SaaS vs Typical client/server based softwares

Typical Software (Client/Server):
-- run on centralized servers
-- requires constant maintenance and monitoring
-- cost intensive
-- purchase software package
-- load software onto a server
-- back-up the data
-- personnel costs to maintain and upgrade both the hardware and the software

Software as a Service (SaaS):
-- online solution: customers set up and maintain business intelligence programs
-- accessible from anywhere
-- the provider maintins and supports the program
-- ease of use
-- platform independent
-- Pay per use
-- very attractive to small businesses who may purchase one or two licenses instead of a large expensive name brand package


The typical revenue model used revolves around user licenses. A company will pay a monthly fee for each ID that is able to access the system. This drives a stable cash stream as visibility into renewals is typically very strong. At the same time, some providers are experimenting with the idea of charging for each time a user logs into the program. This may help to land smaller customers who only need a small portion and do not want to pay the full license fee for unlimited monthly access. It will take time to see how many clients adopt this option and what the overall effect to margins and profitability are. Read rest of the analysis at Seekinglpha: Salesforce.com: A Ticking Time Bomb?