The SaaS (Software-as-a-Service) concept

The SaaS (Software-as-a-Service) concept has appeared recently, being discussed widely over the last several years. Unlike the standard approach to using software, when the application is installed directly on the user's computer, SaaS means that the software or its components will be installed on the provider's server. The clients access the software through the Internet and pay for it on the subscription basis (e.g. monthly).

Before SaaS appeared, the most popular concept for outsourcing IT systems maintenance was hosting (the client buys the software and the software is installed on the provider's server). But now when the biggest software vendors has changed their licensing policies, businesses gained the opportunity not to buy software, but to rent it. Instead of buying a system, hardware for the system, and hire staff to support the system, the client can just turn to a provider and use his system that is customized according to his needs, for a monthly fee

Calling rate and operation speed of the system influence the price of SaaS. The price variety is determined by the fact that the service provider uses different infrastructural basis and software depending on the demands of the customer.

Service Level Agreement (SLA) and the Service Implementation Agreement (SIA)

One of the key roles in providing the SaaS service is given to the Service Level Agreement (SLA) and the Service Implementation Agreement (SIA). SLA agreements describes all aspects of the provided service, such as requirements to the system, time that the system will need to perform the operations and a lot of other important moments. SIA describes the obligations of the provider to analyze customize and optimize the system according to the needs of the customer. SLA documents responsibility of the both sides: the client needs to describe the service that he wants to get and the provider takes the obligations to provide the described service.

SLA and SIA are especially important if the system should manage big amounts of information and the necessary response time is just several seconds. SLA is especially important if the system should manage big amounts of information ant the necessary response time is just several seconds.

Advantages of SaaS service + ERP systems

If the client wants to implement an ERP system, then he would have to buy licenses, equipment and pay for the system customization. If using SaaS, the client has to pay only for the customization services.

The main advantage of SaaS is its price. The monthly fee for renting a 50-user ERP system will be the same as if you bought one ERP system user license.

Other advantages of SaaS:

• No need to purchase the system
• No need to buy the hardware for the system
• No need to hire and hold staff to support the system
• You can use the system for a rather small regular monthly fee
• The amount of the service can become bigger or smaller if the requirements of the customers change.