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Low cost, pay per use is becoming popular among small and mid sized companies.
By Jose L. Anton
Software as a service or Saas has been always operating under the radar screen for long. It is only lately, that developments in technology have pushed it to the forefront. The obvious advantage of software as a service model is the drastic reduction in cost. Institutions and individuals can now pay for the software depending on usage rather than licensing the entire software package. Another no so obvious advantage is the absence of maintenance on software. One need not spend on software engineers and staff, who would install, maintain and troubleshoot. This can lead to substantial savings for an organization.
Realizing the potential of Saas, many established companies have moved into this space. The industries which are most likely candidates for Saas are the CRM and remote system administration, where most of the action is being witnessed. There is activity on the productivity suites also. The document suite consisting of a editing software, spreadsheet and presentation from Google is a very good example of Saas. One can now use any of these applications online without downloading or installing them. Another important feature of the Google suite is the online real time collaboration. Zoho is another company which has been quite active in the Saas space. These developments have dented the faith of Microsoft in maintaining its premier position in the application space. Being free, it does not help Microsoft’s cause any.
SAP, which operates in the ERP or Enterprise resource planning space , has remodeled its CRm suite on Saas. This means that SAP’s customer relationship model can be deployed at very low cost. The pay per use Saas concept is suitable for many small enterprises that do not have the infrastructure to maintain and deploy CRM software in its original avatar. Remote system administration is another area where Saas has made inroads. The nature of this business is such that systems can be maintained from any location. One of the largest VC funding for a SaaS venture this year was by Barcelona-based NTRglobal, one of Europe’s biggest SaaS players with more than twelve thousand business customers. This is only the tip of the iceberg.
The major hurdle to successful Saas deployments has been the technology. As more robust solutions emerge with better reliability and seamless integration with desktops , Saas would take a hold on the software industry. On the other hand Software giants like Microsoft are trying desperately to keep their hold on the industry with their own unique offerings. According to this camp, Saas would never be able to compete with the robustness and reliability of on-site installations. Only time will tell who is right. But as of now I would place my bets on Saas.
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