Myths of Software-as-a-Service
BusinessWeek has this article about “Software-as-a-Service Myths“. The myths are:
Myth #1: SaaS is still relatively new and untested.
Myth #2: SaaS is just another version of the failed application service provider, or ASP, and hosting models of the past, and will suffer the same fate as its predecessors.
Myth #3: SaaS only relieves companies of the up-front costs of traditional software licenses.
Myth #4: SaaS is only for small- and midsize businesses and will not be accepted by large-scale organizations.
Myth #5: SaaS only applies to applications such as customer relationship management and salesforce automation.
Myth #6: SaaS will only have a minor impact on the software industry and will fade over time.
Myth #7: It will be easy for the established software vendors to offer SaaS and dominate this market.
Myth #8: SaaS is only for corporate users.
Slashdot readers have a lot to say about this. One particularly interesting discussion revolves around why SaaS is only gaining significant momentum recently. The poster jokingly claims that this is because Web 2.0-type technologies were only recently made available. I believe that this has more truth to it. Web 2.0 technologies allow better user interaction and improves the user experience as a whole. Without it, web applications tend to be tedious to use. Imagine having to reload a page from the server everytime data is needed.
Another interesting aspect to note is that IBM and other companies have been doing this for a really long time. SaaS, as the article mentions, is not limited to web-based services like salesforce.com. IBM has been using the SaaS model to sell its Lotus messaging suite for quite sometime. It allows users to paying per email address used instead of a flat fee for the entire system (I forgot their marketing name for this project). This has been around for quite sometime already. In Myth #8, software updates can be considered as some form of SaaS scheme too.
The most important success factor of SaaS is that it relieves companies from having to invest resources in maintaining these types of infrastructure and services that are not directly related to their core business. Hence, not their core competency. Go outsourcing Go!
