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About the On-Demand (aka ‘Software as a Service’) Subscription Model

This is what the experts are saying

From IDC
Over 5% of small firms and over 25% of medium firms plan on adopting at least one SaaS solutioon in 2007.

From Gartner
By 2010, 30% of all new software will be delivered as a service.

From Saugatuck Research
The number of SMB companies using one or more SaaS solutions tripled from 2006 to 2007, growing from 9% to 27%. Only 8% said they had no plans to implement SaaS.

Further Discussion & Details
What it is. . .
Who it's for. . .
How it works. . .
Compared with traditional software licensing. . .
Potential disadvantages of the on-demand software model. . .
Demonstrated advantages of the on-demand software model. . .
The final word. . .

What it is . . .
On-demand software is a model for using software as a subscription service instead of buying the license and installing the application files on a local computer from a CD, or increasingly as a download from a vendor website.

According to technology analyst firm IDC, key characteristics of on-demand software include:

  • Network-based access to, and management of, commercial software.
  • Server management from a central location rather than at each customer site.

Software delivered as a service generally is priced on a per-user basis for each application, with billing managed by a major credit card. Sometimes there are minimum user requirements, minimum subscription time periods, as well as additional fees for setup, extra bandwidth and storage.  Back to Top

Who it’s for . . .
In the business-to-business arena, the on-demand software model is most often focused on the small-medium business segment. Unlike large enterprises, smaller companies have:

  • Little or no staff devoted to information technology, and the employees they do have are often stretched thin and are generalists in their knowledge and skills.
  • Limited budgets, particularly for capital expenditures.
  • More fluid needs for tools and people due to rapid growth and other changing requirements.
  • Greater demands on time, as most small business owners and their employees wear multiple hats.
  • Growing propensity to operate on a ‘virtual’ model, with employees working from home, at remote work sites, or from rented office space that is shared with other businesses.

The flexibility of software as a service is particularly attractive to small business owners –

  • No upfront investment in money or time, and often no contracts.
  • Ability to use powerful business applications without having to acquire the specialized infrastructure and staff needed to manage them.
  • Power to mix and match applications or add and remove users as needed
  • Freedom to work from any location.              Back to Top

How it works . . .
The on-demand software model requires primarily a web browser and an internet connection:

  • The customer goes to a website and ‘buys’ a subscription – generally monthly – to the desired applications and number of users. An account is set up with a major credit card for billing.
  • The person who places the order (who generally becomes an administrator) is given login credentials and a web URL for secure access to the application.
  • Every user added to the account receives his/her own log-in credentials granting them web access to the application(s) for as long as needed and as long as specified terms are met.

Most on-demand software vendors provide a secure web portal with additional services such as support, along with administrator access for changing the number of users or applications and maintaining other account information.  Back to Top

Compared with traditional software licensing . . .
Using an application as a service has the same look and feel as if using it from a local PC or server, particularly with today’s fast and reliable bandwidth. Performance and availability generally are outlined and guaranteed by a Service Level Agreement (SLA).

  • Traditional software is purchased as a license, with the application files delivered on a CD or downloaded from a website. As a license, what is purchased is the right to use the application, either by one user or on one computer.
  • The buyer is responsible for ongoing management such as backups, patches and upgrades. Most software vendors offer annual maintenance fees and/or upgrade pricing for existing customers.
  • There are no refunds for software no longer used or wanted.

Potential disadvantages of the on-demand software model . . .
Some companies wish to keep all software and hardware under internal control. They want to be able to ‘see and touch’ the hardware.

  • Companies with unique requirements or a need for significant customization may not be able to utilize the model.
  • The concept of renting is not popular with some business owners who prefer ownership, or who have had bad experiences in the past.
  • Owning is perceived to be less costly than renting.                                             
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Demonstrated advantages of the on-demand software model . . .
Since nothing resides on a single hard drive (with a few exceptions in which files must be installed locally), the application can be used from any internet connected PC, providing greater flexibility.

  • With pay-as-you-go terms, you pay only for what you use.
  • You’re never locked into a license, so there’s no obsolescence and no buyer’s remorse if something doesn’t work out the way you thought it would, or if requirements change. While purchased software cannot be returned, software subscriptions may be cancelled.
  • Reap the productivity rewards from an application whenever you want, without a commitment or big upfront investment in money or an evaluation process.
  • Add or remove users as staffing needs change and applications as business needs change.
  • Predict and budget how much you will spend, and move the cost from a capital expenditure to a business expense.
  • Redirect financial resources, people and time for other needs and priorities.

The final word . . .

  • On-demand software vendors manage software as a core business with experienced, dedicated staff in professional data center facilities.
  • Security, redundancy and resources are equal or superior to those of the largest, most sophisticated enterprises. With today’s security threats and the growing importance of information technology for productivity and competitive advantage, robust facilities are moving from ‘nice to have’ to ‘must have’.
  • Bandwidth has become readily available (particularly with the growth of wireless) and highly competitive, making it more dependable as well as less expensive. Today, homes and offices are routinely equipped with high-speed, broadband internet access.
  • You will have one less thing to worry about. No servers, systems or software to install, administer, backup, protect and upgrade.

