Welcome to GlobalLogic Blogs

 SaaS (Software as a Service) is a software application delivery model where the vendor develops as well as operates the software application to be used by its customers via the internet.

SaaS delivers a single application through the browser to thousands of customers using a multitenant architecture. On the customer side, it means no upfront investment in servers or software licensing; on the provider side, with just one app to maintain, costs are low compared to conventional hosting.

Talking about the Cloud is fashionable. There’s one area though that makes even the advocates of Cloud Computing confused. It is the Cloud’s comparison to SaaS. Many hosting and software companies use the terms interchangeably but the truth is that the terms are not one and the same. It can be understood as the difference between TV and Cable TV. TV is a technology. However, Cable TV is a business model using this technology.

Cloud Computing refers to an architecture where web applications can scale easily to any number of users. Software as a Service (SaaS) is a business model where computing software is provided in a ‘pay per use’ model.

Cloud has simply become very trendy way of describing all things that occur “outside the firewall”.  If it’s not happening within premise, it’s happening in the cloud. Just because an app is hosted in the cloud does not necessarily make it SaaS.

The two important characteristics of SaaS are:

• Network and Web-based access to commercial software computing services where the processing is done on a third-party server, rather than at each customer’s location.
• A tenant-based pricing model for hardware, software, administration and consulting services.

At first glance, SaaS appears to be a similar version of the application service provider (ASP) model. However, ASP model concentrated on providing an organization with the ability to move certain application processing duties to a third-party managed server. The model was not necessarily concerned about providing shared services to multiple tenants. As a consumer, if the application is not truly multi-tenant, you’re not getting the benefits of SaaS.

Before we go any further, it might make sense to differentiate SaaS from other business models. As we define SaaS, the vendor rents software to users on a subscription basis and also hosts it.

This definition differentiates SaaS from several other business models such as software sold on a subscription basis to customers, who then operate it in-house or ASPs that host customer software; and BPOs (business process outsourcers) that take over the entire business process from the customer.

To understand SaaS in more details, we also need to understand its attributes and maturity levels. We’ll try to cover these details in our next blog on SaaS.

Popularity: 43% [?]