This piece looks at software on demand or software as a service (SAAS) option for startups and medium enterprises looking to reduce their upfront technology investments as well as technology management headaches.
Technology investments form a significant part of the expenditure of any organization, big or small, If you listen to the pundits, without technology investments, you are dead. And if you listen to those who have tread the path, then the headaches associated with even a simple setup can leave you with a similar feeling. This is why many startups and medium businesses either avoid technology investments or spend too much of their time, money and energy on the subject. Web technologies and bandwidth availability have now matured sufficiently for us to look as hosted, managed applications as a way out of being caught between the devil and the deep sea.
How does it work?
They go by different names- managed software services, software as a service (Saas), cloud computing or the older, application service provider (ASP), But the basic business model is the same. With SasS, you do not buy, install or run the application at your end, all that is taken care of by the vendor at his data center. As there is no installation, there is no need to buy expensive hardware either. You pay on a per-use basis (times number of users, messages, documents, etc.), usually every month, in advance. Depending on the service, there may be a setup and configuration fee. For some services, customization is also possible, that at times could end up being higher than the annual fee. In most cases, it is as simple as going to their website and signing up. You pay with a credit card, configure the service yourselves and you are ready to go. And in most cases, you get a free trial period, which I would strongly advice you to use to get a feel of what can be done and more importantly, what cannot be done.