Acronym of the moment: SaaS Jason 30 Nov 2005

12 comments Latest by Trip Foster

I heard this one from five different sources this week: SaaS. Software as a Service. Coming soon to a press release near you. With Microsoft getting SaaSy, this one has the mainstream energy to overtake AJAX in the next few months.

12 comments so far (Jump to latest)

Matt Turner 30 Nov 05

Hardly rolls off the tongue does it. And how do you pronounce it? Like ‘sass’ or ‘sars’.. neither too good!

Chris 30 Nov 05

It means “Soup and a Sandwich”

it’s on lots of menus.

and no I’m not jocking, it really is.

Scott 30 Nov 05

Come on now… What five sources? And what do you mean by “overtake?” Is this a new framework? Model? A new protocol?

Scott 30 Nov 05

Come on now… What five sources? And what do you mean by “overtake?” Is this a new framework? A new protocol? Or just a new buzzword for something that’s been aroudn for ever?

Anonymous Coward 30 Nov 05

Doesn’t the ASP acronym work anymore?

dusoft 30 Nov 05

No, they changed it to .net (DOT NET) a while ago.

Morten 30 Nov 05

SaaS is basically ASP rebranded. Businesses are getting better at describing IT service expectations using SLAs. This is how they interact with IT service providers, for eg. outsourced mail or possibly even their own internal IT support organisation.

Thus the concept of “Software as a Service” is not foreign to business execs in the way the ASP concept is. It’s not something new and revolutionary, but it’s a handy term that helps bridge software and business lingo.

Jared White 30 Nov 05

Software as a Service, as I wrote on my blog previously, is a good business model in some cases, but sometimes it is actually more costly than a pay-once-you-own-it model. I think the trick is finding the right price point — one that seems very low yet in the long run makes good money for the developer.

Certainly, the hosted software service market is booming, as you folks have obviously demonstrated. I wonder how well that concept will translate to “non-Web” software….

next dinosaur 30 Nov 05

does the term “managed or hosted service” describe an SaaS as well? also, in the SaaS pricing, is the software access priced separately from the hosting/backup etc?

Brian Lyttle 30 Nov 05

Software as a Service is not a new concept or term. There is a lot of serious research material on the subject. See My undergraduate dissertation was supervised by members of that academic group.

SaaS is the academic terminology for SOA, which is in turn the use of web services to loosely couple components and applications. SOA was slow to take off since the vendors - Microsoft, IBM, BEA etc forgot to include some useful things like security before releasing the first round of tools. Marketing want to use a new term for future releases to distinguish themselves from previous efforts.

The problem with all this is that SaaS is an abstract software research term that involves until now, theoretical items such as software agents through to orchestration (BPELWS/BizTalk).

Most of this is beyond the comprehension of many Web developers and designers, since it’s operating system level complexity with associated power at the Internet level. Microsoft just make tools, like Indigo (Windows Communication Foundation) that make this stuff usable for normal people.

That said, I think a lot of this stuff is looking for an application, rather than solving the problems that 80% of people experience. Most people can get by integrating apps with some simple XML over HTTP.

Christopher Fahey 30 Nov 05

Like ‘sass’ or ‘sars’..

I love British phonetic spelling! See, you put an R in that word to indicate the possibility that the word might be pronounced with a “long a” sound, as if the R itself didn’t have a sound (which of course, to the modern Brit, it does not). This is the kind of stuff that makes my UK-published English/German language book tell me to pronounce “bitte” like “bitter”, the kind of thing that makes unsuspecting Americans look (even more) like fools when they travel in Europe.

Of course, someday soon you Brits will totally lose that pair of T’s too.

Trip Foster 01 Dec 05

FYI: SAAS, or SAS has been around for a LONG time. Several analysts were talking about SAS or On Demand Software in 2001. (Disclosure: I used to run the marketing for a SAS firm) SFDC, RNOW, Intellibank, and Netsuite (then called NetLedger) being the pioneers of the pure plays.

As mentioned in the above post, the On Demand (or SAS) market developed as firms realized that there was some good thinking in the ‘ASP’ model but the cost structure of purposing someone else’s enterprise software to a group of smaller firms (who wouldnt normally be able to afford that enterprise software) ended up being too costly for those smaller businesses after about three years (and it didnt scale or perform well over the web). Hence, the SAS firms mentioned above created software platforms that were native to the web, so they would perform better than an ASP and could be offered cheaper to even (more) smaller firms.
This model was true ‘Nirvana’ for software firms because it proved a profitable way to offer and disseminate high end software to SMBs everywhere using a highly transactional marketing and sales model (this is primarily true for pure play On Demand/SAS provides only).
So now SMB firms have access to great enterprise-class software for ~$30/month, allowing them to focus on thier core competencies rather than deploying the tools they need to compete.
Yet, once these firms grow, statistics show that they eventually switch to the old ‘command and control” regime of systems run in house — after several years (7+) the On Demand cost model beaks down and it makes more sense to buy.
THE BOTTOM LINE: The key to SAS/On Demand/Web 2.0 firms long term success is innovation. Offer the customer enough compelling new ‘functionality’ (sorry for the y 2000 terminology) in relatively rapid cycles and you will convince them that SAS is a better model.

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