SaaS is having a major impact on the software industry, and the reason for this is because it will change the way that people build, use, and sell applications. SaaS has much potential, but only in the hands of those who can use it. 

At the same time, vendors must be able to use SaaS in a strategic manner, and this will require valuable info which is related to how SaaS can be properly utilized. SaaS is best defined as "the software which is deployed in the form of a hosting service, and which is accessed via the Web."

When you truly understand the power of this definition, you begin to understand the ways in which this technology can be strategically used. Generally, there are two broad categories that SaaS falls under, and this is those services which are Consumer Oriented, and those services which are Busines Oriented.

As the name suggests, consumer oriented SaaS is those software tools which are designed for the general public. These services may be sold based on a subscription, but in many cases they are offered to consumers for a very low cost (often free), and the cost will be supported through advertising.

In order for vendors to use SaaS in a strategic manner, they will need to change their way of thinking. They must change their way of thinking when it comes to the operational structure, the architecture for the application, and the business model itself. To alter the business model, the ownership of the software could be moved from the customer to a provider who is external.

Another option is to change the responsibility for the infrastructure along with the management, which means professional and hardware services, from the customers towards the provider. The cost of offering the software services can also be lowered, and this can be accomplished via either specialization or economies of scale.

It is also possible to place an emphasis on smaller businesses, and lower the start up costs for the software. Understanding the benefits involved with SaaS will require both the provider and the customer to change the way they think about SaaS. Another question that must be raised is who actually owns the software. This is a critical question that must be addressed.

Software Ownership

Today, for the most part, software continues to be sold in the same manner it has been sold in for years. The customer goes to the store(either a physical store or a digital one), and purchases a license to use the software, and then they implement this software on their computer via an installation. The hardware belongs to the customer and is under their control, and the vendor offers them support via whatever terms have been placed in the license agreement.

In a transaction which is honest, the concept of a license may seem somewhat like a technicality. Even though the customer is technically only purchasing a "right" to use the software, for all intents and purposes, that customer actually has ownership of that software, and may use it as much as they like for as long as they wish.

The software as a product model offers a specific context for the market, but this also means that the concept for SaaS is quite alien in comparison. Instead of having true ownership of the software, the customer is told they may pay for a subscription for the software which operates on servers owned by another person or entity, and this software will go away in the event they cancel their subscription. What this means is that it is very important for the customer to understand the difference between SaaS and traditional software models, and how this new model is more economical than the traditional one. It is also important for organizations to make sure IT tasks are properly delegated.

IT Delegation

In most firms, the IT budget will be spent on several things, and these things are hardware, software, and professional services. The software is the data that the organization will use for computation and handling information. The hardware involves the physical computers, servers, and networking tools that will offer the users access for the software. The professional services are the institutions and individuals who must be responsible for ensuring the continuation and the availability for the system, along with the technical staff and the consultants.