SaaS provides a more efficient software application delivery process for ISVs, hosting providers, and end-user customers.

Hosting Providers

As a hosting provider, you can earn 10-50 times more revenue per customer by hosting software applications in addition to infrastructure services. For example, assume you sell $50/month of web hosting to a company with 50 end users. If you up-sell collaboration and and inventory management software, you can easily make $20/person for a total of $1,000 per month from the same customer.

SaaS also allows service providers to attract new customers that need software applications but do not have the IT resources or capital budgets to purchase them.

Independent Software Vendors (ISVs)

ISVs have traditionally had difficulty reaching the small and medium sized business market which is served by hosting providers. The SaaS model provides a new way for ISVs to distribute and market their software.

Additional benefits include:

• Deployment Costs - software can be deployed into a centralized controlled environment which will reduce help desk calls and support costs
• Upgrades - Customers can be quickly upgraded to the latest releases without the traditional hassles of deployment an installation
• Recurring Revenue - predictable monthly payments provide better stability
• Support - deliver support to service providers instead of end user customers
• Markets - reach small and medium sized businesses which may not have been able to afford or had the expertise to deploy complex applications - reach enterprises who may be willing to purchase a few seats to try your software before doing a full deployment

End Users

The benefits to the end user are the main driver for companies changing the way they think about software.

Some of these benefits include:

• Financial Benefits - software expenses are not front loaded and are made up of predicable monthly fees.
• Evaluation - customers can try online demonstrations instead of taking the time and expense to procure server resources to test the software.
• Maintenance - software deployment and maintenance is handled elsewhere - allowing customers to focus on core competencies
• 24 x 7 Support - previously 24 x 7 support involved waking up the IT guy in the middle of the night
• Centralized Data - all data is centralized into one secure datacenter instead of spread through the world on local PCs and servers
• Uptime - server applications are hosted in a datacenter so power outages and Internet outages affect only local offices