Software as a Service

Software-as-a-Service (SaaS) is actually old wine in new bottle. It follows

the old method of application hosting, wherein the service provider hosts your

business applications and makes them available to you remotely over the web.

Known as ASP or Application Service Provider earlier, it's now making a comeback

in the new garb of Software as a Service or SaaS. This time however, things are

a little different and look more positive. The number of applications available

under the SaaS model have increased considerably. Today, you can avail

everything from online office suites to web OSs to enterprise business

applications like ERP and CRM using the SaaS model. This trend is likely to

continue and grow further.

Market drivers



SaaS has evolved from ASP (application service provider), which too has the

same principle of providing users an access to enterprise apps over a network,

instead of buying and installing expensive packages. The only thing that a user

of SaaS-based app requires is access to the Internet and a Web-browser. There

are a number of other things that are working in favor of the SaaS model. One is

higher bandwidth availability at lower costs. Second is the pricing factor of

packaged software. Independent software vendors (ISV) provide SaaS-based

solutions, charge for the software app on various pricing schemes, ranging from

monthly fees to charges based on actual usage. The organizations can now adopt

SaaS to cut down on the capital investment that would have other wise been

incurred while setting up such apps to run from their own premises. With SaaS

the organization need not bother about the cost for software licenses,

maintenance, and IT manpower for maintaining such apps. Another factor for an

enterprise to go for SaaS is mobility. The penetration of notebooks, mobile

devices, and pervasive Internet connectivity has given employees a chance to

work from home or even while travelling. A SaaS-based app can help users access

their apps from a web-browser from anywhere and at anytime.

Emerging trends



Email, accounting, CRM, and HR are few markets where SaaS has been

introduced and become a hit. SalesForce.com for instance, is a dominant player

in the SaaS market, providing CRM solutions to customers. The SaaS app provider

arena is not just where ISVs used to dominate; now larger players like Oracle

and Microsoft have also joined the SaaS-bandwagon. Microsoft this year announced

their own SaaS initiative by providing hosted services of Microsoft Exchange

server and SharePoint software. This will allow organizations to use

SharePoint's collaborative apps and Exchange Server's mail functionalities while

saving on the cost of infrastructure needed to deploy these apps and also on

their licensing and maintenance costs.

With Web 2.0-based apps becoming the 'in thing' these days, SaaS vendors are

now making their apps as per Web 2.0 standards. SaaS app is now not merely a

standalone business solution, but a solution that provides full e-business

functionalities to an organization by integrating CRM, workflow, web-mail, chat,

supply-chain mgmt and online-help/support. Singapore-based QXSystems launched

earlier this year a SaaS and Web 2.0-based solution named WorkACE. This shows

that vendors are not just focusing on providing solutions specific to certain

business functionality like CRM, but are targeting to provide a solution that

could be used as online business environment whereby the users can interact

among themselves and share information while being able to access business apps

(like CRM or SCM) they use in their work domain.

Future trends



SaaS-based CRM apps have become successful in the market and have made their
presence felt. There hasn't been a dominant SaaS player in the ERP domain till

date, but with big names like Oracle, SAP, and Microsoft entering the market, we

might see some action very soon.

The SaaS-based ERP solutions can be really beneficial for SMBs which

recognize the value of integrated ERP systems but lack the financial resources

and technical expertise to implement it. Now SaaS-based ERP solutions have

dramatically changed the scenario and opened up the SMB market toward ERP

implementation. There have been speculations that SAP would be launching their

ERP products based on the SaaS model mainly to attract the SMBs.

Platform-as-a-Service



Another trend that's catching up is Platform-as-a-Service (PaaS), wherein an
independent development platform would be provided enabling developers and

programmers to create and deliver any kind of business app, entirely on-demand

and without software.



The PaaS vendor would expose their APIs to developers so that they can develop
customized solutions as per the organization's requirement. Now organizations

would be able to develop solutions without having to maintain a large

development infrastructure.