1. SaaS Software as a Service Copyright © 2017-2019 Curt Hill
First used in EA
Copyright © Curt Hill

2. Introduction
The advent of cloud computing has given birth to a new way of computing
In the cloud you no longer care where the data center is located
Maybe with some restrictions
Rather than just getting a raw machine where you may install any OS and software, SaaS gives a configurable machine with just the needed software
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3. Definitions
A method of software delivery and licensing in which software is accessed online via a subscription, rather than bought and installed on individual computers
Sometimes called on-demand software
Software distribution model in which a third-party provider hosts applications and makes them available to customers over the Internet
Typically accessed by a thin client - most often a web browser
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4. History Starts in the 1960s in the Service Bureau and Time Sharing
In Time Sharing the computer is owned and maintained by a large company
Has many different pieces of software
They allow smaller companies to connect via telecommunications
Charge by connect time, CPU time, disk storage
Hardware/software rental scheme
John McCarthy gave a 1961 speech to MIT students and said “computation may some day be organized as s public utility” – sounds like SaaS
Time Sharing is first Platform as a Service
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5. Service Bureaus Similar to Time Sharing with some exceptions
The Service Bureau will also provide an IT staff for customizing/configuring the software
A company that needs a particular service (such as accounts receivable) provides only the data
Service Bureau does all the rest
Sometimes including data entry
First SaaS
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6. Rental
Both of these schemes allowed smaller companies to rent what they needed
Time Sharing: computer and standard software
Service Bureau: computer, standard software and the IT staff
Especially nice for small companies with need, but not enough resources to do it locally
At least for a while
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7. Internet
The internet’s emergence in the 1990s allows this idea to be carried on at great distance
The Time Sharing and Service Bureaus were usually local services
The emergence of inexpensive CPUs also contributes
We end up with a centralized computing operation accessible from nearly anywhere
Known as Application Service Providers
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8. Evolution
The last additions to SaaS was the standardized highly configurable applications:
ERPs
CRMs
The price tag on these exceeds that which a small business may afford
Thus the ASP buys the software and sells a piece of it to the smaller businesses
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9. SaaS
Often uses single instance and single configuration of the software in question
This is the multitenant architecture
This version is installed on multiple systems
One set of CPUs in a server farm
Known as horizontal scaling
Virtualization may be used instead of the multitenant approach to provide for differing clients
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10. License and Fees Traditional software
An initial fee for a perpetual license
May have additional upgrade or maintenance fees
SaaS providers are paying this fee
They charge their clients:
A monthly or annual subscription fee
There may also be usage charges:
Per transaction, per CPUs required, etc
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11. Horizontal or Vertical
Vertical SaaS deals with needs of a single industry
Eg. finance or healthcare or only
Horizontal SaaS deals with a category of software, which may exist over several industries
Marketing or HR
These are largely the same regardless of industry
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12. Customization
Different industries may desire different customizations of the configurable software
This does not complicate the vendor’s life that much
As long as everyone in that industry gets the same copy in the multitenant model
The proliferation of the configurations reverts us back to the more expensive virtualization type
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13. Advantages
The smaller business can gain a working application very rapidly without a substantial up-front investment
The SaaS vendor has already solved the serious technical problems and are the ideal solution for startup problems
If after growth the subscription costs become too high they may then buy the package for themselves
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14. Advantages II Even for the larger company there are some advantages
The vendor is an extension of the IT staff and infrastructure
Updates are done once by vendor
They have a larger group of customers which help analytics
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15. Disadvantages Customer data is stored in a remote location
The security of this data there and in transit is in question
If the vendor fails, what will be done?
The customer cannot verify how the software works
Upgrades will come when vendor installs, not when the client is ready
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16. Disadvantages II
The multitenant model may inhibit large enterprises from changing their processes
There will be some latency – not suitable for real-time applications
Changing vendors requires the transfer of perhaps large amounts of data over internet
Search laws do not protect storage of third party data as well
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17. Access
This type of system is typically accessed by a Javascript enabled browser
This is used for the day to day data entry and report generation
This can allow file transfers on occasion
Small printed items may be done locally
Larger shipped from the vendor
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18. Integration Generally SaaS has no direct access to client systems
Some do offer integration protocols
These are usually web services
This may give some communication between the SaaS data and the internal system data, in either direction
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19. Data Escrow Keep a copy of the critical data with a third party
Reason for this approach:
Vendor going out of business
Service outages
Data loss due to corruption
Data escrow protects the client from also suffering serious loss
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20. Software as a Service Many variations DataBase as a Service (DBaaS)
Desktop as a Service
Storage as a Service
Logging as a Service
Among others
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21. Finally Salesforce is a prominent SaaS in CRM
There are many others, eg. Oracle, SAP, Microsoft
The expected future is that SaaS will increase in importance
This model provides both advantages and disadvantages to its customers
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