Software as a service is hot, but not always fully understood. These points can help clarify SaaS' benefits for small and midsize companies
Software as a service is kind of like the brooding high-school rebel in the black leather jacket: cool and popular, but woefully misunderstood.
In an effort to get to know "him" better, I attended a session at the recent Interop New York conference called "Software As A Service: Will It Work This Time?" Jeffrey M. Kaplan, managing director of THINKstrategies and Software-as-a-Service Showplace, took us all up close and personal with SaaS.
On the one hand, there's not that much to know. SaaS is really just software designed to leverage constant Web connections, delivered and priced as an ongoing service instead of as a one-time purchase or license, and managed by the vendor, not the purchaser or licensee. But I also learned five things that every small and midsize company should know about SaaS:
Thing Number 1: SaaS is Already Here
Software as a service may sound new, but you're probably already using many SaaS applications, even if you don't think of them that way. There's a lot more to SaaS than replacements to alternatives to Microsoft Office and other desktop productivity applications.
Many of today's most popular consumer applications, including eBay, MySpace, iTunes, YouTube, and even search engines like Google and Yahoo, are essentially SaaS apps. In the business world, SalesForce.com is "the gorilla in the room," Kaplan said, but there are hundreds of others in many categories, including WebEx, for example.
In fact, Kaplan cited surveys showing that in 2005, 65% of businesses were using or considering using SaaS, but that figure had grown to 74% in 2006. He predicted that SaaS will be considered mainstream by 2008 and even laggards will be on board by 2010.
Thing Number 2: It Will All Be Different This Time
This is not the first time around for SaaS. In the 1990s, people called the concept Application Service Providers (ASPs) or managed services, and it pretty much went nowhere.
SaaS is new in design, if not in concept, because the technology has greatly improved. First, broadband connectivity is much more available these days. And technologies such as virtualization, grid computing, and Web services make everything work better when you're connected.
But technology isn't the only difference. While Kaplan admits that the "line of demarcation is very blurry" between SaaS and managed services, SaaS goes further toward shifting the burdens to the provider and away from the user. Under the managed services model, for example, the software was sold per device, with the focus on network and system availability and performance. Under SaaS, the provider delivers the software functionality on a per-user basis with the focus on application availability and performance.
Make no mistake, though, SaaS technology and applications are still improving and the best practices are still maturing.
Next Page: SaaS Can Be Secure and Reliable
