SaaS stands for “Software as a service”. I came across this term recently when I attended the “Making Money with SaaS” seminar arranged by the SD Forum at Microsoft Campus in Mountain View CA. SaaS is a software application delivery model where the application resides not on the client local machine but on the host server. The customer accesses the application through a rich browser over the internet. Here issues like licensing, deployment and maintenance on the client site are automatically resolved. The customer does not have to pay the license and installation charges as in the “classical” software paradigm. The provider charges the customer on per user basis or per usage (click) basis. The customer does not have to make the initial big investment but can pay for the software as per usage. Some of the issues involved are security (as all the data resides over the host server), lack of client in-house control, extensive customization requirement and availability of internet connectivity bandwidth. But with decreasing hardware prices, availability of open source softwares and increasing bandwidth SaaS certainly seems a promising business model. Some application areas of SaaS include accounting, email and CRM.

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