When the Internet burst upon the scene in the early 1990’s, the concept of software as a service (SAAS) seemed an idea whose time had come. It got hyped along with everything else about the internet and reached a massive peak of inflated expectations in early 2000 as venture capitalists funded dozens of nearly identical companies that provided various SAAS solutions. As venture funding dried up in mid 2000, the cracks in the SAAS model began to appear. The business plans assumed zero customer attrition, an uncompetitive landscape and IPO’s in the absence of revenue. Disillusionment set in and 99 percent of those companies are no longer around. However, the strong did survive, and now, due to the success of companies like Salesforce.com and Rightnow.com, SAAS is back.
Analysts claim that by 2010, 30 percent of new software will be delivered via an SAAS model.
Variously termed “on-demand software”, the “ASP” model, or “hosted software”, SAAS is where you rent web-based software hosted at the provider’s site. For many companies large and small, SAAS is the best way to rollout new technology. SAAS has now proven itself and is here to stay.
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