SaaS, What is it and Why do you Care?

SaaS, is it just another term or is it really something to hang onto? Find out why you’ll want to hang onto this one and where the industry is headed with another informative ComCenter Blog post.

In the modern internet, terms come and go so fast, it’s impossible to keep up with all of them. So if you are unfamiliar with “Software as a Service” or SaaS, have no fear. You won’t be unfamiliar much longer.

The Definition

Wikipedia does a good job of describing what SaaS is. Of course, if you want to find out about SaaS without a headache, we’d be glad to break it down into a more manageable bit for you.

SaaS is essentially a program that is based online (in the “cloud”). To access it, you need only an internet browser and, likely, an account with the company. Now you can use it for whatever purpose it was designed for.

Generally speaking, SaaS programs are written for business applications of every stripe and color. From accounting to collaboration and from human resource management to content and service desk management, there is a SaaS program that does it.

The Growth

According to the Wikipedia post, SaaS sales amounted to “$9 Billion, up 15.7% from 2009.” Most startling is that SaaS is projected to continue growing at this rate for 2011 and by 2014 it could amount to 16% of total software sales in the enterprise (business) software market.
It is speculated that every enterprise software company has at least one SaaS offering today, with plans to increase those offerings in the very near future.

Pricing: SaaS Vs. Traditional Software

We’re all familiar with paying once for a program and its licensing fees, then continuing to pay a smaller fee each time we need support. That’s the status quo when it comes to buying software, but SaaS takes a radically different approach.

With an SaaS program, a user generally pays a monthly or annual fee that is compounded “per user”. However, it is possible for SaaS providers to charge by transaction since the data resides with the software company rather than with the user but these types of charges are not common.

SaaS is almost always cheaper in initial setup cost than traditional software. In fact, SaaS has coined its own term: freemium. You get to use it free, with limited functionality. Everything above this base functionality costs you or your businesses. Most business owners like this because they can choose services one by one and as they need them.

What it Means for Businesses

The fact that so many software companies are developing this software points to a genuine interest and implementation by major players in all areas of the business world. When that kind of implementation happens, it won’t be long before everyone will be on board and the flood gates will open.

Stay tuned. In the coming weeks we’ll be breaking down specific SaaS offerings that are being used by businesses of all sizes. It ought to be fun and it should help your business get more done at the same time.