I thought that the inaugural blog entry for the SaaSCamp site should probably include a definition of what SaaS, or Software-as-a-Service actually is. This is because after working with a couple of dozen service providers (e.g. Telcos, Web Hosters, etc) and ISVs who are offering or wanting to offer SaaS services, I've found a wide range of opinions about what the definition of SaaS should be.
Software-as-a-Service today can be defined as including both Hosted Applications as well as Software-on-Demand. The spectrum begins with Hosted Applications designed for a one-to-one delivery model on one end, and On-Demand applications designed for a one-to-many delivery model on the other.
One trend of Hosted Applications, as opposed to Software-on-Demand, is that Hosted Applications are frequently developed by an ISV, and then subsequently hosted by a 3rd party service provider who offers the application as a service to their customers. Software-on-Demand applications are frequently offered directly by the company that created and owns the software intellectual property. It is important to note however that the source of the intellectual property (i.e. the software package/product) is not a determining factor for whether the service that derives from that software should be considered Software-on-Demand or not.
Source: Amy Konary, IDC Directions, 2006
The key factors for determining whether the service being offered should be considered Hosted Application Management or Software-on-Demand are:
· Whether the application is built for one-to-many delivery over the web. Is the application “multi-tenant”? Does a single instance of the application (including web servers, application servers, and a database) support more than one customer?
· The application is not deployed in-house or on-premise at the customer’s location.
· The application is consumed over the public Internet
· The application supports little, or mass customization through customization features that are built-in to the application.
· The pricing model is subscription based (e.g. monthly, per user subscription fees)
Another key trend to understand is that more and more software vendors are focusing primarily on the development of Software-on-Demand applications. Over time, the term Software-as-a-Service will come to refer almost exclusively to Software-on-Demand. In fact, many already believe that the term Software-as-a-Service should apply only to Software-on-Demand.
One thing is clear -- this is an evolutionary process. While we can try to label or define SaaS and what it means today, this train is going to go where the market takes it, and none of us are prescient enough to know exactly what the SaaS model will evolve into 10+ years from now!