Software as a Service (SaaS)

The concept of software as a service (SaaS) took hold at a time when IT executives were getting supremely fed up with the ballooning costs of packaged enterprise software. Not only did they have to shell out thousands of dollars just for the licenses, but they also had to spend tens if not hundreds of thousands more to implement the software. There were the consulting fees. And the training costs. And the extra infrastructure that was required to run the software in addition to ongoing maintenance fees. Thus, SaaS emerged from the wreckage of botched multimillion-dollar ERP and CRM implementations as a radical alternative to traditional software licensing models. SaaS promised easier, speedier and cheaper implementations. The value proposition was hard to ignore, but so were the risks. To this day, SaaS remains an intriguing option for many enterprises, and for that reason, we offer the following answers to explain what SaaS is and to help you determine whether it’s right for your organization. It’s software that’s developed and hosted by the SaaS vendor and which the end user customer accesses over the Internet. Unlike traditional packaged applications that users install on their computers or servers, the SaaS vendor owns the software and runs it on computers in its data center. The customer does not own the software but effectively rents it, usually for a monthly fee. SaaS is sometimes also known as hosted software or by its more marketing-friendly cousin, “on-demand.” SaaS applications similarly support what is traditionally known as application customization. In other words, like traditional enterprise software, a single customer can alter the set of configuration options (a.k.a., parameters) that affect its functionality and look-and-feel. Each customer may have its own settings (or: parameter values) for the configuration options. The application can be customized to the degree it was designed for based on a set of predefined configuration options. For example: to support customers’ common need to change an application’s look-and-feel so that the application appears to be having the customer’s brand (or—if so desired—co-branded), many SaaS applications let customers provide (through a self service interface or by working with application provider staff) a custom logo and sometimes a set of custom colors. The customer cannot, however, change the page layout unless such an option was designed for. Engineering simulation software, traditionally delivered as an on-premises solution through the user’s desktop, is an ideal candidate for SaaS delivery. The market for SaaS engineering simulation software is in its infancy, but interest in the concept is growing for similar reasons as interest in SaaS is growing in other industries. The main driver is that traditional engineering simulation software required a large up-front investment in order to access the simulation software. The large investment kept engineering simulation inaccessible for many startups and middle market companies who were reluctant or unable to risk a large software expenditure on unproven projects. Healthcare applications. With the passage of the Affordable Care Act in 2010, the healthcare industry has experienced dramatic changes in payment structuring and increased accountability, creating the need for increased Information Technology utilization. Recent survey data illustrates the trend toward such utilization. 83% of IT healthcare organizations are now using cloud services with 9.3% planning to, while 67% of IT healthcare organizations are currently running SaaS-based applications.


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