Tuesday, February 15, 2011
Friday, February 4, 2011
Application service provider
An application service provider (ASP) is a business that provides computer-based services to customers over a network. Software offered using an ASP model is also sometimes called On-demand software or software as a service (SaaS). The most limited sense of this business is that of providing access to a particular application program (such as customer relationship management) using a standard protocol such as HTTP.
The need for ASPs has evolved from the increasing costs of specialized software that have far exceeded the price range of small to medium sized businesses. As well, the growing complexities of software have led to huge costs in distributing the software to end-users. Through ASPs, the complexities and costs of such software can be cut down. In addition, the issues of upgrading have been eliminated from the end-firm by placing the onus on the ASP to maintain up-to-date services, 24 x 7 technical support, physical and electronic security and in-built support for business continuity and flexible working.
The importance of this marketplace is reflected by its size. As of early 2003, estimates of the United States market range from 1.5 to 4 billion dollars. Clients for ASP services include businesses, government organizations, non-profits, and membership organizations.
The need for ASPs has evolved from the increasing costs of specialized software that have far exceeded the price range of small to medium sized businesses. As well, the growing complexities of software have led to huge costs in distributing the software to end-users. Through ASPs, the complexities and costs of such software can be cut down. In addition, the issues of upgrading have been eliminated from the end-firm by placing the onus on the ASP to maintain up-to-date services, 24 x 7 technical support, physical and electronic security and in-built support for business continuity and flexible working.
The importance of this marketplace is reflected by its size. As of early 2003, estimates of the United States market range from 1.5 to 4 billion dollars. Clients for ASP services include businesses, government organizations, non-profits, and membership organizations.
Software User satisfaction
Gartner's 2008 survey of 333 enterprises in the US and UK found a low level of approval from customers, describing overall satisfaction levels as "lukewarm." Respondents who decided against SaaS cited high service cost, integration difficulty, and technical requirements.A recent report from Forrester, “The ROI of Software-As-A-Service,” examined a range of companies that chose SaaS solutions and found that SaaS does result in long-term value. Companies interviewed for the report cited several reasons for their ROI of SaaS:
Rapid deployment
Increased user adoption
Reduced support needs
Lower implementation and upgrade costs
Rapid deployment
Increased user adoption
Reduced support needs
Lower implementation and upgrade costs
Adoption
Drivers
A traditional rationale for outsourcing IT systems involves applying economies of scale to application operation, i.e., an outside service provider can offer better, cheaper, more reliable applications. SaaS-based application use has grown dramatically. A Gartner survey in July 2009 found that customers are "somewhat satisfied". Several important changes to the way people work have facilitated this rapid acceptance:
Fast, low-cost broadband is available.
Computers have become widespread—most information workers have at least basic computer skills.
Computing has become a commodity. In the past, corporate mainframes were jealously guarded as strategic advantages. More recently, applications were viewed as strategic. Today, people know it’s the business processes and the data itself (customer records, workflows, pricing information) that matters. Computing and application licenses are cost centers, and as such, they’re suitable for cost reduction and outsourcing. The adoption of SaaS could also drive Internet-scale to become a commodity.
Insourcing IT systems requires expensive overhead including salaries, health care, liability, and physical building space.
Applications have tended to standardize. With notable, industry-specific exceptions, most people spend most of their time using standardized applications.[citation needed] An expense-reporting page, an applicant screening tool, a spreadsheet, or an e-mail system are all sufficiently ubiquitous and well understood that most users can switch from one system to another easily. This is evident from the number of web-based calendaring, spreadsheet, and e-mail systems that have emerged in recent years.
Parametric applications are usable. In older applications, one could often only change a workflow by modifying the code. In more recent applications, particularly web-based ones, significantly new applications can be created from parameters and macros. This allows organizations to create different kinds of business logic on a common application platform. Many SaaS providers allow a wide range of customization within a basic set of functions.
