SAAS `software as a service' model’

Can you imagine changing your car every quarter?" the car buyer generally keeps the same model for at least half a decade. This is regarded as a sound investment as the user takes ownership of the car for a long term.
Software, however, changes every three months. So it would make sense for the provider to license the software only for three or more months at a lower price, and allow the user the freedom to look for better software or choose an update from the provider
Enter SaaS or `software as a service.' SaaS is a method of selling software in which a vendor or service provider hosts the applications and makes them available to customers as a service, rather than as a product. The fundamental idea remains constant: instead of buying and installing expensive packages (enterprise applications), users can now access them over a network, with an Internet browser being the only absolute necessity. Termed as an irreversible phenomenon, this model is set to flip India's software makers on their side and give the consumer control. For it allows you to do all the work that you ever do on your regular computer (home or office) using any computer in the world as long as it is connected to the Internet.
Portal to your data
"It is the portal to your enterprise data: your browser is now the only thing you need to access all critical office information," says Jeremy Cooper, vice-president, marketing, Asia-Pacific, Salesforce.com, a Web site that offers enterprise resource planning (ERP) and customer relationship management (CRM) applications online.
Enterprises that need CRM had to previously spend lakh on licenses, training and implementation. Now, with a few clicks, they can get under way, thanks to Web-based firms such as Salesforce.com that host the software at their offices, allowing the buyer to access the information over the Internet, using a browser.
With high economic growth perceived in the small and medium segments, coupled with large enterprises consolidating their IT investments, software licenses will soon have to vie for attention alongside software as a service, adds Kiran Datar, Managing Director, WebEx Communications India.
WebEx offers conferencing applications online and is one of the pioneering firms offering software via this model. Tata Consultancy Services is also adopting the software as a service model. Initiatives include the offer of a core-banking system (FNS) for cooperative and regional rural banks online and plans to extend the model to its suite of products in the insurance, healthcare and retail spaces.
Opportunities in India
India and China have been ranked as having the greatest potential in the mid to long-term future by `software as a service' application vendors. The market for this is expected to grow to $48 million by 2008
Application areas
Currently, the software as a service model is gaining traction in both generic applications such as CRM, HR/Payroll as well as the more specialized chip design industry.
"It is expected that the market for enterprise resource planning, supply chain management and human resources applications will grow significantly, opening up new opportunities for on-demand vendors," say analysts. E-learning and conferencing are also expected to take off with its adoption. Online banking and share trading would offer an opportunity to use the SaaS model. One of the innovative trends noticed by experts is the use of software as a service in publishing. With the increasing availability of e-books that can be bought and read on the Internet, this concept would probably see book lovers opting for the online medium.
Saving on costs
By adopting SaaS-based applications for certain business processes, small and medium businesses can reduce capital investment (which they might incur in terms of setting up huge infrastructure, resources, software licenses, maintenance/upgrade costs and skilled IT manpower, if they buy and run similar applications within their premises)
Feedback mechanism
An advantage of the concept highlighted by Datar of WebEx is the ingrained feedback mechanism giving more power to the lay user: SaaS users can constantly provide a stream of feedback on what's working and what's not. With `software as a service', the average Indian can use custom versions of the big software packages at affordable costs. One example is TCS's webhealthcenter.com, which offers professional medical advice reachable to anybody with access to a PC. The Rent-a-software model is bound to work as it did in other markets — from real estate to cars to video-cassettes and DVDs
Benefits of 'Software as a Service'
Software as a Service (SaaS) is an emergent mechanism of delivering software applications to customers over the Internet. Software as a Service or On Demand software can be implemented rapidly and eliminates the infrastructure and ongoing costs that traditional applications require. cyn.in offers all the following advantages of Software as a Service.
Low cost of entry
As opposed to on premise software, SaaS is delivered to organizations as a subscription model, usually billed on a per user per month basis. This means that the costs are granular in nature and are incurred only as long as benefits are achieved. This does away with the enormously large upfront payments and massive annual license fees. cyn.in offers a simple pay as you go pricing with no long term contractual requirements.
Zero Infrastructure - Reduced Overheads
Since the application is hosted by the service provider, investing in expensive infrastructure is no longer required. All large initial investments on hardware, licenses, databases, ongoing overheads of employing and training IT staff, software and hardware maintenance and upgrades are minimized.
Cost-effective Infinite Scalability
The pay as you go model of SaaS, gives the customer the freedom to adapt to the changing usage of the software, on demand. For example: You can buy the application for two employees to start with and then after a few months decide to adapt it for a department of 10 people, and on achieving measurable benefits, the software can be provided to the entire organization of say 5,000 users. Software delivered as services provide all of this scalability, without requiring customers to plan for it.
Focus internal IT initiatives only on direct, line of business technology
SaaS strategy not only eliminates the need for additional IT infrastructure spends, it substantially takes the burden off your internal IT staff. With the SaaS advantage, your staff does not have to manage upgrades, troubleshoot problems for generic software applications. This helps the company to direct limited in-house IT resources towards more business oriented initiatives.
Platform Independence
SaaS based solutions are hosted centrally with the service provider. No software to be installed at the customer€™s premises. The software can be accessed on the Internet via a browser only. On Demand applications can be used by Windows, Linux or Mac users, providing true platform independence.