Software as a Service (SaaS) is fast emerging as a powerful new business model based on a way of delivering applications as a service. Rather than having to install and maintain software you simply access the SaaS service via the internet eliminating the need to buy hardware or software, requiring just an internet connection for access.  SaaS delivers substantial benefits over the traditional software model by more closely aligning costs with value delivered and removing the traditional IT bottlenecks which can delay a new software implementation.

SaaS applications (also known as web-based applications, on-demand applications or hosted applications) are most commonly offered on a usage base, typically consisting of rental (or subscription) fees and usage (per user and/or per transaction) fees. But SaaS is much more than just a different pricing model, and is substantially different from third-party hosting of a traditional software solution.

A SaaS solution uses a central hosted infrastructure to deliver a consistent service to multiple customers typically on a global basis. Key characteristics of a true SaaS service would include:

• Multitenant Architecture – all users and applications use a single common infrastructure and a common code-base which is centrally maintained by the SaaS provider.
• Rapid development and enhancement – the SaaS application is designed to be in production at all times, allowing enhancements to be deployed rapidly, without the need to install new releases from scratch. Because all customers are on the same code-base, SaaS suppliers can innovate more quickly and regularly deliver enhancements which are immediately available to all customers. This also eliminates the issue faced by traditional software vendors in the unproductive time needed to maintain multiple past versions and customer-specific implementations of the software.
• Configuration – customers are able to configure their use of the application without affecting the common infrastructure. SaaS applications are built to ensure that these configurations are unique to each customer and are preserved through each upgrade of the core SaaS solution
• Access – access to the service being available from any internet enabled workstation, ensuring global access to the same information
• Hosting and Operations – purpose built to enable delivery of the SaaS solution on an enterprise scale and to meet SAS 70 Type II and other compliance and security standards
  • Security and segregation of all data
  • Multi-tenant infrastructure
  • High performance
  • Massive Scalability
  • Disaster Recovery Plan
  • High Availability

As more and more enterprise SaaS solutions become available, the traditional focus by an enterprise to control its own IT infrastructure and data is being supplanted by the view that purpose-built SaaS solutions and SaaS infrastructure provide the promise of even greater levels of security, availability, scalability and risk management as well, of course, as being significantly more cost effective and providing faster time to value.