To understand the concept of software in cloud, and the SAAS model, we need to look back in time. Around 15-20 years back, if a company wanted to use a software or application, it will have to first install a server rack in its premises. Then buy the licensed software in the form of DVD or CD, and get it configured. Additionally, the company will also have to buy license for operating systems like Linux or Unix. Having such vast technological setup would mean, appointing a resource to supervise the smooth running of the server and the software. Sometimes servers may stop working, in such cases there should be some technical resource who can help the users take back up, and bring the server back to life. Similarly, the software can sometimes have a bug that needs technical assistance, or it needs to be re-configured after upgradation. In all such scenarios, a permanent technical assistant should be present at the company’s premises for taking care of all the technical hurdles. All these complications restricted the use of certain software or application to large enterprises, who had the budget and scale to justify the expenditure.
However, with communication technology taking a leap, 2 interesting developments took place:
Cloud Model Came into Existence
Amazon Web services revolutionized the concept of Cloud computing. The company started putting large number of servers in huge data centers, and companies could rent a part of the server from Amazon Web Services. This implies that instead of buying and installing server on their premises, companies could rent a slice of the server from Amazon web services and pay a fixed rental. For example, a company can rent a piece of the sever with Linux Operating System, with 16GB of RAM, and 100 GB of Hard Disk. So now any small, medium, or large enterprise could buy server space on Amazon Web Services without spending exorbitant amount.
Internet Speed Increased Tremendously
The speed of internet has tremendously improved over the last two decades. Around 15-20 years back, the speed of the internet used to be 250 kbps – 512 Kbps. The present day internet speed has significantly jumped high and even a small business or home set-up, in not so developed parts of the world, are using minimum 10Mbps – 50 Mbps. Fiber optic cables are widely used all over the world further improving the quality of internet connection.
SAAS Market Size from 2015 to 2020 (projected)
Emergence of SAAS (Software as a Solution) Model
With the arrival of Cloud Model, and improved internet speed, the model of SAAS (Software as a Service) evolved. Under this model, companies like Solastis, develop the software, install it on Cloud, and offer business on multi-tenancy approach using AWS. Under the SAAS model, the customer need not take the trouble of setting-up additional infrastructure, or managing the technical upkeep. The customer can simply subscribe to the software available on cloud, and start using the application. The software service provider will take the full responsibility of the upkeep and smooth running of the software. SAAS model has also helped in bringing down the overall cost of software for the end business user. The customer only has to pay a fixed subscription cost, under which the technical assistance will also be taken care of.