Software as a Service (SaaS) Analysis

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Introduction

This paper will address some of the questions commonly raised by SMART Consultant customers in regards to converting from in house computing to internet, cloud based, computing using software as a service (SaaS). Furthermore it will provide the basic knowledge needed to perform an analysis of their business to determine if SaaS is an appropriate model. First we will review what software as a service is.

The traditional model of procuring software and installing it on your local computer is called software as a product. Conversely the software as a service model provides users access applications online as needed. Users require only a compatible web browser and suitable internet connection to use the software. The idea that users could access applications, at any time, from anywhere, through a global network dates back to the sixties. This concept has come to be known as cloud computing and it is the concept that is the foundation for SaaS.

Today the SaaS market is growing at an astonishing pace inspiring many companies to take a look at SaaS as a new model for doing business (figure 1). When contemplating the use of any SaaS application, product features, risk, legal, cost and management are all areas that should be reviewed. We will briefly cover each of these and address the common concerns surrounding each.

Product Features

New SaaS products may need to operate within the company’s existing business model. As an example let us look at the basic need of most businesses for a word processing application. Historically this market has been dominated by Microsoft Office with over a 94% market share . Google Docs is a leading SaaS competitor with less than 2% of total market share and little sign of that changin...

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...essed November 1, 2011. http://insideclouds.com/saas.php.

Flusche, Andrew. LegalAndrew.com, "Warning: Google Docs Is NOT Safe." Last modified Sept 24, 2007. Accessed October 22, 2011. http://www.legalandrew.com/2007/09/24/warning-google-docs-is-not-safe/.

Finch, Amanda. E-Commerce Times, "The Rise of SaaS and Your Regulatory Risks." Last modified Jan 31, 2008. Accessed November 1, 2011. http://www.ecommercetimes.com/story/61448.html.

Golden, Bernard. CIO.com, "The Case Against Cloud Computing, Part Four." Last modified 12 Feb 2009. Accessed October 23, 2011. http://www.cio.com/article/480595/The_Case_Against_Cloud_Computing_Part_Four.

Adhikari, Richard. InternetNews.com, "Gartner Warns on SaaS's Hidden Costs." Last modified Feb 20, 2009. Accessed October 22, 2011. http://www.internetnews.com/software/article.php/3805151/Gartner Warns on SaaSs Hidden Costs.htm.

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