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With growth rates of over 20% per year, SaaS (Software-as-a-Service) has become a very viable model in the enterprise applications market. IT managers must have a clear understanding of the benefits, limitations, and costs associated with this model before using it.
SaaS, also called software on-demand or subscription-based software, is a delivery model that is disrupting the IT industry. In the traditional on-premise or software license delivery model, enterprises purchase an application and build the proper infrastructure to host it in-house. With SaaS, enterprises pay a monthly per-user fee to rent an application from the vendor that hosts it. SaaS eliminates the need for companies to perform installations, maintenance, and support. The vendor is responsible for all of these tasks.