It’s a software…it’s a delivery model…wait, it’s’s SaaS! Yes, I’m talking about the revolutionary SaaS (software-as-a-service) technology. It has now become the standard software delivery model for numerous business applications. It is generally referred as the on-demand software. It is a software delivery and licensing model that provides access to software and related components on a subscription basis.

In recent years, it has become one of the most trending topics in the IT sector. Business officials have been opting for this technology to manage their business applications. You must be wondering though:

Why this technology is such rage among the company owners?

One of the main benefits of SaaS lies in its ability to provide cost-effective solutions to its users. Also, it provides easy accessibility to the software. Nowadays, the internet is flooded with news regarding SaaS and numerous innovations related to it. It is a common human tendency to know more about anything that is popular or useful. We, instigated by our curiosity, have to understand the past of this technology for better understanding of its present and the future. So, the important question that arises is:

How did SaaS come into existence?

To answer the above question, we have to go back to the 1960s when IBM and other service providers were focusing on developing a system for centralized hosting of business applications. They were operating a service bureau business that was known as utility computing.

This system was developed by the IBM, and it went through a continual development phase. The SaaS we see today is an ocean but at that time, it was no more than an oasis. Then came the 1990s when the Internet was gaining popularity. The Internet spread like a forest fire in many nations. Its expansion led to the birth of a new class of centralized computing known as ASP (Application Service Provider).

In the year 1999 (the golden year in many aspects), broadband was introduced. With the broadband, it became easy for the application service providers to implement cost-effective models for their clients. The main goal for the ASP vendors was to reduce the total cost through central administration.

Finally, SaaS was introduced as an extension of the ASP model. It was more commonly used for specific settings. With the growth of server virtualization in the 2000s, SaaS technology further developed. At present, it utilizes multi-tenant architecture that can provide services to multiple users.

Blast from the Past: The SaaS acronym was first used in 2001. It appeared in a white paper called ‘Strategic Backgrounder: Software As A Service’ published by SIIA’s e-Business Division.