Let me begin with a small introduction to SaaS. Software-as-a-service (SaaS) is a form of software consumption, where the application is offered as a service to customers across the internet. You can consider the SaaS as “renting” the software to customers who access it over the Internet. The SaaS vendor hosts the application, which it owns, on secure servers that it owns, operates, and maintains. It is a total makeover of the existing traditional model of hosting. Isn’t it sounds like a major disruptive change on the IT scene? In spite of the extreme effort required for this change management and associated risk factors, SaaS have proven to be a universally accepted and trusted service to access application functionality through a browser.
Worldwide SaaS revenue is forecast to reach $14.5 billion in 2012, a 17.9% increase from 2011 revenue of $12.3 billion, according to a report from Gartner. The report projected SaaS-based delivery would experience healthy growth through 2015, when worldwide revenue is projected to reach $22.1 billion. Wondering, what is the secret behind the success of SaaS? Like all other successful products and service, SaaS is also very user-friendly, flexible and the list goes on! In short we can say it is altogether beneficial.
In reality, none of the steps involved in moving to SaaS are especially difficult or resource demanding. But they do require some thought and effort—and they represent a fairly significant shift in overall business strategy. In this post, let me emphasize the most compelling aspects of using SaaS, which make the adoption of SaaS model increasing day by day thus making such a shift worthwhile.
Little Upfront Investment: Traditional customer/server software systems demand a significant initial investment which makes a considerable impact on the financial situation of the organization. SaaS on the other hand provides a significantly less expensive way to try out software applications without the risk, pain, and expense of a large upfront investment.
Cost Forecasting: Software as a service subscription fees are not just reasonably priced — they generally are fixed, enabling to forecast the IT costs over several years. Whereas, traditional software purchases result in a daunting situation by demanding additional costs (for upgrading/re-engineering/licensing) every year to scale and adapt to changing environment.
No Extras Spent: Changing to a SaaS model, doesn’t require any extra investments on software or hardware. It is just an Implementation process. The good news is implementation fees can be appreciably lower than developing custom solutions or purchasing proprietary software and hardware.
State-of-the-art Technology: Ever think of about upgrading or updating your traditional in-house software? Believe me, even it if it does not bring you the intended result, will at least help you be deviated from your business goals for a while at a very huge cost. A SaaS provider takes care of this system updates and maintenance automatically. Additionally, providers are always accountable to customers for software performance and functionality, so they are generally quick to fix any potential problems organizations are facing.
Scalability: Does your traditional software meet the demand of your evolving and expanding needs? Yes, but only with huge investments and efforts. Whereas SaaS offers the ability to easily add functionality and applications available online in a quick and cost-effective manner.
As I said earlier, this list keeps going. Undoubtedly, software as a service puts comprehensive software functionality within the reach of the organization. And best of all, organizations spend less money, time and resources on their software systems and more time focusing on, and ultimately, achieving their missions. End of the day, SaaS is certainly a proficient model for any business scenario. That’s the reason why its consumption is increasing drastically. Don’t you agree?
For any questions, please feel free to get back to me.
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