Some of the drawbacks of the on-premises application delivery model such as remote access were addressed by the adoption of the Internet by businesses in the 1990s. The increased use of the internet led to the introduction of another application delivery model named the hosted software model which used the internet as the medium of delivering software application to end users (Sridhar, 2009). In the hosted model, the application software physically resides at a third party (called the application service provider) data centre where it is operationally managed by the service provider (Papazoglou, 2003) on behalf of the licensee. Although the hosted model addressed some of the drawbacks of the on-premises delivery model such as lack of remote access to the applica...
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...sion and ownership of the software. SaaS model eliminates the need of software installation on individual computers which makes it easy for application rendering and allow subscribers to only pay for the amount of the service they have consumed (Ganesan, Sarkar & Tewari, 2012). SaaS is based on the multi-tenant architecture, the software functionality is delivered as a set of distributed services (Buxmann et al., 2008). The service provider has one instance of the application which all customers’ access. It is an online delivery of software which business signup to use software functionality hosted by a service provider (Dubey & Wagle, 2007). This addresses the short comings of the hosted model and enable the realisation of economies of scale as only one instance of the application is maintained which significantly reduces the application overhead cost to minimum.
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