Qualified Address is excited to offer the first on-demand mailing software in its industry. We are convinced that this is the software model of the future, and have found that mailing software translates very easily to an on-demand model that you will love.
I was just reading a 2005 Forbes article by Fahmida Y. Rashid on SaaS software. Although the article is a few years old, I think that she gives a pretty good case for why it makes business sense to go with on-demand software as opposed to corporate software.
First, she explains the difference between the older software and the newer on-demand software:
With software as a service, customers "rent" software for a set period of time, paying a subscription rather than buying the technology outright. Rather than 'spending millions to own technology, customers pay a small amount up front and a monthly or annual subscription fee based on usage, users, or customers, leaving the provider to handle maintenance and performance concerns. The method is also called "software on demand."
Rashid then continues, explaining one of the main benefits of on-demand software--no annual maintenance fees:
"Most corporate software is still installed and managed at the customers site the old fashioned way, with software licenses requiring a hefty annual maintenance fee. However, vendors are finding it increasingly difficult to convince customers to dole out millions (plus millions more in maintenance) for large and complex applications, especially amid a growing perception among customers that they are using only a fraction of the softwares capabilities.
Another benefit that customers enjoy with SaaS is the constant addition of new features. At Qualified Address, we have added new feature upgrades to our software almost monthy. Most of these features come at the direct request of our customers. Rashid describes this as "leverage over the vendors." We like to call it good customer service.
The IDC report noted some reasons on-demand vendors have been successful in entering the software market. While long-term costs may add up, the up-front cost of a subscription is significantly less, and customers have leverage over the vendors, because the provider must constantly prove the value of its product.
You can read the complete article at Forbes.com .