Businesses long to be freed from their bondage to vendors who lock them into their software via hardball licensing agreements and endless rounds of upgrades and new versions. “Imagine a Swiss army knife: all the tools needed are provided online, from authoring to publishing to access management at a protected site.” Peter Cervieri>Text
The software-as-a-service (SaaS) model is being touted as the antidote to many of these vendor excesses.
The model, its proponents claim, is edging the software industry closer to the economic nirvana customers really want: utility IT services where you pay for what you use only, without any maintenance headaches.
ScribeStudio, a New York-based provider of e-learning software, is one example. “ScribeStudio is SaaS for e-learning,” says CEO Peter Cervieri. Developing online training courses is often a chore for companies, as technical staff with HTML and Web design skills need to be involved. But with ScribeStudio, a subject matter expert with virtually no technical skills can develop a course autonomously.
“Imagine a Swiss army knife: all the tools needed are provided online, from authoring to publishing to access management at a protected site,” says Cervieri. ScribeStudio uses three metrics to charge customers: number of seats, storage and bandwidth. There is nothing to download, and customers are metered and charged only for what they use. There are no upfront fees, so customers can dip their toes into ScribeStudio’s SaaS waters without being put back thousands of dollars, says Cervieri. “It is just like a utility – if it’s winter, you crank up the heat when you need it and you turn it off when you don’t.”
There are also benefits to vendors, who don’t need to worry about producing CDs, product manuals and upgrades for their software. “I only have a single instance of my application to maintain and improve, unlike, say Windows, which has Windows 98, XP, Longhorn and so on,” he says.
More and more SaaS firms are popping up, and are giving traditional vendors a run for their money. Cervieri says the arrival of Salesforce.com gave people a viable SaaS alternative to Siebel’s customer relationship management (CRM) offering. “Companies that haven’t signed up with Siebel will think twice now,” says Cervieri. “In the short run, those traditional models are sustainable because people are locked in. But everyone comes up for renewal eventually.”
As a pre-emptive strike, many traditional vendors are responding with SaaSesque versions of their software. Oracle Corp. offers Oracle on Demand, a hosted version of its e-business suite. Madacy Entertainment Group Ltd, a Montr