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However, the customer relinquishes control over the evolution of the software (upgrades happen when
the SaaS vendor decides they should happen, whether or not it‟s disruptive to the customer). The cost
of the application itself is an ongoing expense as part of the charge from the vendor rather than a onetime
up-front cost. The cost of operation for the application is an ongoing expense, which may or may
not be an advantage depending on the organization‟s current technology mix.
SaaS is considered a low-cost way for a business to use commercially licensed software without the
associated high initial cost or manpower requirement. Applications that aren‟t mission critical but are
processing heavy are good candidates for SaaS implementations. Organizations are looking to SaaS
vendors to supply services for customer relationship management, videoconferencing, human
resources, e-mail, and call centers. An earlier model of deployment called application service
providers (ASPs) also provided such services but were client-server implementations.
The downside of using an SaaS software solution is that the firm is placing its destiny in another
company‟s hands and is dependent on that company‟s security and financial health. The upside is that
the firm is not responsible for purchasing the application, maintaining it, and having to provide the
computer power to process the data.
Open Source Software
The idea behind open source software is to develop software that makes its source code freely
available for use, change, and/or distribution. The Open Source Initiative determines whether software
can be considered open source, the major criteria being access to the source code itself and free
redistribution of the source code itself. (Source code is the code that is translated into what the
computer‟s CPU actually needs to do, which is called machine code.) Organizations have been slow to
adopt open source software, worrying about the support, reliability, and viability of such products. The
success of UNIX has begun to dispel these fears. Organizations are saving billions of dollars a year by
installing open source software rather than licensed software.
Open source development has produced reliable and high-quality software quickly. There are many
independent programmers testing and fixing bugs. Programmers can build custom interfaces and add
new abilities. Organizations can adopt these new features as they see fit—they basically plug into
existing source code. Larger successful projects enforce rules to facilitate teamwork and ensure system
testing and documentation. Open source software does have its critics. Open source may allow hackers
to determine weaknesses in the software. It is hard to build a sound business model around the open
source development process, thus raising concerns about viability into the future.
Networks and Communications
It is becoming increasingly common in industry to create virtual wide area networks using multiple,
interconnected local area networks. These networks also connect the older mainframe and midrange
computers that industry uses for its older legacy systems to the client terminals on the users‟ desks.