A managed services provider can support a business enterprise in several key ways. One of the most common is known as SaaS, or software as a service. This type of IT solution is also termed "on-demand software" or an "application service model."
The Need for SaaS
SaaS technologies first began to develop in response to the increasing specialization of software itself. In many cases, highly specialized software needed to run a business enterprise effectively is so expensive that only larger firms can afford to purchase and deploy it on their own.
For small and medium-sized enterprises, a more cost-effective solution is a sort of "subscription" model. In this model, an enterprise contracts with a managed services provider who provides access to the specialized software, commonly over the World Wide Web. Because the enterprise does not own the software, it must pay a monthly or annual fee for access. Since this generally costs far less than purchasing the software package outright, it is usually an efficient way of leveraging financial resources.
Benefits of SaaS
With Software as a Service, enterprises are freed from the need to maintain, update, and upgrade the software package with their own in-house resources. The managed services provider takes on these responsibilities. Because the subscription arrangement often involves the service provider agreeing to keep the software updated, enterprises can rely on always having access to the latest version of a software product at no additional cost in terms of either funds or employee time.
This automatic upgrade feature is becoming increasingly important since new leaps forward in software functionality are happening at an ever-increasing pace.