Why SaaS will be the only way ahead.

The concept of software as a service was first laid out in 1999 in an academic paper by professor Keith Bennett and his collaborators at the University of Durham, Keele University and UMIST in the UK. The acronym "SaaS" was allegedly not coined until several years later in a white paper called "Strategic Backgrounder: Software as a Service" by the Software & Information Industry’s eBusiness Division published in Feb. 2001, but written in fall of 2000 according to internal Association records. As a term, SaaS is generally associated with business software and is typically thought of as a low-cost way for businesses to obtain the same benefits of commercially licensed, internally operated software without the associated complexity and high initial cost. Consumer-oriented web-native software is generally known as Web 2.0 and not as SaaS.This is around the same time that Harvard don Nicholas Carr was also stating that IT was not relevant and that quite shook up the world and most certainly the IT world with everyone denouncing him. The thought that investment in hardware and software and solutions and systems provide no competitive advantage took siege in some parts of everyone’s minds.

The growth of the managed service provider and the application service provider concept soon made companies and consumers realising that leasing was a better option than owning it. More so as technology obsolesce soon made IT budget spends spiral out of control, here was an option where maintenance and upkeep would be moved out of the company. Here then was an idea whose time had come, but somehow the infrastructure was never there and the mindsets would need changing. Who after all would give control of their servers and databases away. But soon they did; data centers took shape and IT managers realised that the time for hardware as a service had come. The parallel development of cloud computing and the thought that lease was better than own soon saw the birth of the CRM as a service company salesforce.com. This was the first time that the customer data base actually left the company servers and was on machines hosted elsewhere. The pundits have given many reasons for why SaaS is the way to go and Nick Carr is as usual on the forefront championing this revolutionary way to deliver and maintain software. Today as the worthy have offered – all is in fact a service XaaS; cloud computing is HaaS – hardware; platforms can be services these are hosted software that serves as a platform for building SaaS offerings on – like Facebook for example; Google App Engine. Who really needs sw upgrade hassles really? click to enlarge Why would anyone have to pay for the fact that the companies sw engineers did not get it right the first time and a patch has to be released. The as a service offerings make it a much less troublesome experience for customers and is easy on the wallet with a transparent pay as you use pricing. Today with the re emergence of the thin client or what is the hard drive less existence, smart phones and hand helds with much lesser memory than computers have; software as a service is the way forward to content delivery and consumption.

It is the way ahead today also because of certain other imperatives or rather will be an outcome because of at least  two things that has happened in the last two decades. The first was the telecom fibre capacity build out that started in the 1990’s and made bandwidth available and the second is the current data centre build out that the large internet and software companies have had to do to satiate their customer demands. Google’s core business depends on how well they cache the internet and that is a lot like saying that their business has to scale well as it has to be an internet 2 of sorts. Amazon needed servers to be able to keep up their store front and today they have enough to lease out to people to build and host applications on, by the hour mind you. A company like APC that used to make power back up systems today has its main business vertical as the data centre to address the global build out that is happening. Application as service offerings hosted on these server farms will unlock the value in these machines and be the return on investment for all the electricity that they eat up. The main point though is that customers need it and even if they are not yet doing so in the greatest numbers, they will soon wonder why they pay for hardware obsolescence and software upgrades for an enterprise wide roll out when you can just as easily lease it and never have to worry about the technology road maps. There is the alluring promise of the whole new host of functionality and capability that comes in with the services oriented architecture. Imagine the pleasure of having a document saved in such a way at such a place that you can open it anywhere on any device and edit it.

There are still some that argue that SaaS is not mainstream yet and there are others that still want to own all their machines and files and everything. I am certain that the CIA and FBI will never really warm to the idea but that apart; you and I and most certainly a lot more companies and enterprises will soon move to this way of doing business. Smart hand held devices like the iPhone will be the catalyst to spur this growth. Economic recession will also play its role the low-risk, pay-as-you-go model will give SaaS vendors a big competitive advantage if capex budgets are slashed. According to Goldman Sachs: “The ability to quickly and easily turn on new applications with a significantly lower initial cost of ownership makes SaaS an attractive offering … these benefits are likely to be key in a slower economic environment where purchasers of software may be increasingly skeptical of significant upfront investments". Microsoft’s stance is interesting and their SaaS architecture expert Gianpaolo Carraro opines that “Similarly to what happened about 10-12 years ago where the growth of the Intra-net was faster than the Inter-net (certainly in terms of $ if not in global terms), in 2008 SaaS … will grow faster inside the corporate boundaries than outside.” Of course, it’s in Microsoft’s interests to see enterprises deploying SaaS internally (and thus having to buy more server licenses to do so) than it is to have them consuming SaaS externally because the external SaaS vendors are typically running Unix-based data centers and using open source platforms.

About Soumya
A technology enthusiast, forever enamored by all that it hath wrought and of course here is an attempt at making sense of it all and perhaps simplifying it!

One Response to Why SaaS will be the only way ahead.

  1. Star says:

    Thanks in support of sharinhg such a fastidious thinking, piece off writing is pleasant,
    thats why i have read iit entirely

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