Asia pacific journal of information systems

The Korea Society of Management Information Systems (한국경영정보학회)
권호 표지

Does the SaaS Model Really Increase Customer Benefits?

  • Published : 2010.06.30
Download PDF
⟨ Previous Next ⟩

Abstract

Software as a service (SaaS) is one of the most-talked about trends in IT. Unlike traditional perpetual licensing model, software applications are sold on subscription bases and services are provided over web by the vendors. It is said that SaaS can make vendors to invest more on R&D than on marketing while offering its customers better quality software applications at lower costs. By empirically comparing vendors providing their software applications either by SaaS or by traditional perpetual licensing model, we examine whether or not SaaS really increases overall customer benefits in terms of cost efficiency, software quality, and customization. We show that SaaS may not provide better quality or cost efficient software applications than perpetual licensing does. Then we provide two practical tools which are useful for customers to evaluate whether SaaS is better than perpetual licensing for the purposes of software applications they want to adopt.

Keywords

References

  1. Calhoun, J. and Chaudhury, R, "Software as a Service: The promise and the pitfalls for traditional software vendors," Oliver Wyman, White Paper, 2008.
  2. Chaudhary, R, "SaaS Security Concerns Are Cynical, Say Experts," cxotoday, available at: www.cxotoday.com/cxo/jsp/ article. jsp?article_id = 73540&cat_id = 908, May 2006.
  3. Choudhary, V., "Comparison of software quality under perpetual licensing and Software as a Service," Journal of Management Information Systems, Vol. 24, No.2, Fall 2007, pp. 141-165. https://doi.org/10.2753/MIS0742-1222240206
  4. Di Bona II, C. and Swanson, J., "Enterprise Software: Software as a Service-The End of Software or its complement?," Black Book-The Long View: U.S. Perspectives, June 2007, pp. 197-202.
  5. Donston, D., "Cleaning up with SaaS," eWeek, May 2008.
  6. Gartner 2008 Press Release, "Gartner highlights key predictions for IT organisations and users in 2008 and Beyond," available at: http://www.gartner.com/it/page.jsp? id = 593207, Jan. 2008.
  7. Gruman, G., "Get smart about SaaS," www.cio.com, June 2007.
  8. Hoffman, T., "Top 10 SaaS Traps," Computerworld, June 2006, p. 46.
  9. Kaplan, J., "SaaS: Friend or Foe?," Business Communications Review, June 2007, pp. 48-53.
  10. Konary, A.M., "Worldwide Software as a Service 2003 vendor shares: SaaS and enterprise ASP competitive analysis," IDC #32055, Vol. 1, Oct. 2004.
  11. Lashar, J., "The Hidden Cost of SaaS," Customer Relationship Management, May 2008.
  12. Moore, G.A, "Living on the Fault Line," HarperBusiness, 2002.
  13. Morris, J., "Sizing up SaaS," Multichannel Merchant, Feb. 2007, pp. 43-44.
  14. Seidmann, A and Ma, D., "ASPs versus enterprise software solutions," Workshop on Information systems and Economics, University of Maryland, College Park, 2004, pp. 11-12.
  15. Schell, E., "Is SaaS for you?," Multichannel merchant, April 2008, pp. 46-47.
  16. SD Times News Team, "SD Times 100: 2008," SD Times, available at: www.sdti mes.com/content/article.aspx? ArticleID = 32189, 2008.
  17. Software-as-a-Service Executive Council, "Software-as-a-Service; A comprehensive look at the total cost of ownership of software applications," White Paper, Sep. 2006.
  18. Software Top100, available at: http:// www.softwaretop100.org/index.php.
  19. Wainewright, P., "How SaaS changes the SI universe," ZDNet, available at: http://blogs.zdnet.com/SAAS/?p = 344, 2007.