Software as a Service

Software as a Service (SaaS) is a model of software delivery where the software company provides maintenance, daily technical operation, and support for the software provided to their client. SaaS is a model of software delivery rather than a market segment; software can be delivered using this method to any market segment including home consumers, small business, medium and large business.

Key characteristics of software delivered by SaaS

The key characteristics of SaaS software, according to analyst IDC include:

Network-based access to, and management of, commercially available (e.g., not custom) software
Activities that are managed from central locations rather than at each customer's site, enabling customers to access applications remotely via the Web
Application delivery that typically is closer to a one-to-many model (single instance, multi-tenant architecture) than to a one-to-one model, including architecture, pricing, partnering, and management characteristics

Types of SaaS Providers

There are two types of SaaS providers. The first has often been referred to as an Application service provider (ASP) where a customer purchases and brings to a hosting company a copy of software, or the hosting company offers widely available software for use by customers, such as hosting Microsoft Office and making that available across the web to customer who pay a fee per month for access to the software. The second type of SaaS provider offers what is often called software on-demand, where a company offers to customers software specifically built for one-to-many hosting. This means that one copy of the software is installed for use by many companies who access the software across the web.

In the first of these types of providers, a licensing fee and a monthly fee are quite separate being paid to the maker of the software and the hoster of the software as appropriate. The second type of hosting is where there is no division between licensing and hosting fees, and where there is little to no customization of software for each customer.

ASP versus SaaS

The reason for moving away from the term ASP or Application service provider is that the ASP generation was merely traditional client-server applications with HTML frontends added as an afterthought. These applications were hosted by third-parties who ordinarily did not have application expertise, but were managed servers. Because the applications were not written as net-native applications, performance was poor and application updates were no better than self managed applications. By comparison, current net-native SaaS applications or independent portions are updated regularly, many daily.

This gradual shift in the terminologies also is a direct reflection of the change in the business requirements demanded by clients. The focus in SaaS is more on what the customer wants rather than what the vendor could give as was the case in an ASP.

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Key characteristics of software delivered by SaaS

Types of SaaS Providers

ASP versus SaaS

SaaS providers

See also