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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 * !!