Our Delivery Model

Our Delivery Model

A delivery model refers to the approach taken to deliver enterprise software. It is usually used when referring to a software application. There are three primary delivery models for enterprise software:

(1) licensed model in which a customer purchases software and owns it;

(2) SaaS model in which the customer puchase the software, and the supplier runs and updates the software, providing the software as a service offering rather than as a product; and,

(3) hosted model in which a customer purchases or leases the software, and a third party runs the software for that customer. The hosted model varies from the SaaS model in that hosted customers still own the software and it is the third-party company that provides the service. In the SaaS model, the software itself is designed for use by many companies at once (called “multitenant”) and the service is provided by the software vendor.

Software as a service data escrow is the process of keeping a copy of critical software-as-a-service application data with an independent third party. Similar to source code escrow, where critical software source code is stored with an independent third party, SaaS data escrow is the same logic applied to the data within a SaaS application. It allows companies to protect and insure all the data that reside within SaaS applications, protecting against data loss.

The relatively low cost for user provisioning (i.e., setting up a new customer) in a multi-tenant environment enables some SaaS vendors to offer applications using the freemium model. In this model, a free service is made available with limited functionality or scope, and fees are charged for enhanced functionality or larger scope. Some other SaaS applications are completely free to users, with revenue being derived from alternate sources such as advertising.

A key driver of SaaS growth is SaaS vendors' ability to provide a price that is competitive with on-premises software. This is consistent with the traditional rationale for outsourcing IT systems, which involves applying economies of scale to application operation, i.e., an outside service provider may be able to offer better, cheaper, more reliable applications.