Software as a Service (SaaS, typically pronounced
'sass') is a model of software deployment whereby a provider
licenses an application to customers for use as a service
on demand.
SaaS software vendors may host the application on their own web servers
or download the application to the consumer device, disabling it after use or
after the on-demand contract expires. The on-demand function may be handled
internally to share licenses within a firm or by a third-party application service provider (ASP)
sharing licenses between firms.[citation needed].
On-demand licensing and use
alleviates the customer's burden of equipping a device with every conceivable
application. It also reduces traditional End User License Agreement (EULA)
software maintenance, ongoing operation patches, and patch support complexity
in an organization. On-demand licensing enables software to become a variable
expense, rather than a fixed cost at the time of purchase. It also enables
licensing only the amount of software needed versus traditional licenses per
device. SaaS also enables the buyer to share licenses across their organization
and between organizations, to reduce the cost of acquiring EULAs for every
device in their firm.
Using SaaS can also conceivably
reduce the up-front expense of software purchases, through less costly, on-demand
pricing from hosting service providers. SaaS lets software vendors control and
limit use, prohibits copies and distribution, and facilitates the control of
all derivative versions of their software. SaaS centralized control often
allows the vendor or supplier to establish an ongoing revenue stream with
multiple businesses and users without pre-loading software in each device in an
organization.
The sharing of end-user licenses
and on-demand use may also reduce investment in server hardware or the shift of
server use to SaaS suppliers of applications file services.
As a term, SaaS is generally
associated by software professionals and business associates with business
software and is typically thought of as a low-cost way for businesses to obtain
rights to use software as needed versus licensing all devices with all
applications. The on demand licensing enables the benefits of commercially
licensed use without the associated complexity and potential high initial cost
of equipping every device with the applications that are only used when needed.
Virtually all software fits the
SaaS model well.[citation needed] Many Unix
applications already have this functionality whereas EULA applications never
had this flexibility before SaaS. A licensed copy of a word processor, for
example, had to reside on the machine to create a document. The equipped
program has no intrinsic value loaded on a computer that is turned off for the
night. Worse yet, the same employee may need another fully paid license to
write or edit a report at home on their own computer, while the work license is
inoperable. Remote administration software attempts to
resolve this issue through sharing CPU controls instead of licensing on demand.
While promising, it requires leaving the licensed host computer on and it
creates security issues from the remote accessing to run an application. SaaS
achieves efficiencies by enabling the on demand licensing and management of the
information and output, independent of the hardware location. maintenance
Characteristics of SaaS software
include:[4][dead link]
Providers of SaaS generally price
applications on a per-user basis, sometimes with a relatively small minimum
number of users and often with additional fees for extra bandwidth and storage.
SaaS revenue streams to the vendor are therefore lower initially than
traditional software license fees, but are also recurring, and therefore viewed
as more predictable, much like maintenance fees for licensed software.
In addition to the
characteristics mentioned above, SaaS software turns the tragedy of the commons on its head and
frequently[weasel words] has these
additional benefits: