Featured Article from Software Licensing

Changing Business Environments Push Shift to SaaS

August 26, 2016

While software-as-a-service isn’t a new business model, it’s one that’s becoming increasingly common in enterprises today for a number of reasons. Companies are trimming their IT departments to be more budget-friendly, and the software subscription model enables them to do so without affecting operations. In fact, by letting the solutions provider worry about installation, troubleshooting and maintenance issues, companies can further scale down their IT department, and control costs better by paying for software only on an as-needed basis. (This is great for companies that scale their manpower up and down dramatically according to seasonal demand, for example.)

Another reason companies are heading to the SaaS (News - Alert) model is because it makes for much easier licensing management, a task that is becoming increasingly complex for the average company that simply wants to focus on their core competencies. According to a recent blog post by Kim Kuhlmann, senior customer advisor for HPE SLMS Hosting writing for the WHIR, moving to a software as a subscription model helps companies that want service providers to act as their external IT departments for business.

One major trend Kuhlmann discusses is Microsoft’s (News - Alert) recent move to offer a monthly cloud-based subscription package for the Windows 10 operating system, a move in part driven by the success of the company’s success with Office 365, which it began offering as a cloud-based service to companies of all sizes several years ago.

“Businesses of every size are shifting many of their operations to the cloud, and everything from content management, social media management, and customer relationship management activities are also now residing in the cloud in a SaaS environment,” wrote Kuhlmann. “This shift also impacts a larger technology picture that goes beyond business use. As more software-based resources move to the cloud, this will further impact the broader spectrum how people, technology and “things” become inter-connected.

In particular, the Internet of Things (IoT) is driving SaaS models, since they are one of the core technologies at the heart of IoT. Interconnected and networked devices coupled with sensors and video can be operated from anywhere, monitored automatically and managed from in-house computers and personal devices. The IoT applies to small personal applications – managing your home’s environment systems or turning on the lights before you get home, for example – and very large operations, such as keeping a bird’s eye view of the interior operations of a large manufacturing or power generation plant.

The number of companies with “no cloud” policies – many of them put in place because of mostly groundless fears of a lack of control over security – is declining. Analyst group Gartner (News - Alert) has predicted that by 2019, more than 30 percent of the 100 largest vendors’ new software investments will have shifted from cloud-first to cloud-only.

“SaaS models tied in with licensing also enable for a more seamless user experience across multiple devices now used in business,” wrote Kuhlmann. “From the laptop to the tablet and the mobile device, a cloud-centric subscription-based access to software enables a seamless experience for the user, no matter which device they’re on, with virtual access wherever they are.”

With companies beginning to see how much time and money they can save by keeping an eye on the efficiency of their workflow, the cloud-only approach will become even more appealing. In a few years’ time, it’s possible that the sight of a shrink-wrapped box of software will be a “remember when” memory as distant as dot matrix printers. 

Edited by Maurice Nagle
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