A specialized software provider can target global markets. A company that made software for human resource management at boutique hotels might once have had a hard time finding enough of a market to sell its applications. But a hosted application can instantly reach the entire market, making specialization within a vertical market not only possible, but preferable. This in turn means SaaS providers can often deliver products that meet specific market needs better than traditional "shrinkwrap" applications.
Web systems demonstrate reliability. Despite sporadic outages and slow-downs, most people are willing to use the public Internet, the Hypertext Transfer Protocol and the TCP/IP stack to deliver business functions to end users.
Security is sufficiently well trusted and transparent. With the broad adoption of SSL, organizations have a way of reaching their applications without the complexity and burden of end-user configurations or VPNs.
Enablement technology (tools, libraries, etc,) is available. According to IDC, organizations developing enablement technology that allow other vendors to quickly build SaaS applications will play an important role in driving the adoption of SaaS. Because of SaaS' relative infancy, many companies have either built enablement tools or platforms or are in the process of engineering enablement tools or platforms. A Saugatuck study shows the industry will most likely converge to three or four enablers that will act as SaaS Integration Platforms (SIPs).
Wide-area network bandwidth has grown drastically, following Moore's Law (more than 100% increase each 24 months), and is about to reach slow local networks bandwidths. Added to network quality improvement, this has driven people and companies to trustfully access remote locations and applications with low latencies and acceptable speeds.
SaaS has "democratized" software, allowing small and medium businesses to access functionality formerly the domain of large enterprises. Many analytical software tools have been released as SaaS applications on a monthly subscription basis.
SaaS facilitates data aggregation. Instead of collecting data from multiple data sources with different database schemas, all data for all customers is stored in a single database schema (i.e., multi-tenant). This simplifies running queries across customers, mining data, and looking for trends.
The rise of third-party SaaS data escrow services has reduced some security concerns by allowing application data to be held with an independent third party.
A traditional rationale for outsourcing IT systems involves applying economies of scale to application operation, i.e., an outside service provider can offer better, cheaper, more reliable applications. SaaS-based application use has grown dramatically. A Gartner survey in July 2009 found that customers are "somewhat satisfied". Several important changes to the way people work have facilitated this rapid acceptance:
Fast, low-cost broadband is available.
Computers have become widespread—most information workers have at least basic computer skills.
Computing has become a commodity. In the past, corporate mainframes were jealously guarded as strategic advantages. More recently, applications were viewed as strategic. Today, people know it’s the business processes and the data itself (customer records, workflows, pricing information) that matters. Computing and application licenses are cost centers, and as such, they’re suitable for cost reduction and outsourcing. The adoption of SaaS could also drive Internet-scale to become a commodity.
Insourcing IT systems requires expensive overhead including salaries, health care, liability, and physical building space.
Applications have tended to standardize. With notable, industry-specific exceptions, most people spend most of their time using standardized applications.[citation needed] An expense-reporting page, an applicant screening tool, a spreadsheet, or an e-mail system are all sufficiently ubiquitous and well understood that most users can switch from one system to another easily. This is evident from the number of web-based calendaring, spreadsheet, and e-mail systems that have emerged in recent years.
Parametric applications are usable. In older applications, one could often only change a workflow by modifying the code. In more recent applications, particularly web-based ones, significantly new applications can be created from parameters and macros. This allows organizations to create different kinds of business logic on a common application platform. Many SaaS providers allow a wide range of customization within a basic set of functions.
A specialized software provider can target global markets. A company that made software for human resource management at boutique hotels might once have had a hard time finding enough of a market to sell its applications. But a hosted application can instantly reach the entire market, making specialization within a vertical market not only possible, but preferable. This in turn means SaaS providers can often deliver products that meet specific market needs better than traditional "shrinkwrap" applications.
Web systems demonstrate reliability. Despite sporadic outages and slow-downs, most people are willing to use the public Internet, the Hypertext Transfer Protocol and the TCP/IP stack to deliver business functions to end users.
Security is sufficiently well trusted and transparent. With the broad adoption of SSL, organizations have a way of reaching their applications without the complexity and burden of end-user configurations or VPNs.
