July 11, 2006

Software as a Service (SaaS)

I ran across a couple of articles recently that introduced the concept of Software as a Service (SaaS) as a new software delivery model. It seems very much like a maturity of the old ASP model of the late nineties of hosted applications. Now, instead of highly customized and developed applications for specific customers, you have applications that are hosted that the client will customize for themselves and their user base with little to no involvement on the part of the SaaS provider.

I think the most interesting part of this is that it really lowers the cost of providing potentially great applications, since the variable cost in adding a new client in a custom way is very cheap. This should allow more smaller niches to grow in ways that before the advent of this delivery model were unable to do. Furthermore, I think it plays nicely into the hands of the microisv who is already going after the niche markets.

It is also interesting that different architecture thought is being pushed out onto the table for discussion to support this delivery mechanism like Multi- Tenant Data Architecture. The development of this idea will help more than just SaaS architected solutions.

It's exciting to see and I highly recommend checking out the two articles linked to in this post -- it might change the way you think of your business model as well as your IT architecture.