The SAAS Garden Isn’t All Rosy

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The SAAS Garden Isn’t All Rosy

Author: Chris Daly
Published: August 22, 2010 at 7:59 pm

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One of the new business models that’s been riding on the crest of web 2.0, Software As A Service (SAAS), has meant that organizations of all sizes can leverage a software platform and release online products and services without major up front investment.

This is good in the short term, but as Alex Handy argues in Software Development Times this may not be a panacea for all organizations. He quotes Forrester Research as saying that they have observed concerns about prices and costs of the SAAS Model in that they will only go one way, which is up.

Prices can also go the same way in the more traditional “Platform as service” model though, in the SAAS model you are only renting it, so the organization has no control over the application. As a counter weight to this, it is argued that in the traditional model, software providers such as Oracle do not out punch the SAAS opponent here. They may annually increase their support fees even for legacy applications, regardless of whether the client’s product ceases to be supported as part of any new product release.

A variation on a straight SAAS model is where the software is open source and there are no license costs. The client can then pay for support or consultancy as and when appropriate, or upgrade without cost. This enables a company to take the opportunity of the skillset in house and develop their application while harnessing external expertise. This leverages a key component of web 2.0 where a range of modular applications can be bolted together using a variety of architectural frameworks from SOA to REST.

Of course the major players are not resting on their laurels and in the short to medium term at least, are providing both. Oracle now offers the SAAS model as well as, enabling customers to purchase the traditional platform.

Both the traditional and SAAS models offer the software provider the opportunity to sell training, consultancy and support so there will still be healthy revenues for the successful provider. In the longer term the modular nature of web 2.0 and beyond means that SAAS will eventually triumph, even where there is a requirement for software installation, this would all be done remotely using HTTP or HTTPS where required.

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