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Tuesday, September 12, 2006

Software As A Service (SAAS)

Software As A Service

Tough time ahead for those who are used to pirated softwares. Most of the Software vendors worldwide, spearheaded by Giant Microsoft, are moving towards Software As A Service (SAAS) concept as against current practice of COTS (Commercial Off The Shelf) product.
What is this SAAS? Software As A Service concept involves giving software for a small but regular fee (call it rent if you wish) instead of selling it for a one time payment.
Before describing on SAAS few lines on existing trend: The software (Games, OS, Applications, Music etc) is sold as COTS in CDs and DVDs.

The problem here was two fold:
Piracy: For every genuine copy of software sold, there'll be hundred copies generated illegally using CD and DVD Writers and circulated among people, without any benefit reaching the owner of that intellectual property. The mechanisms to prevent contents from copying have by and large failed and piracy was killing the industry

Upgradation: Most of the individual, though buy genuine copy once do not bother to buy upgraded versions. Windows 98 was so popular and good enough for basic usage that people seldom bothered to buy next versions of Windows. Though some products come with expiry period, people often find ways to keep it working by manipulating various parameters and settings

So in both the above cases, the company selling the software would loose considerable revenue.
How SAAS overcomes this?

In SAAS, you pay for software when you use it. Once you start a SAAS application, vendor will be alerted that you've started using it. Calculating how long you've used it and what all the features you've used, you'll be billed proportionately. For example, till now you were buying Windows XP Professional OS buy paying a one time amount of say Rs 5000, now onwards, for Windows Vista you will have to pay a small amount every time you use it, instead of one time payment.

SAAS depends heavily on internet. It's not possible to use SAAS on internet disabled machines (as per my knowledge). Every time you use SAAS application you'll be authenticated. Because of this, even if you get a copy of the software, you won't be able to use it unless you connect to vendor server via internet, which implies you'll need proper genuine identification every time and will be billed

Let's analyze the pros and cons of SAAS

Pros:
For the Vendor:
1. Regular income
2. Freedom from Piracy
3. Full control on pricing and usage (Vendor can change the pricing, update product features and collect usage data effortlessly)

For the consumer:
1. No need to pay heavy one time price
2. Regular product update and live support
3. Pay as you use. If you don't use it for some time or certain specific features of a software you need not pay for it.
4. Very economical if you need the product only for short term

Cons
For the Vendor:

1. Stand alone machines without internet connection can't use SAAS products
2. Have to ensure customer satisfaction all the time. Anytime customer may stop using the product and stop paying for it.
For the Consumer
1. SAAS will be expensive for long run (if you plan to use a product for lifetime, one time payment for COTS will be economical)
2. Piracy impossible
3. Will be under the mercy of vendor (Vendor may change pricing, force you to go for an upgrade, may choose to stop support etc)
4. Live internet connection will be needed
5. Vendor may silently collect usage data and user data
6. Just like your monthly electricity bill, you'll have to keep paying your monthly software usage bill (Though this can be automated)

However SAAS depends heavily on internet connectivity. Unless number of computers with internet connectivity increases SAAS can't proliferate well.

We'll have to wait and watch



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5 comments :

Raveesh Kumar said...

Informative and Interesting article

Kishore Nedunuri said...

Hey..It is really intresting Nidhi...I think Hackers Should work hard inorder to crack SAAS..
But what if they Crack???

Scenario will be like.. hackers will use your account for using the software and you are going to pay the bill...

Shrinidhi Hande said...

it'll be still tough for hackers. First, consumer and vendor will take every precaustion that their account details are not leaked to outsiders.

Even if hackers manage to get my account details, I'll get the alert very soon when I see that I'm loosing more money than I'm supposed to (When I see the bill or bank statement) and I can take counter action soon.

As a result, even if hackers crack inside, they'll enjoy only short term, and I may loose in the max say few months rental...

Kishore Nedunuri said...

Nice man...Nice Blog.........

Shrinidhi Hande said...

Thanks Kishore