The primary reason why companies both big and small are taking advantage of the Software-as-a-Service (SaaS) delivery model is that the world is moving towards a web-based business model, because it offers several advantages over the traditional delivery models.
The web helps remove most of the location-dependent anxiety that gets in the way of communication, collaboration, and trading. Traditionally, software used to be delivered in boxes, and had to be installed in the same building as the people that used it. The web removes these constraints, enabling SaaS, which in turn becomes the basis for innovative ways of interacting and doing business.
SaaS is a software delivery model, by which enterprise applications are delivered over the Internet, and managed as a service by software vendors themselves . The business benefits that SaaS ERP offers include the following:
- The SaaS model shifts the burden of getting and keeping an enterprise application up and running from the customer to the vendor.
- It can be implemented rapidly, and eliminates the infrastructure and enduring costs, which traditional applications require.
- It permits users to leverage the software functionalities, without the burden of deploying and managing the software themselves.
- It also eliminates the costs and complexities of deploying additional hardware and software, or dedicating additional staff resources to support the enterprise application on an ongoing basis.
The SaaS model also enables every customer to benefit from the vendor's latest technological features, without the disruptions and costs associated with software updates and upgrades.
| SaaS Model vs. Conventional: Compare Business Benefits | |
| SaaS Model | Conventional Model |
| No Capital Expenditure | High Capital Expenditure |
| Nominal investments | High direct and indirect investments |
| Low cost subscription model | High ballooning costs |
| Implement in hrs | Long implementation cycle |
| Scalable | Rigid |
| Any time any where access | Limited Access |
| Free Upgrades | Upgrades at extra costs |
| Flexible Licensing | Rigid Licensing |
