Software as a Service took a while to get off the ground, but began gaining momentum in 1999. To begin with it was prevented from becoming as reality by software licensing.
Most EULA’s was designed to cover the rights of the holder while the software was installed on a particular system. To begin with, software was specifically per seat or individually licensed per copy. It took a while for software companies to come around to the idea of their software living in the cloud instead of on individual machines.
The limitations of this are that the software on a machine is only worth anything while that machine is switched on and working. In a company that has shifts or layered working hours, that meant an inefficiency unless desk sharing was implemented or PCs were shared throughout the day. There was a move to move this halfway to the cloud by allowing other people to use the license while the machine was unattended, but this led to security concerns, and higher power bills.
The first truly cloud friendly software was Unix based. Its licensing is completely different from that of commercial software so could be easily adapted for cloud computing. This success woke the other software vendors up to the possibilities of Software as a Service as well as a product and the SaaS movement began gaining ground.
Soon SaaS technology was being improved and software was being designed specifically to leverage the advantages internet based applications had. They became compatible with all browsers, lightweight to make them faster over a network, and modeled so the bulk of the work was done by the server hosting the application, not the client using it.
This led to a significant sea change in the way software was designed, built, licensed and purchased. EULA’s changed to include Software as a Service and different pricing models soon evolved to make the most of this new opportunity.
Email hosting was one of the first applications to truly make a significant impact on the SaaS business model. The very nature of existing email architecture meant it lent itself well to being outsourced and hosted elsewhere by a vendor. The email client could be web based like many existing free email suppliers, like Microsoft and Hotmail.
This new market gave software vendors something new to exploit while benefiting businesses at the same time. Smaller and newer businesses could save the capital earmarked for IT infrastructure and instead use it as start up capital. They no longer needed thousands of dollars worth of equipment to have basic functions, they could use an email hosting plan and have all the benefits without the upfront costs.
The benefits were soon realized, and the hosted model became more and more popular, so much so in fact that it spawned its own industry and set of monikers like “cloud computing.”
Email hosting is just one of the applications that are ideally suited to a hosted model, there are many more such as accounting, word processing and other productivity tools. As long as the innovation keeps coming, Software as a Service is going to get stronger and stronger.
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