In what some are calling a significant sign of the times in the software industry, OpSource, a SaaS (software as a service) infrastructure provider, will announce this week the Incubator Program, one of the first such initiatives to help startups deliver their applications using the SaaS model.
The OpSource Incubator Program for future service providers will include a fully functioning SaaS infrastructure guaranteed with 100 percent uptime, system monitoring and access to around-the-clock technical support for six months at no charge.
According to Treb Ryan, CEO at OpSource, the process of creating applications that use the SaaS model is a challenge to many developers who are used to the traditional development cycle that ends with putting the application on a disk and shipping it out.
"New software companies struggle almost as much with SaaS as they do with creating packaged applications," Ryan said.
On the business side, one of the key issues of a SaaS delivery model for those that provide it is the cost of the infrastructure.
Although SaaS requires costly hardware and software that scales to the enterprise level, the business model will pay back the investment in low monthly fees based on a per user, per month basis, which means that payback comes in years rather than in months of the conclusion of a deal.
Therefore, the key driver for startups using a provider such as OpSource whose main business is supplying the infrastructure, maintenance, and call center support, is a reduction in its cost of operations, Ryan said.
"Because I have the platform, I can get SaaS providers the margin they need earlier in the development cycle," Ryan said.
The incubator program may not be the first, but most industry experts, including Erin Traudt, SaaS research analyst for IDC, were hard-pressed to name another provider.
"I'm actually not familiar with another program that resembles Incubator," Traudt said.
SaaS solutions are on the fast track to adoption by many enterprise level companies, Traudt added.
"According to our research, 79 percent (of 512 IT professionals surveyed) have purchased or are in the process of reviewing a SaaS offering," Traudt said.