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Part 1  Introduction

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Web services

’ or ‘Software as a Service (SaaS)’ refers to a highly significant model for man-

aging software and data within the digital business age. The web services model involves 

managing and performing all types of business processes and activities through accessing 

 web-  based services rather than running a traditional executable application on the processor 

of your local computer.

Benefits of web services or SaaS

SaaS are usually paid for on a subscription basis, so can potentially be switched on and 

off or payments paid according to usage, hence they are also known as ‘on demand’. The 

main business benefit of these systems is that installation and maintenance costs are 

effectively outsourced. Cost savings are made on both the server and client sides, since 

the server software and databases are hosted externally and client applications software is 

usually delivered through a web browser or a simple application that is downloaded via 

the web.

In research conducted in the US and Canada by Computer Economics (2006), 91% of 

companies showed a  first-  year return on investment (ROI) from SaaS. Of these, 57% of 

the total had economic benefits which exceeded the SaaS costs and 37% broke even in year 

one. The same survey showed that in 80% of cases, the total cost of ownership (TCO) came 

in either on budget or lower. There would be few cases of traditional applications where 

these figures can be equalled. Read Mini case study 3.4 for details on the benefits of a SaaS 

implementation and how the concept of service usage can also be applied to hardware 

infrastructure.

Web services

Business applications 

and software services are 

provided through Internet 

and web protocols 

with the application 

managed on a separate 

server from where it is 

accessed through a web 

browser  on  an   end-  user’s 

computer.

Web services, SaaS, cloud computing and  service-  oriented 

architecture (SOA)

Focus on

Mini Case Study 3.4

CIO (2010) describes how Intel built an intranet for its research and development group. Its aims were to 

reduce the cost of operations by making more use of existing infrastructure and making users of comput-

ing services aware of the cost of their utilisation. Das Kamhout, the project lead, explained the benefits as 

follows:

Overall, this represents a dramatic change in mindset. On‑demand  self‑  service allows IT to get out of the 

way of the business so we can up‑level IT and be a strategic business partner. And with transparent costs, 

departments across Intel now know what they’re costing and what they’re consuming.

This approach to server utilisation is known as