SaaS (Software as a Service) had almost lost the battle during the dotcom bubble in 2001. While the concept was new and actually shifted the then present perception of IT implementations and deployment, the expectations were simply just too much. The dotcom bubble destroyed SaaS but it managed to regain its stature and identity since then.
The concept of subscription-based software development took the world by the storm since it encouraged hosted delivery and reduced the infrastructure overheads for different small and mid-sized companies. But not many could make use of the concept since the Internet bandwidth was not up to the mark for the success of SaaS delivery. Additionally, some software vendors were not keen on adjusting their pricing models since an all-money-up-front approach suited them the best. Subscription-based software licensing was based on deferred revenue collection and it took some years for vendors to switch to a SaaS pricing model.
The big players in the software development arena like Microsoft, Oracle and SAP had at first ignored and ridiculed the subscription-based approach. But even they had to comply with the changing demands of the market. The recent recession further narrowed every company's pockets which forced them to opt for the SaaS model of software licensing.
Why are companies keen on opting for a SaaS subscription model?
Companies are keener about implementing a SaaS subscription-based software development model as they have to make changes to their plans due to increasing IT budget constraints. There are many enterprises that are trying to make their hardware and software maintenance expenses towards SaaS. The subscription-based licensing model as observed by analysts is a lucrative and cost-efficient alternative with a monthly or quarterly fee which makes it easier for companies. Moreover, there are no overheads related to software and hardware, which makes it easier for small companies too.
With a low upfront cost, subscription-based software development and deployment can help companies to develop newer applications without having to invest much. There are many companies nowadays who have offered SaaS based services. Adoption of SaaS and cloud computing technology is done by more than 11% of US government agencies, according to a recent survey. The percentage of those users who are opting for the SaaS pricing model is expected to treble in the next year or so.
Most of the deployments continue to center around different individual departmental initiatives. Vendors are providing diverse features for their end client's end-to-end processes. Microsoft Azure and Amazon's services are some examples of SaaS and cloud computing done right. It is necessary for companies to opt for the right implementation provider before finalizing on a service provider. The SaaS application development provider needs to be experienced in handling data security and scalability. Simplified deployment and implementation is crucial to the success of the client company. Nowadays, nearly every software development provider delivers SaaS services with the successful "pay as you go" subscription licensing model. Amazon, eBay and other companies have managed to hold on to people's faith about doing business online. The hesitance of dealing with online stores has gone down considerably.