Introduction to SaaS

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Sonata's SaaS Offerings

Introduction to SaaS -     

When the whole world went dot-com crazy, a smaller band of enthusiasts were going ASP crazy. While that suggested revolution never happened, the business model that ISVs are now adopting is software delivered as a service- SaaS.

Software as a Service (SaaS) is a model of software delivery where a company adopts specific activities that provide customers access to software alleviating that customer from the maintenance and daily technical operation and support of business and/or consumer software. SaaS is a model of software delivery rather than a market segment; software can be delivered using this method to any market segment including small, medium and large business.

The key characteristics of SaaS, according to analyst IDC are:

• 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

SaaS has primarily 2 forms of delivery:

1. Application Hosting: In this form, the customer acquires a license to a traditional software application but instead of implemeting and managing it themselves, contracts with a service provider - either the ISV or a third party
2. Net-Native delivery: In this form, an ISV develops an application specifically for delivery by a service provider often the ISV itself), over the internet and charges for the application and the service on a monthly or some form of per-use basis.

The future lies in SaaS:

Forecasts on SaaS by reputed research firm IDC remove all doubts that in SaaS lies the future of the software industry:

• Worldwide spending on SaaS was poised to reach $4.9 billion in 2005, an increase of 27% over 2004 projections.
• IDC predicts that worldwide spending on SaaS will reach $9.1 billion by 2008 (CAGR: 25%)

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