This paper has been brought to you by Workplace2go, providers of name-brand business software to small-medium companies, available over the internet as a subscription service.

For more information, visit us at www.workplace2go.com or call us at 800.487.0044.

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©2008 Workplace2go

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Related Links: Workplace2go || On Demand Software || 19 Marketplace || Podcast Directory || Keywords: Managed Services, Workplace2go, On Demand Software, 19 Marketplace, John Krzykowski, Mike Regan, IT Budget > Bytes: 11400989 LISTEN 10/13/08

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ICON Venue Group is an owner's John Krzykowski,  19 Marketplacerepresentative and their specialty is professional stadiums and arenas all over the world. John Krzykowski, General Manager, Denver of 19 Marketplace interviewed Melissa Heiter, Director of Marketing and Communications for the ICON Venue group. ICON had some challenges along with their phenomenal growth the past 3.5 years. Back then, they were using a POP 3 email service. Melissa went onto say, “We now have 33 people in our organization and with everyone being on the road our main form of communication being email, we had two main challenges. One, with the POP 3 system, we didn't have any data backup. The next challenge was the natural limitations of a .pst file in Microsoft Outlook in that it has a 2 Gigabyte limit. When your main form of communication is email and you're dealing with architectural drawings and pictures that happens to fill up very, very quickly. We needed data backup ability and also flexibility as to how large our data files could be. I didn’t want the added cost of the hardware, I didn’t want to manage the warranties and I didn't want to manage another person. I wanted somebody else to do all of that for me, which is why I looked for an exterior, hosted solution and why I found 19Marketplace. Listen for some great lessons for all of us.
Related Links: ICON Venue Group || On Demand Software || Workplace 2 Go || 19 Marketplace || Keywords: Melissa Heiter, ICON Venue Group, John Krzykowski, On Demand Software, Workplace 2 Go, 19 Marketplace, > Bytes: 9143173 LISTEN 7/21/08

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Related Links: Green: Workplace to Go || 19 Marketplace || Conscious Economy Channel || On-Demand Software ||
Keywords: John Krzykowski, Linda Cramer, 19 Marketplace, On-Demand Software, Going Green, Sustainable Bytes: 18999257 >

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John Krzykowski, GM, 19 MarketplaceBuying software is being turned upside down and inside out. Getting stuck with something you can't use and not having customer support is something of the past. John Krzykowski, General Manager of 19 Marketplace clarifies some of these new and exciting ideas and applications. For the past couple of months, w3w3’s On-Demand Software channel referenced Workplace2go which is 19Marketplace’s retail brand. 19Marketplace provides a convenient mechanism for businesses to buy and, more importantly, use on-demand services. They also have a partner program for companies interested in offering on-demand software to their customers. Partners can either resell 19Marketplace’s retail brand, Workplace2go, or offer the services under the partner’s own brand. LISTEN 1/21/08

Related Links: Workplace to Go || On-Demand Software || Partner Website || Store Front || InfoWorld News || Keywords:WorkPlace to GO, On-Demand Software, 19 Market Place, John Krzykowski, Software as a Service, SaaS > Bytes: 25315268 LISTEN

414_John Krzykowski, GM WorkPlace to GO Competitive Advantage: Getting What You Want, When You Want It

Clients and customers today are expecting (demanding) relevant response time to questions and problems points out John Krzykowski, General Manager of Workplace2Go. There are a lot of hassles, installing the software – updates – the hardware goes bad, something breaks, you’ve got to bring in something new – reload all the software onto that new device. It’s a lot of expense that isn’t really necessary and there are alternatives. There is quite a history about different attempts to solve this challenge. John says there is quite a buzz about On-Demand Software, (aka: Software as a Service - SaaS) and higher software costs, upgrading necessities, down time and consumer demand are pushing this to the next level. With Workplace2go, subscribe to a name-brand business software and be free to use it from any internet-connected PC, plus: Pay only for what you need as long as you need it. One log-in, one support call, one credit card for billing. Leave upgrades and other software management headaches to us. No contracts, No minimum order, and first month free. John also they seeing in the venture capital community, that well over half the software companies that are receiving money are in the on-demand space. So the merchandise, if we use the retail analogy, is going to grow significantly. Information is the foundation for many businesses and the ability to access information from any location is critical in today’s highly competitive environment. Whether your employees are on the road or working from home, they need secure easy access to information.
Related Links:  
Workplace to Go || 19 Market Place || Computer World || INC || CIO - SaaS || Keywords:WorkPlace to GO, On-Demand Software, 19 Market Place, John Krzykowski, Software as a Service, SaaS >> 11/26/07 Bytes: 26486390> LISTEN

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