for the organizations to reach their applications without any complication and load of an end-user configuration or VPN.

Enablement technology: This technology enables the other seller to build SaaS applications fast. Thus, it seems that it will play imperative role for driving a SaaS adoption. As SaaS is in infancy, a lot of companies have built either the enablement tools or several platforms.

The bandwidth of wide-area networks (WAN) is increasing considerably day by day. Quality of network is also improving, which are thereby increasing the trust of the people in accessing far-off locations & applications having lower latencies with acceptable speed.

The software can be democratized by the SaaS permitting the small businesses with the medium ones to access the functionality before the large enterprises. Now, you can take the benefit of SaaS applications, as it is also available on the basis of monthly subscription.

Data Aggregation: Data for each and every customer can be stored in the single database scheme (multi-tenant). Hence, it becomes very simple and easy for you to have the details of any customers.

Limiting Factors of Saas

SaaS was initially considered as a prospective security & operational risk. Along with so many advantages, it has disadvantages also. It is a desire of many businesses to keep information technology operations under the control of internet. However, professional, who work on SaaS opposes it and they say that the security & redundancy tools, which are available to them, are much better and hence, you can conclude with it that such professionals are having excellent level of service. Those businesses, which require extensive customization, only in those cases SaaS face some troubles.

However, if you will analyze all these things properly, you will see that have succeeded a lot both in terms of customization and advertisements when it is compared in reference with their programming interfaces. However, at this time of recession, you can have your own software application, by combining inexpensive hardware, low cost bandwidth and open source applications. These help in convincing economic reasons of businesses to build their own software product.

The data transfer takes place in SaaS with the help of internet. Sometimes, it becomes very expensive and you will feel that it is very difficult to maintain it. If it would have been at Ethernet speed, then it would sound much better. In such cases, you may face some problem with the back end system like firewall might not be able to permit integration with the same. When you will initiate an application, it will not be very easy to understand and handle the sa,e. Such problems get solved by hybrid SaaS model.

SaaS is implemented at a wide range and then it needs well-defined service for describing and promoting it. Economy of the scale and ability to balance the sale and demand is required in such cases. It is then only you will need IT areas that are everywhere and article of trade like. Thus, it shows that you cannot use SaaS for pioneering of extremely specific functional systems.

If you are manufacturing any product and you are having shortage of substitutability & second sourcing alternatives with any commodity, it creates the strategic weaknesses of customers when competition, security and pricing are considered. Our present industry is having the lack of portability & interoperability between the vendors, which create an obstacle between adoptions of SaaS. It reflects that if you want to move from a vendor to another, it will require a lot of time and effort from your side. Open sourced standards are opened to resolve such problems and make it easy for you to transfer from a vendor to another. Enlargement of market based on such open sourced standards are also helping in this move.

Open source solution has provided us with so many advantages that are worth to be considered. Now, if you will check out open source solutions, you will see that there is an increase is in its quality and even now it is very easy to install it. SaaS provides a much better service than that provided by open source solutions.

But, now the problem is this only solves the portability factor. How can one solve the problem of substitutability? SaaS has come up with businesses that require extensive customization. This customization will reduce the problem of substitutability at a great extent. It offers you with non-strategic business activity, but its strategic business activities are still a matter of question.

If you are user of SaaS, then a strong confidence is an essential thing for your success. You should build strong confidence in yourself. A balanced service agreement is very helpful in enhancing your confidence because it offers opportunities to make your issues right. However, it should be done in the limit, which will be suitable for the client. The provider, who is providing you with this opportunity, should be believed with both the purpose and the capability to protect the information.

Sales Channels

Gradually direct selling is becoming very difficult to afford because it is very pricey to undertake it. Due to the high price tags, the products, which are having the range below $100 and has its marketing from the mid-market, the market is becoming very tough. SaaS companies always look for better option to do business with. They consider different VARs (value added resellers), MSPs (Managed Service Providers) and MMSP (Master Managed Service Providers) and other similar partners are taken into account by SaaS. Do not consider SaaS as just a unique mechanism to deliver. It is also considered as a different model and technology. SaaS has taken selling through channels as a challenge. With this, an explosive growth will be seen in sales and revenues. Now, you can have more partners and effective marketing with it. It enables the complete visibility of any company.

Alternative pricing model of SaaS

Alternative pricing model can be implemented to focus on the establishing factor and maintain recurring revenue streams when software as a service (SaaS) applications are developed. SaaS vendors generally charge some monthly subscription fee for hosting the applications. Charges can be incurred every transaction, event or similar other terms. These pricing models are in the market due to the reason that customers lease this application from the vendor, who has the ability of viewing all the activities, transactional or any other mode, in the system.