Software-as-a-service is hitting its stride

Delivering software as a service, accessed from the Internet rather than installed on a computer, is rapidly becoming the way for businesses to use software, said experts attending a conference Tuesday called SaaScon in Santa Clara, Calif.

Software as a service is moving from its early adoption phase last year to mainstream status this year and could be ubiquitous as soon as 2008, said Bill McNee, founder and CEO of market research firm Saugatuck Technology.

"We're beyond the tipping point. We are in the midst of a revolution," said McNee.

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Delivering software as a service, accessed from the Internet rather than installed on a computer, is rapidly becoming the way for businesses to use software, said experts attending a conference Tuesday called SaaScon in Santa Clara, Calif.

Software as a service is moving from its early adoption phase last year to mainstream status this year and could be ubiquitous as soon as 2008, said Bill McNee, founder and CEO of market research firm Saugatuck Technology.

"We're beyond the tipping point. We are in the midst of a revolution," said McNee.

Saugatuck research shows that 26% of companies surveyed use at least one software-as-a-service application in their business in 2007, up from just 11% in 2006. By 2010, it forecasts as many as 65% will be using at least one application.

Software as a service lets customers access software applications through a Web browser, usually for a subscription fee. This makes software management easier for a customer because they don't incur the capital expense of buying software licenses, don't have to deploy it to each computer and don't have to keep track of updates.

Software as a service can reduce a company's total cost of ownership of software from between 20% and 40%, compared with software licensing, said Arthur Wong, senior vice president in the security and data management group at Symantec.

Symantec, which specializes in network security and virus protection software licensing, now also offers a software-as-a-service option, Wong said. Its Symantec Protection Network, announced Tuesday at SaaScon, provides a data storage and protection service, which can help companies prevent hackers from breaking into databases to steal valuable customer data.

Software-as-a-service vendors are likely to expand the types of software they deliver via SAAS to meet growing customer demand, said McNee.

The types of applications that companies subscribe to, in order of popularity, include collaboration, CRM, payroll, travel planning and human resources, among others, he said.

Also, customers will be looking for customized applications to meet specific needs.

Salesforce.com, a software-as-a-service CRM vendor, launched Salesforce Content this month, which includes a software-as-a-service offering called Apex Content that allows anyone in the Salesforce.com ecosystem to create a software-as-a-service application, publish it and share it with others. The technology came from Koral, a content collaboration software provider that Salesforce.com acquired in March.

Steve Fisher, a senior vice president for AppExchange at Salesforce.com, demonstrated how a software-as-a-service application could be built by creating a program to manage employee vacation time during his presentation. The application tracks how many hours each employee is entitled to and has used, plus offers an approval process to take vacation time.

Salesforce.com's AppExchange Web site offers users add-ons to Salesforce.com's hosted CRM.

The IDG News Service is a Network World affiliate.