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Software as a Service

Overview

Software as a Service (SaaS) is an emerging software architecture where major applications are hosted remotely and accessed via a web browser.

Before Software as a Service
When personal computers first arrived on the scene in the late 1970s and early ‘80s they were largely standalone machines with very “thin” connections to a network, if any. For you youngsters: software programs had to be loaded onto the computers using a form of off-line storage called “floppy disks”. Software processes ran locally, competing with other processes (like the operating system) for space which often led to something called the “blue screen of death”.

Over the next three decades personal computers gained speed, memory, and the massive capabilities of the Internet—but today most of us still rely on a computing model from the PC dark ages: software stored and run locally, putting the burden of installation, configuration, maintenance and security on individuals or on an organization’s IT staff. While floppy disks are a thing of the past, there is still a huge amount of time and money wasted downloading and configuring software on millions upon millions of desktop computers and enterprise servers.

What is Software as a Service?
Software as a Service emerged at the end of the twentieth century when internet browsers grew powerful enough to serve as a front end to complex applications--such as CRM (“Customer Relationship Management”) system--hosted at a central location on the Internet (or “in the cloud”). Salesforce.com drove businesses to embrace Software as a Service by providing an easy-to-adopt, subscription-based CRM that replaced difficult to manage internal systems at companies large and small throughout the world. Competing CRM vendors and other enterprise application categories followed, including Human Resource Management, Accounting and Marketing Automation. Now systems such as Gmail and Mozy are bringing the SaaS model to consumers.

The Advantages of Software as a Service

Easy to Adopt: Software as a Service removes one of the biggest obstacles to software adoption: installing and configuring desktop software. With SaaS systems, the software is instantly available via a web browser.
Scalable: SaaS systems can be cost-effective and efficient for smaller organizations because they can ramp up adoption gradually. But if an organization suddenly need to scale, SasS systems make that very easy.
Always be Updating: SaaS vendors constantly update their offerings in response to customer input and to make the systems more competitive in the marketplace. Every user on the system instantly benefits from these updates.

The SaaS model is in its infancy. As web browsers evolve to offer richer and more consistent experiences for users, more and more services will move “into the cloud”. The latest buzzword is PaaS ("Platform as a Service"), referring to systems like Amazon EC2 and Google App Engine that are providing lower-level software services for custom SaaS development.

Software as a Service Resources

May The Force Be With You: 4 Takeaways From Cloudforce 2011
Salesforce Keynotes are quickly becoming legendary for their marketing polish. But if you read between the lines of the slick demos, there were four key takeaways from yesterday’s Cloudforce 2011 in New York...

The 4 Stand Out Enhancements of Salesforce Summer 11
Saturday morning will mark the first time Salesforce users will be logging into Salesforce Summer 11. While this release is not heavy on features by Salesforce.com standards, the company has been on an acquisition spree as of late and the Dreamforce keynote only a few months away, so I expect to see a lot more in the works.

For me, four things in this release stand out...

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The #1 Social Media Metric for SaaS Companies
In a recent Washington Post article about how customer success is driving Eloqua’s growth, our CEO Joe Payne discussed the disproportionate importance of customer retention to SaaS businesses. Payne indicated that 90 percent of Eloqua’s revenue comes from existing customers needing more services, and, as a result, he spends more time “growing and satisfying (our) current customer base instead of worrying about the new guy.”

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