Why Use Software as a Service (SaaS)?

First off, what is it?

• It is hosting and maintaining a software application and charging customers on a monthly or annual subscription basis to use it.
• You also receive hardware processing power and storage capacity you would not normally be able to afford
• The software does not reside on your computer but is hosted on a server in a “hardened” facility to insure against disaster
• It is a “pay as you go” service delivered online.
• It is most popular with small and medium sized businesses because it allows them to spend time on their business and not on being a computer expert
• Examples: Website hosting companies, Salesforce.com, eBay and Mailstreet.com

What are the advantages?

• Lower upfront risk – we have to keep you happy every single day
• We invert the risk equation for software implementation
  • Instead of paying for the software before you implement or use it, you just pay a monthly subscription fee
  • We have to stay involved if you are going to continue on with us
  • We become a partner “on retainer” rather than a one time vendor
• Spreads your costs over time – no large upfront costs
  • No expensive hardware, server software, support contracts, or computer consulting services investment
  • Single software usage, maintenance and hosting fee – no worries for you
  • Easy to add users as your business requirements grow, use only what you need today
  • You are always operating on the most current hardware – no continued investment
• Disaster recovery – if your operation is destroyed or your computers are stolen you can be up and running with a borrowed PC since your data resides on computers in secure hardened facilities
• Upgrades, backups and maintenance are done automatically – you are always operating on the most current version with instant access to new functions and features
  • Allows you to deploy and run software without computer professionals being involved
  • Tech support and training are easily done online with a real human being
  • Rapid problem resolution
  • Backups are done automatically, 24/7 in a monitored environment
• Remote management ability – you can manage your operation from home or when you are out of town directly without the use of additional online portals or expensive software
• Highly secure, more secure than your own computers when you are online
• All you need is a computer and an internet connection

What is our response to the Nay-Sayers?

• “Not safe – someone will get my data, see my financials, etc.”: Our hosting facilities are more secure than your own computers. Hardware Redundancies are in place, power supplies, firewalls, etc. It is safe as an ATM, banking sites, online banking, etc.
• “Not dependable – what do I do if my internet connection goes down?”
  • Ability to work offline in a limited fashion, upload after reconnecting
  • As dependable as electricity, or hardware. What would you do if the lights went out, or your server crashed? Everyone should have a backup plan for operating in an offline mode, or a disaster situation.
• “Not mine” - SaaS allows you to use the power of software you could not afford to use or implement if you had to pay for everything yourself.

It’s about value and investment, not cost. Considering the value of everything involved, the real question is Why Not Use Software as a Service?

What other people are saying about Software as a Service

“SaaS…is a task-oriented business solution delivered in a timely manner.”
“SaaS is an enabling technology.”
The True Value of SaaS. By: Schwartz, Ephraim. InfoWorld, 11/21/2005, Vol. 27 Issue 47, p10-10, 1p

SaaS “empowers business units enabling them to buy, deploy, and run software without IT involvement, “ says Liz Herbert, an analyst with Forrester Research.

“It’s lower risk and can deliver and faster return on investment,” Herbert says. Thinkstrategies’ Kaplan agrees: “Packaged applications are difficult to maintain. SaaS costs can be amortized over time as well.”

“The trend for SaaS is growing among mid-market customers, but it’s not for highly-customized and specialized IT shops,” Herbert says.
Pay-as-you-go pricing picks up. By: Dubie, Denise. Network World, 8/1/2005, Vol. 22 Issue 30, p48-48, 1p

A study by IDC shows worldwide spending on SaaS reached $4.2 billion in 2004, a 39% increase over 2003. That growth will continue over the next 5 years and reach $10.7 billion in 2009.

Buyers from small and medium-sized businesses and divisions of larger companies are leading the charge as the most frequent SaaS adopters, according to Erin Traudt, SaaS research analyst at IDC.
On Demand Is in Demand. By: DeFelice, Alexandra. CRM Magazine, Jul2005, Vol. 9 Issue 7, p18-18, 3/4p

“Gartner, Inc. predicts that by 2008 more than 50 percent of software purchases will be obtained via SaaS.

“Both vendors and customers see SaaS as a win-win situation. Vendors can take care of implementation, security, scalability, and availability of software applications for companies as well as offer customized software choices while increasing their sales and revenue. Likewise, customers can benefit by subscribing to software on an as-needed basis, reducing investment risks and actual ownership of software licenses, and freeing internal funds and staff for other uses.”

….the SaaS concept is an idea that has strong potential "and not just for the short term but for the long term" because it promises to provides large-scale efficiencies to customers, said Gregory Gronowski, vice president of sales and software commerce at Aladdin Knowledge Systems Ltd.

New kid in town.(2005 Software Information Industry Association Spring Conference). Information Today 22.7 (July-August 2005): p29(1).