Software as a Service

SaaS Software-as-a-Service

Prepared and presented by:Prateek Singh Bapna

CSE, 3rd yr, GITS

Software as a service (SaaS) is a software application delivery model in which customers pay to access and use software functionality over a network through a hosted, web-native platform operated by the software vendor (either independently or through a third-party).

What is SaaS?

Software as a Product Software as a Service

Delivery Installed Hosted

Development Longer cycle, “big bang” Short, continuous cycle

Pricing Perpetual license + maintenance

Subscription(all inclusive)

Allocation Capitalized Expensed

Additional Costs

Installation, maintenance, customized and upgrades

Configuration

Platform Multi-version Single Platform

Updates Larger, less frequent Shorter, frequent

Sales Focus Close the deal Prove value in first 90 days

Feedback Cycle Long Short

Profits Initial sale Ongoing

Success New license revenue Lack of churn

Traditional Software On Demand Utility

Build Your Own Plug in, subscribe, pay per use

Comparisons of Business Models:

Traditional Packaged Software

Software as a Service

Designed for customers to install, manage and maintain.

Architect solutions to be run by an individual company in a dedicated instantiation of the software

Designed from the outset up for delivery as Internet-based services

Designed to run thousands of different customers on a single code

Network-based access to, and management of, commercially available (i.e. not custom) software.

Activities that are managed from central locations rather than at each customer's site, enabling customers to access applications remotely via the web.

Application delivery that typically is closer to a one-to-many model (single instance, multi-tenant architecture) than to a one-to-one model, including architecture, pricing, partnering, and management characteristics.

Key characteristics:

No large upfront costs - usually free trials High levels of security – physical, power,

pipes No install costs – low one-time costs Minimal training Anywhere, anytime, anyone–mobility Operating costs only; can be terminated; re-

sized – No capex hoops.

Advantages:

Core functionality out-sourced Broadband risk Limited personalization/tailoring No competitive uniqueness advantage Not suited to high volume data entry.

Disadvantages:

Will have to be priced based on usage Will need to be able to leverage multiple

SaaS offerings Open Standards Based Technologies Uptime will be key

–Reliability–Disaster Recovery–Security

Properties of Saas:

1. Understand your business objectives and definition of a successful outcome (idea)

2. Select and staff your services delivery team (people)3. Define and understand the infrastructure needed to

deliver your SaaS application (hardware)4. Select your hosting facility and Internet Service Providers

(ISPs)5. Procure the infrastructure and software required to deliver

your SaaS application (security your platform)6. Ready to Run

I. Deploy your SaaS delivery infrastructureII. Implement disaster recovery and business continuity

planningIII. Integrate a monitoring solutionIV. Establish a Network Operations Center (NOC), Client

Call Center and ticketing system7. Design and manage Service Level Agreements8. Document and manage the solution while open your

business

SaaS Steps:

SaaS Maturity Levels

salesforce.com

Founded in 1999 Annual growth rate is over 80% Went to IPO in 2004

Who is the most successful provider of SaaS?

Media and Content as a Service: MCaaS

◦ Media distribution as a service◦ Any digital content

SaaS as a Service: SaaSaaS, SaaS2

◦ VARs sell and manage SaaS packages

More importantly – SaaS 2.0

Future of SaaS:

Enterprise Software Application

• Perform business functions• Organize internal and external information• Share data among internal and external users• The most standard type of software applicable to

SaaS model• Example: salesforce.com CRM application, Siebel

On-demand Application

Applicability of SaaS:

Single User Software Application

• Organize personal information• Run on user’s own computer• Serve only one user at a time• Inapplicable to SaaS

Data Security IssuesNetwork Performance Issues

• Example: Microsoft Office Suite

Applicability of SaaS (contd.):

Infrastructure Software• Serve as the foundation for most other enterprise

software application• Inapplicable to SaaS model

Installation locally is requiredForm on the basis to run other application

• Example: Windows XP, Oracle Database

Applicability of SaaS (contd.):

Embedded Software• Software components for Embedded Systems• Support the functionality of the hardware devices• Inapplicable to SaaS model

Embedded software and hardware are combined together and are inseparable

• Example: Software embedded in ATM machines, cell phones, routers, medical equipments, etc.

Applicability of SaaS (contd.):

Switching CostSolution: Make customer happy

Limited flexibilitySolution: Make everything customizable, Application Exchange Platform

Security and PrivacySolution: Be careful and professional as much as possible.

Challenges of SaaS:

Design and development Revenue models Sales and compensation Partners and distributors Customer service Product support and maintenance Research and development Legal Valuation and funding Exits and liquidity SaaS pure play vs. dual environment Deciding if SaaS is right for you

Other challenges:

SaaS is relatively new and untested. SaaS is just another version of the failed ASP and hosting models

of the past and will suffer the same fate as its predecessors. SaaS only relieves companies of the upfront costs of traditional

software licenses. SaaS is only for small and mid-sized businesses and will not be

accepted by large-scale organizations. SaaS only applies to applications such as CRM and Salesforce

automation. SaaS will only have a minor impact on the software industry and

will fade over time. It will be easy for the established software vendors to offer SaaS

and dominate this market. SaaS is only for corporate users.

Myths:

SaaS will be the way applications will be delivered – not unique competitive advantage software

All but high-volume data entry for large corporate and specialized applications

Much higher proportion of staff will have only PDAs or small footprint notebooks

Low risk – try before you buy.

Conclusion:

!! * Thank You * !!