Around two decades ago, our mantra was to buy first, then build. At that time there were so many custom application developments happening in the industry with very few COTS (Commercial off-the-shelf) products. Many of the big corporations wasted precious time and resources to build big ambitious projects which then got outdated even before they were released.
In the 1990s, companies started hosted applications with a single licensing structure. Typically, these companies were called Application Service Providers (ASP). Unfortunately, ASPs failed to deliver on the promise of low cost, painless upgrades, and easy deployment. This was mainly due to the technical approach of having multiple infrastructure instances and code base for each account or client. In addition to this, the licensing structure was not very flexible and attractive for any growing business.
SaaS (Software as a Service) providers quickly learned from this failure and designed a better software delivery design. Most of these products have very good architecture and design to isolate the network, infrastructure, and data from each tenant while being supported from a single application code version.
Salesforce.com was founded in 1999, but it got real traction after 2001. Salesforce was one of the very few companies that started a subscription-based software renting early on in the CRM (Customer Relationship Management) market space.
Innovation – SaaS platform is continuously innovating and improving. Customers will get the best of the breed solution in the market at any given time. These platforms are evolving continuously as par with the advancement in technology.
Agility – Ability to change things faster than any other alternative such as managed application, COTS, or custom application development. Business is always evolving and the supporting technology needs to keep up with the pace so that the business can succeed in the market. A SaaS solution can easily be changed and replaced.
Cost – A subscription-based model is very attractive to companies. This model has the lowest TCO (Total Cost of Ownership) with a relatively quick ROI (Return on Investment).
Application Management – Software upgrades and deployment are all taken care of by the providers without any impact to the business. Most of the SaaS providers promise very high SLA (Service Level Agreements) for their offerings.
Why should you invest in a SaaS solution? There are some key advantage for SaaS based solutions.
Lack of analysis and vision in leadership are resulting in custom development in some of the organizations both big and small even today. These organizations will have enormous disadvantages in the market due to lack of agility and cost overrun. The administrative costs will have a direct impact on customer acquisition and retention.
Why should you reinvent the wheel again?