Cloud computing is the latest buzzword. But small-time business operators are wondering if it will be useful and affordable. For them, the answer is a “software as a service” (SaaS) delivery model built into cloud computing.It is a relatively new model of software deployment. Typically, here an application is hosted as a service provided to customers across the Internet. This model eliminates the need for installing and running the application in the customer's own computer, and also the burden of maintaining software, operations and support.While the first revolution of the Internet saw the three-tier model emerge as a general architecture, virtualisation in clouds has created a new set of layers such as applications, services and infrastructure. These layers do not just encapsulate on-demand resources, they also define a new application development model. There are three layers — SaaS; the middle layer, known as platform as a service (PaaS); and the lowest layer, infrastructure as a service (IaaS).

Perfect for small firms

www.salesforce.com is a good example of SaaS. There are many others, including Google Apps, offering basic business services such as e-mail. While cloud computing is considered a boon to large and mid-sized players, the neighbourhood pop and mom stores are waiting for a technology or solution that can help in cost-effective and efficient business.

Business Intelligence (BI) software is making inroads into the small business area, and new technologies like SaaS appear perfect for smaller firms.According to Niraj Jaipuria, founder of BI Retail Ltd, these management software solutions help retail outlets, providing information and data on bill collection, customer trends, inventory management, product display and sales patterns. Today, these BI solutions are routed through cloud computing's SaaS delivery model, and as a result, are entering the small business area. New technologies such as SaaS help small firms save money by having a *host' somewhere in cyberspace rather than being present in the physical firm. The inherent ability of SaaS to reduce price points to fractions is what is working to its advantage. The use of SaaS can also reduce the upfront expenses on software purchase, through less costly on-demand pricing. End-users may thus reduce their investments in servers and other hardware, says Mr. Jaipuria.

HR solutions

Human resource solutions created by Adrenalin eSystems Ltd are also marketed through the SaaS delivery model in cloud computing. According to its chief executive officer and managing director, the HR department in every company is expected to take on the role of process owner on behalf of the leader and facilitate this across the organisation. The HR department is also tied down to mundane administrative activities. Thus, there is a key challenge faced by the HR head — to use human resource solutions to help the organisation do the needful. Such a solution for a small and medium enterprise (SME) could prove expensive. But implementing it through the SaaS delivery model could be cost-effective.

Today, most of the mid and large-sized companies are using HR solutions through SaaS, says Mr. Ganesh.According to a Springboard Research (January 2009) report, “software as a service in India” is set to register a compounded annual growth rate of 76 per cent between 2007 and 2011, and reach $260 million by 2011. SaaS-based ERP and CRM solutions are likely to see the highest demand in the country.The cloud computing model is even more important for 35 million small and medium businesses (SMB) in India that are looking for easy-to-use, reliable and scalable applications to enable good business growth. Cloud computing allows SMBs to embrace enterprise-class business applications without buying or maintaining hardware, software or data centres, says Peter Coffee, director, Platform Intelligence at Salesforce.com.

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