There are many words and phrases associated with Software as a Service (SaaS), including .net (dot net), hosted services, managed services, web-native, web services, browser based software, remote access software and outsourcing of IT. Whilst coming to the topic from somewhat different angles, all these phrases are really referring to the same central theme – that the software you use can belong to someone else and can run on computers somewhere else whilst still enabling the “job” to be done.

You do not pay to own the software but rather to use it, over the internet. The availability of fast, cheap and reliable broadband is a key to these new types of development; without it, there would be no SaaS.

Costing may be based on a usage model or on a flat rate or on some combination of the two but SaaS will in any case be cheaper for the user initially, requiring little or no capital investment. In addition, the need for IT staff and expertise can be greatly reduced since upgrades and “patches” are installed by the SaaS provider and fewer computers are needed in house.

Another advantage, for smaller firms in particular, is that they can use the same software as their larger competitors without the major up-front and ongoing costs they would have had to absorb in the past. Subject to the nature of their contract, they can also decide that they do NOT want to continue with particular software, after a period of using it, which would otherwise be a massive cost and disruption.

A different type of advantage relates to power use and environmental concerns; the power consumption of a shared facility will be considerably less than an in-house facility with its own multiple processors, cooling, back up facilities. emergency power generators and so on. As the costs of power go up, this cost advantage will become more pronounced.

There is also an advantage for the software supplier since each individual user does not need to have the system installed on their premises, with attendant requests for special features and training generally. The costs of installation at multiple premises is a major cost (and problem) for most software suppliers.

There is yet another advantage of SaaS is in terms of Business Continuity; the larger companies providing the services with multiple users can afford a higher level of physical security as well as multiple levels of back-up and extra hardware, “just in case”.

Service-level agreements (SLAs) generally govern the quality, availability, and support commitments that the provider makes to the subscriber.

Freedom to work anywhere, as illustrated by e-know.net.

Methods of hosting

SaaS can be run in two main ways:

(1) The software supplier can host the application themselves, perhaps with other standard Microsoft applications as well, so that the user can achieve an overall software service; legal software companies doing this include:

• Pracctice, with Osprey software, which has been providing hosted practice management for 4 years; they were probably the first company to bring in a .net system;
• Quill with Pinpoint Legal, with 10 years experience of providing an online service (the .net version is more recent). There are 200 practices using their services and Quill can provide a cashiering service as well if required;
• DPS are now installing most of their smaller users as SaaS users, with servers based on the DPS premises and collocated (backed) up at Telecity;
• Mountain Software with Meridian Law Connected, the leading Chambers system now available over the web as SaaS. (Mountain is now part of the Iris Group).

(2) A third party can host the software, ie neither the supplier of the software nor the end user but a “Managed Service Provider”, “SaaS Facilitator” or “Managed Hosted Services Provider” (all theses terms mean essentially the same thing). This is a major service company that hosts software from a number of “Independent Software Vendors” (ISVs) and supplies the services to the end user. Examples include:

• e-know.net which hosts applications for Axxia dna practice management as well as Microsoft Office products and around 100 other software applications (non legal) for other customers.
• 7global which hosts applications for LexisNexis Visualfiles as well as many non-legal software suppliers.
• ADSPortal which hosts the SOS practice management system Virtual Practices. ADS Portal will also host a customer’s own choice of software applications in an “online desktop”; virtual solicitors firm NetworkLaw use ADS Portal to host their software.

Other types of software can be hosted in various ways. Tricostar have recently won an award for deploying their web-based time recording and file matter management software across the legal departments of County, Borough and District Councils in Suffolk – large and small councils, all using the same hosted software to manage the legal work they do. Where the servers are located is becoming almost irrelevant for the users.

Past coverage of SaaS

In this newsletter, we have been covering SaaS (under various names) throughout 2007. You can find all these articles under the index subject Software as a Service.

In the March/April issue, Steven Bradley of Chambers Technology Support, a company which facilitates outsourced IT for Chambers, asked “Who needs an IT Department?” He described how many IT services are already outsourced via the internet including web site hosting, e-mail hosting, chambers and practice management, telecoms provision and typing and dictation.

Also in the March/April issue, I covered some of the accounts and practice management systems which can now be outsourced, including Quill, Pracctice and SOS, as well as case management by ConveyanceLink and EasyConvey.

In the May/June issue, Charles Black of Nasstar described hosted email in some detail – how it is done and the pros and cons of entrusting the provision of email services to a third party. Nasstar provide a wide variety of hosted services and a Hosted Desktop.

Also in the May/June issue, Nick Holmes asked “Does IT Matter?” and looked at the way that IT is becoming a commodity – another way of describing SaaS.

In the same issue, I summarised the characteristics of six virtual firms and looked in particular at the software they use since SaaS is crucial to the operation of most virtual firms and is also enabling many “real” firms to get some of the benefits of being virtual without abandoning their premises entirely.

In the July/August issue, Sunil Radia of UKTyping covered a whole range of outsourcing trends and possibilities, including transcription, archiving and storage, litigation discovery and disclosure, bulk conveyancing, simple drafting, accounting and legal cashier duties. He concentrated on the type of service where a human being is involved with the outsourced process, rather than “just” a computer.

In the September/October issue, solicitor and mediator Graham Ross looked at online dispute resolution. Essentially, the software to underpin the mediation process is available as a service, leaving the management and human skills part of the transaction to the lawyer.

In the same issue, Doug McLaughlin of Axxia described how practice management systems have evolved to the present point where the software for even large firms can be run online and can integrate with Microsoft Office applications – themselves now also available in hosted versions.

In the November/December issue, Jan Durant of Lewis Silkin described the options available for remote access and flexible working including Blackberrys, Windows Mobile devices, VOIP, Outlook Web Access, Virtual Private Networks and hosted access solutions (which provide the security to use remote access for particular applications).

Throughout the coming year, we will doubtless return to this topic again and again, since it is now fast becoming mainstream IT.

Words of caution?

Yes of course! All new IT developments should be looked at critically before leaping onto the bandwagon. Here are a few points to consider:

• Attempt to work out how the costs will compare over a period of several years.
• What sort of service level agreement (SLA) are you offered?
• Are you satisfied with the guarantees of confidentiality and security offered?
• Have you talked to other users of the service offered?
• If you are the first user of the software offered in this way, expect a large financial incentive.

Delia Venables is joint editor of this Newsletter.