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Software as a Service Advantages

By writer (609 words)
Posted in SaaS on May 21, 2013

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Software as a service (SaaS) is a relatively new term for the concept of software outsourcing that has essentially revolutionized the idea of IT responsibility.   In essence, SaaS is a software vendor that develops, hosts, and operates web-based software through which businesses can "rent" their services.   Variously termed "application service provider" or "hosted software", SaaS has proven to have a dynamic impact on the way people build, buy, and sell software.  The potential benefits of SaaS in the marketplace include saving money and time, access to updates and innovations, unlimited availability, and data storage, control, and security.

Save Money

First, and most importantly, SaaS has made it possible for any sized business to utilize top of the line software without the huge initial start up fee associated with implementing conventional software.  These large initial fees often prevent businesses from implementing the advanced systems that best solve their business problems.  Conversely, SaaS allows businesses to roll out new software without paying enormous up front costs.  As a result, SaaS opens up an entirely new range of potential customers because it has never before been cost effective to them. 

Next, subscription to a SaaS application allows businesses to pay as they go.  An on-going monthly expense is much less demanding to a budget than a large up-front layout.

And since a business has the ability to cancel its subscription, the investment risk is much less than a costly upfront payment.

And unlike traditional licensing models, software as a service does not require a large IT staff that requires an equally large budget.  As a result, application service providers offer low cost alternatives to small to mid-sized companies who have limited IT staffs, budgets, and infrastructures. 

Save Time

Another advantage of software as a service is the significantly shorter time it takes to deploy applications.  Application deployment can take months or even years with conventional software packages.  Instead, because SaaS software is already up and running at the SaaS vendor's data center, deployment time tends to be much shorter than with a traditional one.

Gain Access to Latest Innovations

With traditional licensed software, it's typical to have to wait (and pay) for the next release to get the latest innovations or to shift a business to a new browser or operating system.  On the other hand, application service providers offer upgrades and innovations on an on-going basis as part of the software subscription.

Availability

Because SaaS is internet-based, employees and customers can access information anytime, anywhere, and from anything with a web browser.  This capability means enhanced service to customers while effectively reducing the cost of customer service.  Systems are available 24x7x365, without the need for you to manage the infrastructure yourself.

Data Storage, Control, and Security

When subscribing to a SaaS service, application data is stored on the vendor's servers rather than the company's servers.  Because Saas vendors that implement best practices back up their data in a secure location, security of the data is ensured.  Furthermore, most vendors provide customers with a way to export their data, which safeguards customer control over their own data. 

Because of the advantages, software as a service's popularity is growing exponentially.  According to a prediction by the IDC, a global provider of market intelligence, worldwide spending on SaaS will reach $10.7 billion by 2009.  Furthermore, a recent IDC survey says, "clear indications that partners believe Software as a Service is a key area of opportunity with the potential to dramatically change the partnering landscape. Survey respondents identified perceived revenue annuity as the factor making SaaS a particularly attractive long-term strategy."  It is safe to say that soon all applications used by businesses, except made-to-order applications, will be delivered as web-hosted services via a browser. 

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