Software as a Service

About six months’ ago, the term SaaS (Software as a Service) seemed to spring from nowhere. Everywhere I turned, every company, contract professional and trade association made mention of SaaS as the latest and greatest software “licensing” methodology. As recently as two days ago, my local paper ran an article the other day touting SaaS as the transforming “event” for the next generation. But things really haven’t changed that much and SaaS isn’t exactly new.

When computers were new, users accessed them via dumb terminals – where the operating system and all of the software was stored and ran on a computer apart from the terminal from where it was accessed. Service computing was born. As machines became smaller and faster, users no longer needed to rely on a central computer as they had the power at their fingertips, at their homes.

A few years ago, as the internet became popular and businesses installed very-high-speed connections into their offices, Application Service Providers started offering their software… again in a remote, service-oriented fashion. Every vendor wanted to offer an ASP model. Generally, two types of ASPs were created – one in which a third party hosted the application on behalf of the vendor and provided the access to the customer, and the other where the vendor provided the application AND the hosting.

Bandwidth was an issue, of course. But the fundamental problem for ASPs was always the service itself. Vendors had a difficult time maintaining the service levels (sometimes because of bandwidth, sometimes for other reasons). But the end result was the same… vendors made promises that are very hard to keep in a hosted environment.

SaaS is no different today than it has ever been. It’s not going to alter the software licensing landscape unless and until the vendors who offer ASP/SaaS are able to maintain the service levels. Once they do, it’ll be interesting to see what happens. Until then, traditional software licensing isn’t going anywhere.

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