How to Define Software-as-a-Service - An Empirical Study of Finnish SaaS Providers

Software-as-a-Service (SaaS) is a relatively new and much hyped model of software delivery where the software is procured as a service over the Internet. We found that there were several different definitions of SaaS. Based on these definitions, we distilled a list of five characteristics that are required for a firm to be considered a SaaS provider. Using survey data from the Finnish software industry, we tested the proposed criteria. Closer examination of the survey indicated the criteria were necessary but not sufficient. Therefore, we extended the criteria to better grasp the phenomenon and tested the changes through a qualitative validation. Also, we found that while a large number of firms are producing software that is technically SaaS, pure SaaS-based business models are much more rare in Finland.

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