The Influence of Software as a Service on the underlying development methodology

The shift from traditional on-premises software to on-demand solutions, described as Software as a Service (SaaS) is resounded throughout the land. Market studies report a growth of top 20 SaaS companies revenues up to 50% over the past 3 years and identify it as a soaring growing market within the IT sector in the next years (Dubey, Mohiuddin, Baijal, 2008). In addition big players like Microsoft or SAP can be observed entering the market. But why is Software as a Service that successful? According to a lots of authors it is because of a huge amount of advantages in comparison to traditional on-premise software for software developers as well as for customers. Some of the possibilities for software developers are the achievement of economies of scale, economies of aggregation and economies of scope (Lassila,2006), the opportunity to reach a completely new customer base through new innovative offerings (Carraro and Chong, 2006) or the decoupling of the Independant Software Vendors income from their release cycles with the shift to SaaS licensing models (Choudhary, 2007). Opportunities on the customer site for example are the reduction of the total costs of ownership (TCO) or the concentration on the core business instead of running an own corporate IT. It is obvious, that any software house developing a SaaS offering wants to achieve as many advantages as possible. This motivates this research of the influence of SaaS on the software development process.




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