“Cloud-based alternative
delivery models—such as IT as a utility, storage as a service and Software as a Service—are rapidly emerging as suitable sourcing models for Government organizations.”

June 17, 2008

Software as a Service (or SaaS) is a way of delivering applications over the Internet—as a service. Instead of installing and maintaining software, you simply access it via the Internet, freeing yourself from complex software and hardware management.

SaaS applications are sometimes called Web-based software, on-demand software, or hosted software. Whatever the name, SaaS applications run on a SaaS-provider's servers. The provider manages access to the application, including security, availability, and performance.

A good way to understand the SaaS model is by thinking of a bank, which protects the privacy of each customer while providing service that is reliable and secure—on a massive scale. A bank's customers all use the same financial systems and technology without worrying about anyone accessing their personal information without authorization.

A "bank" meets the key characteristics of the SaaS model.

Why should I use SaaS?

The use of software as a service (SaaS) has been evolving over the past 10 years and the SaaS model has been increasingly popular during the last 3 to 4 years in particular.

Private and Public Sector Organizations large and small are flocking to the SaaS model for business applications. With no software or hardware to buy, install, maintain, or upgrade, the popularity of SaaS as an on-demand application service grows amongst organizations that are increasingly asked to do more with less.

For these reasons, SaaS's instant time to value is winning over even earlier skeptics. The SaaS model is making life easier for IT by eliminating implementation, hardware and software maintenance tasks, and allowing business users to access critical business functions via the web instantly and easily, without needing IT, which creates true organizational value.

With no software to install and no hardware to maintain, SaaS allows an organization to focus entirely on their mission—which is why thousands of government, educational, not for profit organizations and corporations are using SaaS to transform their operations, reduce costs & risk, and better serve their citizens and customers.

Advantages of the SaaS Model

High Adoption by Users
SaaS applications are available from any computer or any device—anytime, anywhere. Because most people are familiar with using the Internet to find what they need, SaaS apps tend to have high adoption rates, with a lower learning curve.

Lower Initial Costs
SaaS applications are subscription based. No license fees mean lower initial costs. SaaS customers can pay as they go, with no large up-front investment.

No Commitment
Because SaaS applications are subscription based, customers can always choose not to renew if they're dissatisfied.

No Outdated Solutions
SaaS applications are innovating at a rapid rate because developers are focused on what's next rather than on maintaining numerous versions of old code. SaaS vendors use the same technology architecture as the best consumer Web companies, like eBay, Google, and Yahoo!, which enables similar levels of continuous innovation.