Haven’t we all heard about Software-as-a-Service (SaaS), or on-demand as it is popularly known, and the buzz surrounding it? Thankfully, it doesn’t remain a buzz anymore. Independent Software Vendors (ISVs) are taking it seriously as its benefits are being considered real. SaaS may or may not be fit for every ISV, but it is a business model that every ISV will consider; ignoring it at their own peril. Even with a set of debatable topics like piracy, licensing, billing, security and “build versus buy” dilemma, established software companies are realizing that they are well positioned to gain from the SaaS model by serving the long tail of the market.
Mid-market companies typically have the same requirements as large organizations. However, they can look at getting anywhere near enterprise-class functionality only through SaaS. Availability of on-demand solutions in the form of talent management, talent acquisition, learning, training, enterprise resource management, business intelligence solutions will help mid-market companies achieve enterprise-class functionality and, in turn, allow ISVs to serve the long tail of the market.
Large companies, on the other hand, may not find SaaS valuable, though it can play a role in their portfolio to a limited extent. There cannot be anything further from the truth as there are numerous corporations using SaaS solutions for automating and supporting key business processes from Customer-relationship Management (CRM) to Procurement to HR.
As a SaaS company, you just have one code base of your software, used by all customers in what’s called a multitenant architecture. The software might be configurable by users for their individual needs, but the code remains the same and is not customizable for any customer. Competitive advantage or differentiation based on the software itself is negligible. While this was the case earlier, SaaS providers have now woken up to this and have developed platforms that can accommodate customizations. This rich customization allows SaaS providers to serve larger corporations.
