Software as a Service

Jan 31, 2007

It's On-Demand and Pay As You Go

By Ricardo Harvin
E-mail questions for Tech Tools to rharvin@uschamber.com.

Tired of buying expensive business software that has more features than you'll ever use? Then Software as a Service (SaaS) may be just what you're looking for.

With SaaS, you pay a monthly fee to a service provider for on-demand Web access to business programs. You pay only for what you use instead of shelling out a few hundred dollars (or more) to buy a standard desktop program that performs dozens of tasks that you don't need.

All software installation, maintenance, and upgrades are done by the SaaS service providers on their servers. These costs are included in your monthly fee, which is usually determined by the number of applications you use and the number of people using them. You can say good-bye to the hidden maintenance and upgrade costs common to most standard desktop software. In addition, you can save time and money using SaaS by not having to upgrade or replace your computers in order to run the latest version of a program.

Most SaaS companies provide programs specifically geared toward small business owners, and most major desktop software companies are in the process of adapting some or all of their offerings to the SaaS model to serve the small business market. If you need human resources, customer service, payroll, or accounting services, to name a few, there's a SaaS application out there for you.

You can decide to move some applications to SaaS and keep others on your desktop. Because most SaaS providers offer both stand-alone and suites of products, you can choose to migrate from desktop to on-demand one piece of software at a time or in one fell swoop.

With SaaS, you don't own the software; you're basically subscribing to or renting the right to access a vendor's offerings. If you have trouble connecting to your vendor's Web site, your business could be shut down for the period of time it takes to reestablish a connection. As with desktop software, switching vendors could be slow, difficult, and expensive. While all these concerns are valid, you're no more likely to run into serious problems with a SaaS vendor than you are with the software that's running on your computers.

If getting what you need, when you need it-and only paying for what you use-appeals to you, then start thinking of software as a service and not merely a product.

E-Sources

SaaS Showplace, directory of service providers
ZDNet Blog article, "What to look for in a SaaS vendor"

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