When the first providers of hosted software came upon the scene a number of years ago, the traditional vendors of software scoffed, believing that these Software as a Service (SaaS) providers would not make any dent in their share of the market. They did not understand the concept that hosting softwares could be offered over the Internet on demand for a small monthly fee. In the event, they turned out to be absolutely wrong. The number of organizations and businesses that use hosted software has steadily grown over the last few years, particularly among small businesses. The most popular hosted softwares are those for project management, marketing, time and billing, financial and accounting, merchant services, CRM, inventory management, payroll, and messaging. Here are some of the many benefits which accrue by switching to the SaaS option.
The chief benefit is that the provider, rather than the client, is on the hook. It is the hosted software provider who is responsible for installing and managing the hardware and software components of the particular application. This includes managing such network issues as data backup and redundancy to facilitate disaster recovery. The vendor is also responsible for managing the data center which delivers the application, and for automatically upgrading the software on a regular schedule, as well as in response to the client's changing needs. In short, it is the fully hosted SaaS solutions provider who has to worry about the headaches of ungoing system maintenance, as well as equipment costs and time and money spent in IT support. This is the chief advantage of hosted software for the client. Hosted software is rented for a set cost per user per month. To purchase software outright – even for small organizations and businesses – can cost thousands or tens of thousands of dollars in hardware, implementation fees, maintenance, support, and service. By paying one predetermined monthly fee, the client sends zero dollars on maintenance, support, or administration costs. Moreover, hosted solutions are designed to scale for many simultaneous users, so it is easy to maintain levels of performance and uptime as a business grows, and as the volume of stored data expands. On-premise software solutions can be major headaches, incorporating additional cost for skilled IT personnel, software licenses, hardware and other infrastructure. By contrast, upgrades for hosted software are made automatically as they become available or as the client's needs change. Since the software is delivered via the Internet, hosted software application upgrades can be immediately supplied to clients by the provider. By contrast, traditional software providers upgrade software sometimes once a year, if that often; and clients have the responsibility of reconfiguring the software and paying for the new version.
Another advantage of hosted software is that it is accessible from any Internet connection in the world, so that users in different parts of the country, or even different countries, can instantly access the same information in real-time. This saves delays in synchronizing changes off-network, as is typically the case with on-premise or client-server solutions.