{"id":59,"date":"2006-09-07T16:10:37","date_gmt":"2006-09-08T00:10:37","guid":{"rendered":"http:\/\/www.formtek.com\/blog\/?p=59"},"modified":"2006-09-07T16:10:37","modified_gmt":"2006-09-08T00:10:37","slug":"saas-software-deployment-model-of-the-future","status":"publish","type":"post","link":"https:\/\/formtek.com\/blog\/saas-software-deployment-model-of-the-future\/","title":{"rendered":"SaaS — Software Deployment Model of the Future?"},"content":{"rendered":"

By now you’ve probably heard of the buzzword acronym SaaS<\/a> — Software as a Service.\u00a0 SaaS is a software deployment model where a service is made available to the customer via a network, typically the Internet.\u00a0 CRM applications deployed as SaaS have been particularly successful, notably software by Salesforce.com<\/a>, NetSuite<\/a>, and Open Source SugarCRM<\/a>.\u00a0 SaaS software offerings are now beginning to show up\u00a0in areas like\u00a0ERP, BI, SFA, MRP, and Document Management.<\/p>\n

The SaaS model has a lot of positives.\u00a0 Big pluses for this strategy\u00a0is that it can free up a lot of infrastructure and startup costs are small.\u00a0 With SaaS, the customer doesn’t\u00a0see\u00a0any installation media.\u00a0 They don’t need to\u00a0spec out and buy any servers or disk arrays.\u00a0 They don’t need to dedicate people to train, support, and maintain the software.\u00a0 Hardware and Software updates become transparent.\u00a0 Software updates and patches get rolled out frequently and automatically, and the customer can be confident that they are always running on the most recent version of the software.\u00a0 Overall, the SaaS\u00a0model can make a lot of sense, especially for SMEs<\/a>\u00a0where IT infrastructure can be a distraction from the core focus of the business.<\/p>\n

With the SaaS software subscription model, customers have the luxury of being able to turn the service on or off like a utility, or to scale the number of active users up and down, as needed.\u00a0\u00a0They only pay for what\u00a0they use.\u00a0 And if the software service doesn’t\u00a0meet their expectations, it is easy to pull the plug.<\/p>\n

While there are a lot of pluses, SaaS may still not yet be an acceptable solution for large companies.\u00a0\u00a0Even though\u00a0software has become more customizable, many large companies will probably find that today’s generation of SaaS offerings isn’t sufficient.\u00a0 And the higher exposure to risk from storing company data on third-party servers accessable via the internet probably is also not acceptable.\u00a0 But the upside may outweigh these issues for many smaller companies.<\/p>\n

SaaS is the current buzzword.\u00a0 Ten years ago, the buzzword\u00a0was\u00a0ASP<\/a> and on-demand<\/a> or utility computing.\u00a0 In terms of the deployment model and the potential benefits between now and ten years ago, there doesn’t really seem to be much different between the definitions of ASP and SaaS.\u00a0 What is different though is how technology has changed over the last ten years.\u00a0 Bandwidth, CPU and Storage costs have all plummeted.<\/p>\n

Software Equity Group<\/a> offers these statistics that show how dramatically costs have changed over the last ten years:<\/p>\n

\u0096 Bandwidth<\/strong>: $1100\/megabit\/month in 1995 vs. $128\/megabit\/month in 2005
\n\u0096 Cage Space<\/strong>: $175\/sqft\/month in 1995 vs. $25\/sqft\/month in 2005
\n\u0096 Disk Storage<\/strong>: $1,300,000\/TB in 1995 vs. $3,300\/TB in 2005 (SCSI RAID)
\n\u0096 1-CPU Server<\/strong>: $25,000 in 1995 vs. $1,000 in 2005 (web server class machine)
\n\u0096 4-CPU Server<\/strong>: $360,000 in 1995 vs. $38,000 in 2005 (with 16GB RAM)<\/p>\n

On-Demand performance has improved.\u00a0 Applications have become more customizable.\u00a0 And, in general, concerns about security have lessened. The business environment is different, and that is why the on-demand model is beginning to work.<\/p>\n

It looks like the market for on-demand solutions will only grow.\u00a0 Software Equity Group estimates that currently 10% of software is sold via the SaaS model, but they expect that in the next 5-10 years that the percentage will grow to more than 25%.<\/p>\n

The world of ECM and Document Management solutions sold via SaaS is not non-existent, but it is still small.\u00a0 We expect to see more growth in on-demand Document and Content Management in the near future.\u00a0 Formtek<\/a> ECM product is being sold via a subscription model by our partner LSC<\/a>\u00a0in the UK.\u00a0\u00a0It’s a business model that is beginning to make a lot of sense and it will be interesting to see what happens with SaaS Document and Content Management.<\/p>\n

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By now you’ve probably heard of the buzzword acronym SaaS — Software as a Service.\u00a0 SaaS is a software deployment model where a service is made available to the customer via a network, typically the Internet.\u00a0 CRM applications deployed as…<\/span><\/p>\n

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