SaaS 101: What Managers Need to Know

Software as a service has plenty of upsides, but it also has potential problems. Here’s an overview to help you get started with SaaS.
Posted February 15, 2007

Frank Guerino

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Software as a service (SaaS) is simply the ability to offer access to live and running software through the Internet. According to research firms like Gartner and Forrester, SaaS is one of the fastest growing segments in the IT sector. Adherents claim it provides a far more cost-effective alternative for enterprises to achieve their business objectives than can be achieved with traditionally-packaged software applications.

In order for software to be offered through the web to consumers, the software must exhibit certain Web 2.0 “traits.” These traits are best described in an article called What is Web 2.0? The article summarizes Web 2.0 as containing the following seven traits:

1) Using the Web as a backbone infrastructure for enterprise class solutions.

2) Static publishing and page views by individuals is replaced with dynamic publishing and collaboration by groups.

3) The harnessing of collective intelligence through collaborative solutions.

4) The elimination of traditional HTML with dynamic web pages and dynamic links that can render on-demand content.

5) The replacement of static content with transactional databases.

6) The elimination of traditional software development, deployment, and maintenance with managed solutions.

7) Far richer user experiences.

In essence, SaaS uses Web 2.0 traits to help eliminate the need for your enterprise to implement, provision for, deploy, host, manage, and support its own software. End users use their browsers to connect to live infrastructure that is provisioned and supported by a dedicated service provider who focuses on nothing but that domain 24x7.

While SaaS is relatively new, it’s not something that popped up overnight. SaaS providers have comfortably been around since transaction based processing has been available on the Internet and SaaS, as a paradigm, represents a more refined form of a managed service.

For instance, highly established SaaS providers include but are not limited to:

• Yahoo
• Google
• Ebay
• Amazon
• CollabNet
• Business Engine Networks (BEN)

Note that the types of SaaS solutions that your enterprise will most likely leverage are those that directly solve internal business needs, most commonly those related to business processes.

So, for example, the primary offerings associated with providers such as Yahoo, Google, Ebay, and Amazon are typically not the types of SaaS solutions that most enterprises would leverage, internally, to address common business problems – they tend to target the needs of consumers more than those of an enterprise.

However, solutions like, CollabNet, and BEN are specifically constructed to help address common enterprise business problems. For example, a solution like Salesforce will allow you to put a solution in place for Customer Relationship Management.

In addition to the plethora of SaaS blogs that are now available on the Internet, you can also find SaaS providers and information through established internet directories, such as ASPStreet and the SaaS Showplace.

Frank Guerino is the founder and CEO of TraverseIT, a SaaS-based provider of IT Operations and Information Management Solutions designed to help IT organizations manage themselves more effectively.

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