Software as a Service versus Software Applications

In an earlier post, Software as a Service: Are we the telephone company?, I noted that although Software as a Service (SaaS) is all the rage, Autodesk solutions like Buzzsaw, Constructware, and Streamline have been offered as services for years. So with all this buzz about SaaS, what makes software a service? The lines between software application and software service are very blurry:

Delivery

• A software application is typically delivered on a CD. Sometimes it is downloaded via the web. Once acquired via CD or download, it is installed.
• A software service is typically delivered via the web. Often times an install is not required. Our newest SaaS offering, Autodesk Freewheel, allows our customers to view and print 3D and 2D design data without installing additional software; however, not requiring an install is not always the case. The Buzzsaw and Streamline services provide an application, ProjectPoint.exe, that is downloaded and installed. The ProjectPoint application provides a richer Buzzsaw or Streamline experience than using just the browser alone. So although SaaS often avoids downloads and installs, it does not have to.

Pricing

• A software application is typically purchased at a one time cost. Autodesk originally offered its applications in this manner. Now more and more Autodesk customers obtain their original versions and updates through subscription methods. These methods allow them to budget their software expenses in advance and amortize their costs over the duration of the subscription. Software applications are typically sold on a "per seat" basis. When an additional user needs the application, another copy is purchased.
• Software services are often sold based on usage. There is no seat to install. For example, Buzzsaw and Streamline are priced based on sites. A site is a collection of users, access rights, files, and forms-based processing typically centered on the successful completion of projects. A site is priced based on its disk space usage and number of members. With regard to Software as a Service: Are we the telephone company?, it sounds like the old long distance pricing - right? Well not exactly. The number of people who can access the site is capped at a site limit. When an additional user needs to access the site, no additional fee is charged until the site needs to set its cap at a higher limit. So it's really more like a cell phone plan where a number of minutes are purchased based on expected usage. Just like cell phone plans do not charge more unless you exceed your minutes (or text message count in the case of teenagers), a Buzzsaw or Streamline site does not incur additional charges unless you need to increase your disk quota or increase the maximum number of allowable site members. Autodesk Freewheel is a free service, so the question is moot!

Updates

• When newer versions of a software application are released, the new version is installed to replace the existing version. In some cases, this requires the work of an IT department.
• Software services are often based on servers. As newer versions of the service are released, the server is updated. Users of the service merely access the service as they have been and reap the benefits of the updated version. In these situations, an IT department is typically not involved.

Access

• As noted by Autodesk Labs Software Developer and Evangelist, Gyorgy Ordody, a software application is typically limited to a set of specific platforms. These are spelled out in the system requirements.
• Software services are often based on browser software. Hence they have less restrictive system requirements and are often able to reach places like Microsoft Windows, Apple Macintosh OS X, Linux, and cell phones.

At Autodesk, we're not myopic to the fact that customers want solutions - not necessary software applications. When you buy a drill, you don't want a drill. You want holes. When you buy a software application, you want the value that it provides. If this can be provided as a service instead of an application, so be it. So SaaS is just one of the ideas that's alive in the lab.