SaaS (Software as a Service) had nearly lost the battle during the dotcom bubble in 2001. While the concept was new and actually changed the current perception of IT deployments and deployment, the expectations were simply too much. The dotcom bubble destroyed SaaS but it has managed to regain its stature and identity ever since.
The concept of subscription based software development took the world by storm as it fostered hosted delivery and reduced infrastructure overhead for different small and medium sized businesses. But not many were able to make use of the concept as internet bandwidth was not up to the task for successful SaaS delivery. Also, some software vendors were not interested in adjusting their pricing models, as a full pay-up-front approach suited them better. Subscription-based software licenses were based on deferred revenue collection, and it took a few years for vendors to switch to a SaaS pricing model.
The big players in the field of software development, such as Microsoft, Oracle, and SAP, initially ignored and ridiculed the subscription-based approach. But even they had to meet the changing demands of the market. The recent recession further reduced the pockets of all companies, forcing them to go SaaS mode of software licences.
Why are companies interested in opting for a SaaS subscription model?
Companies are more interested in 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 companies that are trying to move their hardware and software maintenance costs towards SaaS. The subscription licensing model, as noted by analysts, is a lucrative and cost-effective alternative with a monthly or quarterly fee that makes things easier for businesses. Also, there are no overheads related to software and hardware, which also makes it easier for small businesses.
With a low initial cost, subscription-based software development and deployment can help companies develop newer applications without breaking the bank. There are many companies today that have offered services based on SaaS. SaaS and cloud computing technology adoption is done by more than 11% of US government agencies, according to a recent survey. The percentage of users who opt for the SaaS pricing model is expected to triple in the next year or so.
Most implementations continue to focus on different individual departmental initiatives. Providers offer various features for the end-to-end processes of their end customers. Microsoft Azure and Amazon services are some examples of SaaS and cloud computing done right. Businesses need to choose the right implementation provider before finalizing with a service provider. The SaaS application development provider should have experience in handling data security and scalability. Simplified deployment and deployment are critical to the success of the client business. Today, almost all software development providers offer SaaS services with the successful “pay as you go” subscription license model. Amazon, eBay and other companies have managed to keep people’s trust in doing business online. The hesitation of dealing with online stores has been greatly reduced.