A Blog About Software As A Service

This blog is all about software as a service (SaaS) for business. If it is in the cloud, you will find it here.

• Making a Case for SaaS: A Look At Costs

  Posted on May 12th, 2009 Nathan Burke No comments

  Jeff Hassemer, vice president, product management, of software provider Entiera has a post up on multichannelmerchant.com entitled "Making a Case for SaaS". The article details the ROI implications of Software as a Service:

  SaaS applications have been in the market for quite a while now. Most online marketing software companies—those that provide functions such as e-mail, Web analytics, ad serving or behavioral targeting—operate in this model.

  What this means is the vendor who developed the software also supplies the infrastructure to manage the software. The customer then pays a fee for its particular usage of the software. This is done either as a monthly commitment or possibly a variable cost based on volume.

  Contrast that with a standard software license purchase. After an initial upfront fee and implementation fee, the customer also needs to:

  - Purchase and set up a server to install the software (sometimes several)
  - Buy any necessary ancillary software licenses (database system, operating system, middle ware, etc.)
  - Pay ongoing support costs for the hardware (electricity, security systems, IT staff), plus an annual license and maintenance fee (a percentage of the list price of the software)
  - Handle all system upgrades and ongoing maintenance
  - In many cases, pay upgrade fees for new versions of the software

  All of these costs can add up over time. One thing often overlooked in a traditional software purchase is the ongoing expense of upgrading the systems to support the core application itself.

  Have a look at the article.

  SaaS

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