Many proponents and industry insiders who have taken a close look at SaaS have said that there is little doubt that it will have a major impact on Information Technology. One reason for this is because SaaS has a structure which is likely to alter the way that providers share their computing services with the other elements of their organizations.

SaaS is seen by many as being a software delivery tool which is highly effective, and it has generated great opportunities for those IT departments who wish to alter their focus from the mere deployment and the support for applications as well as the management of services which these applications offer. The IT which is service oriented will produce greater value for businesses.

The reason for this is because it will offer services which will be drawn from the inside and outside sources which are closely connected to the goals of the business. At the same time, there are some issues which are associated with SaaS, and by understanding SaaS and the issues which face it, organizations will be much more prepared to utilize it.

Software as a Service is typically defined as the service which is deployed in the form of a hosted service, and which is accessible all over the Internet.  SaaS has often been connected to the ASPs which existed in the early 1990s, those tool which were often called "shrink wrap" apps. These were the first attempts at software that was delivered over the web, but they were still closely related to applications that were on-premise.

When these applications were first introduced, they were single tenant tools, meaning that their capacity for sharing information and methods with other apps was highly limited, and they had a tendency to offer fewer cost benefits than those applications that were installed locally.

It is believed that the SaaS applications in existence today will work with centralization based on the multi-tenant architecture which is single instanced, and they will also be expected to offer experiences which are rich in features for the applications which are on the premises. The standard SaaS app will either be offered by the vendor or through the aggregator, which is an entity who will essentially bundle the SaaS tools from multiple sources.

SaaS Application Distribution

In the past, most on premise software made use of a licensing structure that was one-time. In contrast, SaaS applications will generally be sold in the form of a subscription, and the customers will need to pay a fee regularly in order to have continual access. The fee structure will differ based on the application, and while some vendors may charge a flat rate for 100% access, others may charge different rates depending on the access that the individual seeks.

From the technical side, the SaaS provider must be responsible for properly hosting the data as well as the application in a central manner. Both the patches along with the upgrades will likely be transparently placed in the application, and access to the tool will be offered to the end user via the Internet.

Internet browsers will essentially be used for this purpose, but a smart client tool may be used as well. One of the biggest problems that face Internet based SaaS applications is that the user must depend on their Internet connection in order to get access.

For instance, if a user is paying a monthly subscription, and suddenly their Internet goes down for days due to an electrical storm or some other power outage, this could block their access to the software despite the fact they are paying monthly for it in order to have access. While it is obvious that the vendor is responsible for the Internet outage, it is an issue that must be considered, and it is a weakness of apps which are Internet based.

How Vendors Utilize SaaS

The ways in which vendors use SaaS is a lot different from traditional on premise software. For instance, many vendors will offer what are called APIs or application programming interfaces, which will be responsible for exposing the data for the application as well as the functionality that developers will need in order to generate the composite applications. Many of the security mechanisms may be utilized in order to hold critical data within the storage, and to make sure it is concealed during transport.