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274 Chapter 10 • Global, Ethics, and Security Management

Software as a Service (SaaS)
Software as a Service (SaaS) is a model of software that can be rented or leased from a software
vendor that provides maintenance, daily technical operation, and support for the software. SaaS
is a model of software delivery rather than a market segment; it assumes the software is delivered
over a secure Internet connection. Software can be accessed from a browser by any market
segment, including home consumers and small, medium, and large businesses. The SaaS model
brings lower risk in the implementation cycle and better knowledge transfer from integrators to
users of systems. “When the implementation partner leaves, the implementing hosting vendor is
still there managing the solution. So the knowledge transfer happens seamlessly, automatically,
for no additional cost, no impact on schedule, and, of course, lowering risk. With conventional
implementations the opportunity exists for disconnects that could hamper the knowledge-
transfer process to the customer’s support staff.” 13

BENEFITS OF THE SAAS MODEL The traditional rationale for outsourcing of IT systems is that
by applying economies of scale to the operation of applications, a service provider can offer
better, cheaper, more reliable applications than companies can themselves. The use of SaaS-
based applications has grown dramatically, as reported by many of the analyst firms that cover
the sector. But, it’s only in recent years that SaaS has truly flourished. The advent of PCs and
high-speed Internet has provided an opportunity to the way we work and made this rapid accep-
tance possible. Some benefits of the SaaS model are as follows:
• Universal access. Most information workers have access to a computer and are familiar
with conventions from mouse usage to Web interfaces. As a result, the learning curve for
new Web applications is lower, requiring less hand-holding by internal IT staff.
• Ubiquitous computing. In the past, corporate mainframes were jealously guarded as
strategic advantages. The applications were later viewed as strategic. Today, people know
it’s the business processes and the data themselves (i.e., customer records, workflows, and
pricing information) that matter. Computing and application licenses are cost centers. As
such, they’re suitable for cost reduction and outsourcing. The adoption of SaaS could also
drive applications to become a commodity. 14
• Standardized applications. With some notable, industry-specific exceptions, most people
spend most of their time using standardized applications. An expense reporting page, an
applicant screening tool, a spreadsheet, or an e-mail system are all sufficiently ubiquitous
and well understood that most users can switch from one system to another easily. This is
evident from the number of Web-based calendar, spreadsheet, and e-mail systems that have
emerged in recent years.
• Parameterized applications. In older applications, the only way to change a workflow
was to modify the code. In more recent applications, however, and particularly Web-based
applications, significantly new applications can be created from parameters and macros.
These allow organizations to create many different kinds of business logic atop a common
application platform. Many SaaS providers allow a wide range of customization within a
basic set of functions.

13 Traudt, E., and Konary, A. (June 2005). 2005 Software as a Service Taxonomy and Research Guide 7. IDC.
14 www.saasblogs.com/2006/09/26/scale-as-a-commodity-2/ SaaSBlogs: Scale as a Commodity (accessed February
2001).