Enablement technology (tools, libraries, etc,) is available. According to IDC, organizations developing enablement technology that allow other vendors to quickly build SaaS applications will play an important role in driving the adoption of SaaS. Because of SaaS' relative infancy, many companies have either built enablement tools or platforms or are in the process of engineering enablement tools or platforms. A Saugatuck study shows the industry will most likely converge to three or four enablers that will act as SaaS Integration Platforms (SIPs).
Wide-area network bandwidth has grown drastically, following Moore's Law (more than 100% increase each 24 months), and is about to reach slow local networks bandwidths. Added to network quality improvement, this has driven people and companies to trustfully access remote locations and applications with low latencies and acceptable speeds.
SaaS has "democratized" software, allowing small and medium businesses to access functionality formerly the domain of large enterprises. Many analytical software tools have been released as SaaS applications on a monthly subscription basis.
SaaS facilitates data aggregation. Instead of collecting data from multiple data sources with different database schemas, all data for all customers is stored in a single database schema (i.e., multi-tenant). This simplifies running queries across customers, mining data, and looking for trends.
The rise of third-party SaaS data escrow services has reduced some security concerns by allowing application data to be held with an independent third party.
Implementation Of Softwares
One of the companies that sells that kind of service classifies SaaS into four "maturity levels," whose key attributes are configurability, multi-tenant efficiency, and scalability.Each level is distinguished from the previous one by the addition of one of those three attributes:
Level 1 - Ad-hoc/custom: Each customer has a customized version of the hosted application that runs as its own instance on the host's servers. Migrating a traditional non-networked or client–server application to this level of SaaS typically requires the least development effort, and reduces operating costs by consolidating server hardware and administration.
Level 2 - Configurable: This adds greater program flexibility through configurable metadata, so many customers use separate instances of the same application code. This lets the vendor meet different customer needs through detailed configuration options, while simplifying common code base maintenance and updating.
Level 3 - Configurable, multi-tenant-efficient: This adds multi-tenancy to the second level, so a single program instance serves all customers. This enables more efficient server resource use without apparent difference to the end user, but ultimately faces scalability limits.
Level 4 - Scalable, configurable, multi-tenant-efficient: The fourth and final SaaS maturity level adds scalability through a multitier architecture that supports a load-balanced farm of identical application instances that run on a variable number of servers. The provider can adjust system capacity to match demand by adding or removing servers without further altering the software architecture.
SaaS architectures may also use virtualization, either in addition to multi-tenancy, or in place of it. A principal virtualization benefit is that it can increase system capacity without additional programming. On the other hand, much programming may be required to construct a more efficient multi-tenant application. Combining multi-tenancy and virtualization provides still greater flexibility to tune the system for optimal performance. In addition to full operating system-level virtualization, other virtualization techniques applied to SaaS include application virtualization and virtual appliances.
SaaS application development may use various types of software components and frameworks. These tools can reduce time-to-market and the cost of converting a traditional on-premise software product or building and deploying a new SaaS solution. Examples include components for subscription management, grid computing software, web application frameworks, and complete SaaS platform products
Level 1 - Ad-hoc/custom: Each customer has a customized version of the hosted application that runs as its own instance on the host's servers. Migrating a traditional non-networked or client–server application to this level of SaaS typically requires the least development effort, and reduces operating costs by consolidating server hardware and administration.
Level 2 - Configurable: This adds greater program flexibility through configurable metadata, so many customers use separate instances of the same application code. This lets the vendor meet different customer needs through detailed configuration options, while simplifying common code base maintenance and updating.
Level 3 - Configurable, multi-tenant-efficient: This adds multi-tenancy to the second level, so a single program instance serves all customers. This enables more efficient server resource use without apparent difference to the end user, but ultimately faces scalability limits.
