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SaaS (Software as a Service), Web 2.5, Cloud Computing are the new buzzwords in town and for good reason, they have revolutionized the delivery platform for information technology as we know it. We read, hear about and see updates on them all the time and from a technology entrepreneurs view point it’s only natural to ask oneself “To SaaS or not to SaaS?”

It appears that the SaaS and cloud computing models have proven themselves as the direction in which the software industry is headed, we are still in a transition phase with this transition where both Saas and on-premise licensed software has a place in the IT ecosystem. While deciding whether Saas is the way to go for your offering, there are a couple of questions to ask yourself and points to ponder:

Is all software Saas-able?

In the coming decade one can expect to see more software move towards SaaS with high configuration tools, technologies & platforms making even configuration and customization highly possible on SaaS. With the right PaaS (Platform as a Service) our favorite applications are likely to appear on SaaS. Right from an ERP, to accounting and inventory apps, mailing solutions, spreadsheets to anti-virus solutions.

Is SaaS good for Scalability?

A highly custom built image designing software or a product planning matrix specially custom built for a specific need may not be ideal for SaaS. SaaS is perhaps best poised for scalability, so if your application demands scale and to be uptime 24/7, as in the case of email service providers, CRM Apps, Spreadsheets, Inventory Apps its better if they are put on SaaS.

Is SaaS technology platform independent?

Since the SaaS technology is still in its nascent, stage vendors are currently collaborating to make the SaaS platform universally technology independent. So hopefully we will see a seamless SaaS platform in the near future.

What’s better, SaaS or On-Premise?

Going by the current trends & various research papers it seems that a hybrid model of both SaaS + On-Premise software will work in the ecosystem for now. Both will co-exist and even compete, but neither will have 100% of the market share in the immediate future.

Is SaaS cost-effective?

Yes, to a large extent, as in SaaS you will not pay from your CAPEX but it follows the OPEX Model. For eg: If you pay around USD 1000 for a software application one time, In SaaS you will be paying say USD 100 per month for the time you are using that application. The pay as you go / as you scale feature of Saas makes it an attractive model from the startup perspective since it allows you to scale up with an increase in demand.

Is SaaS desirable for the Small and Medium Segment?

Logically speaking yes, indeed SaaS is cost-effective when you have less users compared to a large user base, e.g. if you have say, 5 to 100 users SaaS makes sense, but when you have a large user base like, say 500 to 1000 plus users, rather than SaaS a private hosted cloud (Private SaaS) or a private server rack or a license purchase of that application will make more business sense plainly from the monetary angle.

What about security in SaaS?

How safe or secure is my data in a SaaS offering? In today’s connected world, your data is as safe or un-safe in a SaaS offering as it is lying in your office or home. So as far as data security goes, all vendors are quite aware of this issue and take enough measures to safeguard data and the systems as far as possible. While extremely sensitive data is still preferred to be kept on location through self hosted software so it can be kept within arms reach, vulnerability is still dependant on how well the server side or hosting side can secure the platform and is debatable both ways.

What about ownership of the application in SaaS?

SaaS is like owning something on a long term lease. You fully own your data and the latest, updated, patched application daily. The plus being here is daily, weekly or monthly whatever updates and features come up in the software application are also released to you within the same cost what you are paying to the vendor each month.

All said and done, if your technology offering has wider appeal, isn’t too niche or specific to one organizations or person requirement and can be scaled as an offering, then SaaS may indeed be the route to travel. If on the other hand, the purpose is highly specific and has a clear advantage as an independent licensed software, then you might want to weigh your odds more closely.

What is certain, is that the cloud age has only begun.

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Tags: cloud, SaaS

This entry was posted on Sunday, December 12th, 2010 at 3:59 pm and is filed under Business Education. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.