The term Software as a Service first emerged in the year 2000 and can be defined as a means of providing services of remote access to software where both the software and the hardware components are hosted by the SaaS vendor (Torbacki, 2008).
Introduced in 1999 by (Bennett et al., 2000) as being an upcoming shift towards service-orientation and virtual market places; specifically speaking to the Internet age, and the dramatic effect it has on organisations in terms of producing agile and dynamic systems, it is stated that software can no longer be produced as a single system but rather as a family of systems. This alludes to the SOA architecture which in its simplest terms can be viewed as a “family of systems” as each service forms modular representation of the whole system.In the SaaS model, the vendor ensures the security and isolation of data for each software application instance.
There however distinct facets of the SaaS model that identify whether a system is a true implementation, as quoted by Patrick Grady, CEO of Rearden Commence “If you don’t have a single-instance, multitenant, on-demand, pure SOA-based platform, then it’s all crap and the customer will not receive any of the advertised benefits” (Deyo, 2008). In addition, the system must be accessible via the Internet, using any web browser eg. FireFox, Opera, Microsoft Internet Explorer and operating platform (Deyo, 2008).
The reason why he may quantify it so explicitly could be because SaaS is often compared to a similar model called ASP (Application Service Provider).The ASP model simply hosted application solutions with a provider but with no underlying changes to their systems and the hosting infrastructure(Kaplan, 2006). This resulted in the ASP’s becoming burdened with the hosting and maintenance costs of various systems which ultimately lead to the failure of ASP (Kaplan, 2006).
Other differences distinguishing SaaS from ASP include the licensing model where ASP clients pay for the availability of a software solution and do not have the option of selecting or enabling certain modules in the software package whereas the SaaS model is able to offer a selection of reusable modules as well as a per user payment structure (Torbacki, 2008).
SaaS software has been available since 1999 when SalesForce.com pioneered the movement with its release of its CRM (Customer Relationship Management) service, others soon followed suite with a list including Apple Inc’s MobileMe, Google Apps, Microsoft Office Web, Netsuite , Photoshop and Amazon(Deyo, 2008).