Level 4 - Scalable, configurable, multi-tenant-efficient: The fourth and final SaaS maturity level adds scalability through a multitier architecture that supports a load-balanced farm of identical application instances that run on a variable number of servers. The provider can adjust system capacity to match demand by adding or removing servers without further altering the software architecture.
SaaS architectures may also use virtualization, either in addition to multi-tenancy, or in place of it. A principal virtualization benefit is that it can increase system capacity without additional programming. On the other hand, much programming may be required to construct a more efficient multi-tenant application. Combining multi-tenancy and virtualization provides still greater flexibility to tune the system for optimal performance. In addition to full operating system-level virtualization, other virtualization techniques applied to SaaS include application virtualization and virtual appliances.
SaaS application development may use various types of software components and frameworks. These tools can reduce time-to-market and the cost of converting a traditional on-premise software product or building and deploying a new SaaS solution. Examples include components for subscription management, grid computing software, web application frameworks, and complete SaaS platform products
Benefits Of Softwares
Some of the claimed benefits for SaaS are:
Capital expenditure is reduced by not having to purchase servers or full copies of software. This is counterbalanced by the increased revenue cost of paying for the use of the SaaS
Faster implementation. In some cases the customer can deploy SaaS more quickly as no local installation is required.
Depending on the user, it may remove a non-core activity (deployment and support of the software and its associated infrastructure) freeing up time to focus on core business activities
Reduced need to predict scale of demand and infrastructure investment up front
Possible improvements to reliability if the SaaS provider's infrastructure is more redundant or has higher availability than the user would otherwise have
Capital expenditure is reduced by not having to purchase servers or full copies of software. This is counterbalanced by the increased revenue cost of paying for the use of the SaaS
Faster implementation. In some cases the customer can deploy SaaS more quickly as no local installation is required.
Depending on the user, it may remove a non-core activity (deployment and support of the software and its associated infrastructure) freeing up time to focus on core business activities
Reduced need to predict scale of demand and infrastructure investment up front
Possible improvements to reliability if the SaaS provider's infrastructure is more redundant or has higher availability than the user would otherwise have
Key characteristics
SaaS characteristics include:
Network-based access to, and management of, commercially available software
Activities managed from central locations rather than at each customer's site, enabling customers to access applications remotely via the Web
Application delivery typically closer to a one-to-many model (single instance, multi-tenant architecture) than to a one-to-one model, including architecture, pricing, partnering, and management characteristics
Centralized feature updating, which obviates the need for end-users to download patches and upgrades.
Frequent integration into a larger network of communicating software—either as part of a mashup or a plugin to a platform as a service
(Service oriented architecture is naturally more complex than traditional models of software deployment.)
SaaS providers generally price applications on a per-user basis and/or per business basis, sometimes with a relatively small minimum number of users and often with additional fees for extra bandwidth and storage. SaaS revenue streams to the vendor are therefore lower initially than traditional software license fees, but are also recurring, and therefore viewed as more predictable, much like maintenance fees for licensed software.
Some SaaS applications are free to the user, with revenue being derived from alternate sources such as advertising, or upgrade fees for enhanced functionality (often referred to as "freemium"). Examples of free SaaS applications include large players such as Gmail and Google Docs, as well as smaller providers like Wave Accounting (free accounting) and Freshbooks (freemium time tracking and invoicing).
In addition to characteristics mentioned above, SaaS sometimes provides:
More feature requests from users, since there is frequently no marginal cost for requesting new features[citation needed]
Faster new feature releases, since the entire community of users benefits[citation needed]
Embodiment of recognized best practices, since the user community drives the software publisher to support best practice
Network-based access to, and management of, commercially available software
Activities managed from central locations rather than at each customer's site, enabling customers to access applications remotely via the Web
Application delivery typically closer to a one-to-many model (single instance, multi-tenant architecture) than to a one-to-one model, including architecture, pricing, partnering, and management characteristics
Centralized feature updating, which obviates the need for end-users to download patches and upgrades.
Frequent integration into a larger network of communicating software—either as part of a mashup or a plugin to a platform as a service
(Service oriented architecture is naturally more complex than traditional models of software deployment.)
