There’s a strong movement towards Software as a Service (SaaS) now as being more cost-efficient than traditional software licensing. In SaaS, the software provider develops, hosts and operates a web application over the Internet (A third-party provider may host and operate the application.). Customers use, but do not own, the application. It is a subscription model that may generate recurring revenues for the provider.
Here are some resources to learn more about software licensing and SaaS:
* Eric Esperne of James River Consulting wrote an article for Mass High Tech that discusses the pros and cons of SaaS compared with traditional licensing, Is SaaS Really Better Than Software Licensing? He offers a more detailed white paper, Is SaaS Really Better For Business Than Software Licensing?
* An article from McKinsey, Delivering Software as a Service, includes a discussion of the economics and total cost of ownership of SaaS.