E-MailAdopting the SaaS Model: A Client Perspective
The enterprise software market is seeing the rise of a new business model -- software-as-a-service (SaaS), under which the software is owned and managed remotely by the vendor and delivered as a service over the Internet. The application is based on a single set of common code and data definitions and distributed in a one-to-many manner to all customers (e.g., Salesforce.com's service model). This emerging market has seen double-digit growth for the past three years, and is projected to surpass US $5.7 billion in revenue in 2007. 1 The trend is gaining so much momentum that Merrill Lynch software analysts have come up with a new method of assessing and valuing software companies, the On-Demand Index, 2 which takes into account the growth in deferred revenue that results when vendors use subscription-based licensing.
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