Cost of Ownership
With an estimated 10 million companies using SaaS worldwide in the next 5-10 years, the SaaS industry will provide business opportunities for more than 200,000 partner companies. 65% of businesses with 100 - 10,000 employees believe that SaaS will have a significant impact on the way they purchase software during the coming year, according to IDC (International Data Corporation). The main focus for partners in the SaaS world is business process alignment, optimizing the use of information, solution deployment, application support and integration with existing systems.
Software as a service, or SaaS, is a confusing term that means different things to different people. To the consumer, it may mean the ability to buy and download desktop software using the Internet, or to pay an annual fee to vendors like McAfee or Symantec for keeping desktop virus definitions up to date via the Internet. At the other extreme, for a business organization, it may mean purchasing Internet-based application services from a third-party vendor.
Broadly speaking, SaaS can be broken down into three main types of service:
- On-demand software purchasing where individual users or organizations try, buy and download personal, workgroup, or enterprise software across the Internet. For vendors, software-on-demand provides a cost-effective sales channel and software delivery mechanism. For consumers, it provides a fast and easy way to obtain software.
- On-demand IT service-oriented architecture (SOA) where IT system and application processing are defined and developed as a set of services that can inter-operate and exchange information with each other. A SOA offers a flexible approach to application development that encourages service re-use and reduces the need to build point-to-point connections for data and application integration.
- On-demand application services where individuals or organizations pay external third-party providers for the use of their application services. The objective of this type of SaaS is to trim software and hardware costs, and to reduce IT staffing.