Wednesday, May 11, 2005

Software as a Service

The SDForum has a new SIG called Software as a Service (or SaaS for short) and they had their first meeting tonight. If you did not blink at the height of the boom, you may have seen the shortest lived SDForum SIG, the ASP SIG that had a life of less than a year. Now software as a service is back, and this time it is here to stay.

Tonight's presentation was given by two analysts from IDC, a market research company. I believe that the presentation is their standard presentation that they give when they are touting for business, however it did contain a lot of interesting stuff. As a software developer, a number of things stood out.

Packaged software offers a bad user experience. The software company creates a product which they throw over the wall to the customer. The customer implements it with little or no help and with great difficulty. At the same time the software company has little idea what the customer is doing with the product to help them plan features for the next release. On the other hand, software as a service is implemented by the software company who have a motive for helping the customer make the best use of the software. As the software is run by the software company, it can easily find out how the software is being used to help the customer make the best use of the software and to understand how to enhance it.

Large and medium sized companies tend to use software as a service to enhance existing applications, while smaller companies use it more to replace existing applications. In all sized companies the number of new applications using software as a service is small. In fact the analysts seemed optimistic that software as a service would increase the size of the software market. (On the other hand I have never met an analyst with a pessimistic market projection.)

The most common reason for switching to software as a service is the prospect of having to upgrade an existing software package. I am sure that having to upgrade is a major reason for changing to a new software implementation anyway, however software as a service does not suffer from the upgrade problem in the same was as packaged software does, as the upgrade is done by the software provider.

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