SaaS providers generally price applications on a per-user basis and/or per business basis, sometimes with a relatively small minimum number of users and often with additional fees for extra bandwidth and storage. SaaS revenue streams to the vendor are therefore lower initially than traditional software license fees, but are also recurring, and therefore viewed as more predictable, much like maintenance fees for licensed software.
Some SaaS applications are free to the user, with revenue being derived from alternate sources such as advertising, or upgrade fees for enhanced functionality (often referred to as "freemium"). Examples of free SaaS applications include large players such as Gmail and Google Docs, as well as smaller providers like Wave Accounting (free accounting) and Freshbooks (freemium time tracking and invoicing).
In addition to characteristics mentioned above, SaaS sometimes provides:
More feature requests from users, since there is frequently no marginal cost for requesting new features[citation needed]
Faster new feature releases, since the entire community of users benefits[citation needed]
Embodiment of recognized best practices, since the user community drives the software publisher to support best practice
Philosophy
Software and business professionals generally associate the term SaaS with business software, and as a possibly lower-cost way for businesses to use software as needed rather than license every application on every device. With a well-designed implementation and properly priced licenses, on-demand SaaS provides license benefits without the associated complexity and the potential high cost to equip devices with applications they may not need.
Though many Unix applications already work using the SaaS model, EULA applications did not have this flexibility before SaaS. A licensed copy of a word processor, for example, had to reside on each machine in order to create a document on that machine. The equipped program has no intrinsic value loaded on a computer that is turned off for the night. The same employee would need another fully paid license to write or edit a report at home on their own computer, while the work license is inoperative
Though many Unix applications already work using the SaaS model, EULA applications did not have this flexibility before SaaS. A licensed copy of a word processor, for example, had to reside on each machine in order to create a document on that machine. The equipped program has no intrinsic value loaded on a computer that is turned off for the night. The same employee would need another fully paid license to write or edit a report at home on their own computer, while the work license is inoperative
History
oftware as a service's acronym, SaaS, first appears in an article called "Strategic Backgrounder: Software as a Service." It was published in February 2001 by the Software & Information Industry's (SIIA) eBusiness Division. This 18 page document is one of the most complete essays pertaining to SaaS available today. SIIA developed the backgrounder to analyze the current state of the SaaS market and its near term prospects, and to provide insight for its members who may be profoundly impacted by changes implied in the SaaS mode. Software as a service is essentially an extension of the idea of the Application Service Provider (ASP) model
Advantages
Accessible from anywhere with an internet connection
No local server installation
Pay per use or subscription based payment methods
Rapid scalability
System maintenance (backup, updates, security, etc) often included in service
Possible security improvements, although users with high security requirements (e.g., large corporations) may find SaaS a security concern
Reliability
SaaS has become a common model for many business applications including accounting, collaboration, customer relationship management (CRM), enterprise resource planning (ERP), invoicing, human resource management (HRM), content management (CM), and service desk management.
No local server installation
Pay per use or subscription based payment methods
Rapid scalability
System maintenance (backup, updates, security, etc) often included in service
Possible security improvements, although users with high security requirements (e.g., large corporations) may find SaaS a security concern
Reliability
SaaS has become a common model for many business applications including accounting, collaboration, customer relationship management (CRM), enterprise resource planning (ERP), invoicing, human resource management (HRM), content management (CM), and service desk management.
Software as a service
Software as a service (SaaS, typically pronounced [sæs]), sometimes referred to as "software on demand," is software that is deployed over the internet and/or is deployed to run behind a firewall on a local area network or personal computer. With SaaS, a provider licenses an application to customers either as a service on demand, through a subscription, in a "pay-as-you-go" model, or (increasingly) at no charge when there is opportunity to generate revenue from streams other than the user, such as from advertisement or user list sales. This approach to application delivery is part of the utility computing model where all of the technology is in the "cloud" accessed over the Internet as a service.
Subscribe to:
Posts (Atom)