The initial mode of distribution for software applications was geared towards the single purchase of the software by customers whom would maintain it on-premise. The developer(s) created the software and sold it to customers and/or distributors whom would then sell it to end users. If the developer(s) fixed issues and/or added new features, then the user had to purchase the newer version of the software. Today, businesses are aiming towards technological solutions that are budget-friendly, scalable, flexible, and readily accessible. According to Tech Target, "Software as a service is a software distribution model in which a third-party provider hosts applications and makes them available to customers over the internet." Customers or end users will gain access to the software application through the form of a paid subscription which eliminates the need to run applications in their own data centers or on their own computers. Cloud computing has three main main categories which are software as a servic (SaaS), platform as a service (PaaS), and infrastructure as a service (IaaS). In terms of economic feasibility, a SaaS-based cloud solution should always be considered while conducting an analysis. According to The SaaS Report, industry research shows the total cost of ownership for an on-premise system will be more than double that of a SaaS-based cloud solution. This is compiled from the cost of over 4 years for 100 users. The average on-premise total cost of ownership was $1,400,570 compared to $697,656 for a cloud-based solution. The software as a service market segment of the cloud computing market has seen extreme growth over the years. In 2008, the market was worth 5.56 billion U.S. dollars worldwide. Ten years later, in 2018, the market is predicted to be worth around 116.39 billion U.S. dollars worldwide. Although growth has slowed since its inception, the market is expected to see more growth in the upcoming years. In 2020, the market is predicted to be worth 136 billion U.S. dollars worldwide. That growth is due to the convenience and scalability of this software distribution model being appealing to investors. According to The SaaS Report, "helping to fuel the industry's growth is a wide range of investors including venture capital, growth equity, private equity, asset managers, hedge funds as well as individual investors among others."
According to ZDNet.com, "The SaaS segment holds nearly 69 percent of overall public cloud market share, but its year-over-year growth rate of 22.9 percent is the slowest of three primary segments." In 2017, Forbes listed Microsoft, Amazon, and IBM as the top three overall cloud computing companies in the market. However, in the software as a service segment, the top three companies are Salesforce, Workday, and ServiceNow. Salesforce, a provider of customer relations management tools to businesses, has a market cap of $69 billion USD since its initial product offering in 2004. Workday, a provider of financial and human capital management solutions to businesses, has a market cap of$22 billion USD since its initial product offering in 2012. ServiceNow, a provider of IT management solutions to businesses, has a market cap of $20 billion USD since its initial product offering in 2012. I would like to note that Microsoft is growing fast in this market since ots release of Office 365, a part of their "commercial cloud." Microsoft's Commercial Cloud recently passed the $20 billion USD milestone, but it is not purely software as a service. Adobe is also growing fast in this market with their creation of Adobe Creative Cloud which includes graphics design, video editing, and more.
Everything in life has a benefit and a concern or risk. This is especially true for technological solutions. The benefits to implementing a SaaS solution are cost savings, scalability, accessibility, upgradeability, and resilience. The SaaS associated risks have yet to be completely mitigated and are reasons why many individuals and/or businesses have yet to fully convert. The risks or cons associated with implementing a SaaS solution are security, outages, compliance, performance, data mobility, and integration. Cost savings come from no longer having the expense of an on-premise infrastructure solution which requires installing, upgrading, and maintaining. Scalability is very import because to any business because as the business needs and functionalities grow, the involved technology must grow as well. On-premise technology may involve purchasing more software and hardware. In contrast, a SaaS-based cloud solution would only require the business to upgrade their subscriptions. Accessibility comes in the form of the ability to access the internet. A browser and an internet connection are necessary for any SaaS application. This can easily be made available on a large variety of devices and desktops. Upgradeability is easier because updates are handled by the cloud service provider. This significantly reduces the workload on an organization's IT department and allows them to allocate those resources elsewhere. Resilience is a benefit because the data and infrastructure are stored off-site. If some sort of disaster were to affect the physical location of the business, then all you need is a computer or device with an internet connection to resume business activities. The major reason why some are hesitant to implement a SaaS solution is because of security concerns. Businesses aren't completely comfortable with data being stored off-premise. They want to ensure that only qualified and highly identified individuals are accessing the data and business processes through the entrusted third party. Outages range from human error to acts of God and are not always avoidable. This poses a concern because down time is both crucial and irritating for any business especially if it's for a long duration. It's wise to analyze the cloud service provider's history of outages and service level agreements in order to make a more informed decision on which provider youwould like to pursue. Performance is based on the user's internet connectivity. Applications hosted in a remote data center and accessed through the internet are a concern for businesses. If the connection is slow, thwn applications may not run as efficient as an application that is stored on a local computer and/or accessed through a local area network. Data mobility is important in the event of needing to change cloud service providers or if your cloud service provider goes under. There are may startups that often go under in this market. To mitigate this risk, the business must carefully plan an exit strategy to maintain its valuable data and business processes. Integration is a concern because businesses often use, or would like to use, many SaaS applications in combination with on-premise software and hardware. There are integration as a service solutions such as Boomi, CloudSwitch, and Informatica that aim to help mitigate this risk
No lines are longer than 80 characters, TYVM. Other specified properties aren't being scored automatically at this time so this is not necessarily good news...