| 1. What is Software as a Service (SaaS)?
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| A Software as a Service (SaaS) provider is a company that offers individuals or enterprises access over the Internet to applications and related services that would otherwise have to be located in their own personal or enterprise computers. SaaS solutions are expected to become an important alternative, not only for smaller companies with low budgets for information technology, but also for larger companies as a form of outsourcing and for many services for individuals as well. |
| 2. What advantages do SaaS solutions offer over traditional approaches? |
- Cost reduction for technology. For users of all sizes from small business to multinational corporate, the SaaS advantage is a monthly fee to access applications instead of having to invest thousands or millions to create and maintain IT infrastructure.
- Shorter implementation cycles compared to a typical in-house rollout of technology.
- The company can focus on its "core competency" of running and minding their own business, focusing on achieving their key business objective, instead of implementing and maintaining hardware, software, help desk, and other internal IT issues.
- Eliminates or reduces recruiting, retaining and retraining IT personnel.
- Guaranteed "up time". Most SaaS solutions can provide this guarantee because they invest in high-end hardware and operating environments.
- Affordable access to current technology and tier-one business applications.
- SaaS users do not have to pay for licenses for the software they use, install, upgrade, or fix.
- Full integration of multiple applications and software upgrades is provided.
- The customer benefits from economies of scale.
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| 3. What are the short-term benefits? |
- Enables users to access state-of-the-art technology immediately without upfront investment in hardware and software.
- Implementation is usually significantly faster than internal solutions.
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| 4. What are the long-term benefits? |
- Software upgrades at no additional cost; avoids technology obsolescence.
- No retraining of IT personnel as technologies change.
- More available capital to fund business growth.
- Scalability as you grows and expand your business or as you change strategies and relocate business.
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| 5. How do I select a SaaS provider? |
We recommend evaluating SaaS solutions on the following dimensions:
- Focus - look for vertical focus in the communication and collaboration industry.
- Proven - select a provider with proven, field-tested applications and service contracts.
- Expertise - ensure management team knows the objective of using the collaboration tools to achieve business goal.
- Support - evaluate implementation support, help desk, and training.
- Security - require backup, recovery, encrypted data, firewalls, ID and password access.
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| 6. For what type of businesses or operations are SaaS solutions well suited? |
- Distributed or multi-unit operations.
- Businesses with high capital requirements who can benefit from higher returns by investing this capital in unit expansion, rather than investment in technology hardware and infrastructure.
- Small businesses that have the need for technology applications, but not the budget to invest in hardware and infrastructure.
- Large operations with many units who are tying up capital in technology at the store level and could benefit from the cost savings of outsourcing the high costs of maintaining a large internal IT department to support these operations.
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| 7. What role will my internal IT department play if I choose SaaS? |
| Choosing SaaS will enable your internal IT department to focus on strategic issues around technology in your business, rather than the time-consuming activities of hardware and software maintenance and user support. You may find that you need fewer internal resources than previously. |
| 8. What services will SaaS provide? |
- Application selection.
- Application integration across your applications and systems.
- Data management.
- User training.
- Implementation across your system.
- Hosting of applications.
- User support: help desk, etc.
- Security.
- Other professional services.
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| 9. How do SaaS solutions price their services? |
| Typically, there is a one-time implementation fee plus a low, monthly subscription fee and a low fixed cost. The advantage of this pricing is lower cost and predictable IT costs that can significantly aid in your forecasting and budgeting, as well as acquisition of capital. |
| 10. Why do SaaS solutions cost less than traditional distributed client/server approaches? |
| Economy of scale allows SaaS solutions to spread their investment in hardware and software over their entire user base. These savings are passed on to the users. |
