Beginning of the Dot com boom and birth of SaaS

Quite a few of these dot-coms were highly successful but most that went bust, ran out of capital and were acquired or liquidated. It looked like all such companies focused to increase their valuation to consequently being funded by Venture Capitalists or being bought over. One primary reason for such companies to fail was that, most such start-ups did not focus on the end-users.

Companies that survived the dot-com bubble were those that provided value-added services to end-users by providing a unique experience or additional value that was either not possible through an offline mechanism or that made a particular job comparatively easier, when made available online.

One such category of companies was dot-coms that offered Software as a Service (SaaS).  

What is SaaS and on-demand software?

Software as a Service (SaaS) is a model of software delivery where a software company provides maintenance, daily technical operations, and support for the software provided to their clients. SaaS is a software delivery model and not a market segment.

The key characteristics of SaaS include:

• Network-based access to, and management of, commercially available  software.
• Activities that are managed from central locations rather than at each customer's site, enabling customers to access applications remotely via the Web.
• Application delivery is closer to a one-to-many model to comprise of architecture, pricing, technical support and partnership.

There are two types of SaaS providers. The first has often been referred to as an Application Service Provider (ASP) wherein a customer, primarily a software company, purchases and brings to a hosting company, a copy of software.

The second type of SaaS provider offers what is often called Software On-Demand. This is where a company develops and hosts a suite of software applications to be used by multiple end-users or clients.

One of the biggest success stories of SaaS and particularly on-demand software provider is salesforce.com, a provider of CRM solutions on the web, founded by Marc Benioff, a champion of SaaS delivery model. Today, SaaS is emerging as a preferred option for most software companies due to the inherent benefits that the model provides. Oracle, SAP, Microsoft and many others have been aligning a considerable portion of their business to leverage the benefits.

iEmployee, an On-Demand HRMS (Human Resource Management Systems) software provider in the US of A started with a strong service delivery vision to corporate customers and is today amongst the top 10 HRMS provider in the US of A.

The focus in SaaS is more on what the customer wants rather than what the vendor could give, as was the case in an ASP.

ASP applications were hosted by third-parties that basically did not have application expertise, but were only managing servers. Owing to the fact that applications were not written as native internet applications, performance was poor and application updates were no better, either. By comparison, current native internet SaaS applications are updated at much regular intervals than traditional delivery methods. For that matter, updates are done even monthly or daily.

Rather than buying and installing software in-house, companies access the application online. On-demand software allows a business to capitalize on its existing technology investment by outsourcing its other software needs.

An on-demand software company hosts the software and all related data on its servers in a centralized location. Clients pay a monthly or annual fee to access the software, hardware, data storage and even technical support.

In fact, on-demand software providers such as iEmployee may provide several product modules through a single application and authentication system for a complete integrated solution within a domain.

Cheers

 Paul

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Article by Akash Dave (iemployee.com)