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Thinking about SaaS: The goal of more efficient software

Posted by terrosatechnologies on December 6, 2008

This Thinking about SaaS focuses on why SaaS is truly a better answer for delivery of software. We are not just talking browser based applications, but why properly architected SaaS software applications have a true efficiency advantage over locally installed systems. For you, the software user or the software provider, understanding these architectural differences will at some point benefit your bottom line.


To understand the subject of software efficiency, consider how we arrived at this point. I will use financial accounting as an example. Many years ago, all software was built in-house. There were no packaged financial applications. Big companies, using big systems, each built their own accounting systems. Over and over and over this process was repeated, with the help of programmers from IBM and others. Each end user company duplicated efforts, with an attempt to make the process more efficient through better coding practices.


Then financials in the form of a set of pre-written base code arrived from the vendors. This code base was a starting point from which each company customized and re-worked to meet their specific needs. Companies could start with this generic set of code, rather than starting from scratch.


Further attempts to make application development more efficient all stemmed around reducing the amount of coding needed to produce an application. Re-usable code, object oriented programming, high level application development tools, etc.


What eventually won out were packaged financial applications. Generic software packages became so full featured, with so many options, that most companies no longer needed to write their own financial software.


What is still very inefficient about this approach is on the operational side i.e. the repetitive nature of each customer installing, upgrading, fixing, patching, and maintaining these applications. Also, each individual customer is free to choose different hardware, operating systems, databases and upgrade schedules. This forces software vendors to support multiple releases, multiple versions of their product, and deal with all sort of issues because of these platform inconsistencies.


Outsourcing companies known as Application Service Providers, attempted to improve these software affecting platform inefficiencies by offering services to run applications for companies offsite. Citing operating efficiencies, hardware standardization, consolidation of support personnel and other reasons; companies such as IBM, EDS, HP expected to run applications for less money than companies could run them internally. The fundamental problem with this approach is that the ASPs, were still supporting software that was designed to be used by only one company. So while in a centralized location, ASPs were still installing, upgrading, fixing, patching and maintaining many copies of the application and customers were still dictating upgrade schedules and customized features.


 In a true SaaS environment, the software provider chooses to run their application on a consistent set of equipment with one operating system, one database, supporting one current release. The entire customer base is running in this consistent environment. Support is unnecessary for back releases, various types of databases, multiple operating systems and different hardware brands. This scenario is only made possible by a multi-tenant software architecture.


So what this history lesson clarifies for us now, is the fundamental driver behind SaaS efficiency – a ground up multi-tenant design that allows application sharing across many organizations.


Be aware that terminology in the SaaS world is ‘clouded’ by vendors whose marketing department may be a few years ahead of their software teams, calling their products SaaS when they don’t have this multi-tenant design. Vendors in this situation may still have the inefficiencies of the ASPs behind the scenes while calling themselves SaaS vendors in their written materials.   


As true multi-tenant SaaS software matures, with the ability to support more and more complex business needs, with all the operating benefits of multi-tenant operations, it is clear that SaaS is truly a fundamental shift in how software is used.





This “Thinking About SaaS” article is one in a series produced by Terrosa Technologies’ President, Kim A. Terry. Each article addresses a different knowledge area of applications delivered via the SaaS subscription model.




About Terrosa:

Terrosa Technologies was born out of the recognition that software provided as a service produces greater efficiency, value and benefits over traditional site installed solutions. Enabled by a fast reliable Internet and the ever increasing sophistication of Saas offerings, many companies will be able to reduce their cost of operations and afford to do more with less. In uncertain and financially challenging times, it is more important than ever that Terrosa is helping our customers deliver products and services more efficiently and with less risk.


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