Hosted software is business concept where a service provider rents out a specific computer program to companies or individuals.  This can unburden end users of paying stiff licensing fees for commercial software use.  It will also be convenient for customers to opt for hosted software because it does not require costly hardware infrastructure.  A client only needs a computer desktop and an internet connection and the software can be used almost immediately.

Hosted software has been in the market for several years already. But it gained popularity in recent years primarily because companies want to streamline their software solution deployment.  Hosted software also benefits companies operating on a wide network.  Through hosted software, the need for a cumbersome computing facility has been eliminated and companies can enjoy the flexibility of computer applications accessible over the Internet.

A service provider offering hosted software can also provide unlimited storage and data archiving services for their clients.  This component service unclogs the information overload of companies which is a big headache for most company information officers. 

Hosted software companies also have their own technical support staff to maintain flawless running of applications and to provide glitch free processing of business solutions and data.  Companies can now lower their cost of maintaining redundant services such as the upkeep of servers and software maintenance. 

The potential of hosted software in giving companies complete computing benefits has been proven to work.  This is the reason why application service providers are gaining renewed vigor in the IT market. 

The International Data Center or IDC is a technology based institution that provides strategic analysis of technology issues, market studies on the IT sector, and investment intelligence for businesses.  IDC conducts in-depth research on emerging trends on technologies that may impact on business decisions and repositioning.  Recently, IDC has studied the impact of SaaS business model on partner industries and shows which direction this new technology is going.  It also studied the impact of SaaS adoption and recommendations have been proposed for this specific technology sector.

The study of IDC showed the increasing trend on aggressive expansion of SaaS companies in order to reach their development goals.  The expansion of SaaS is propelled by the increasing growth of the market.  In effect, SaaS companies are fast tracking their growth rates in order to match the market demands.

It is believed that to reach target growth rates, SaaS companies must strengthen its partnerships with subscribers.  The IDC showed that this will be the key factor in sustaining the growth and expansion of the SaaS business model.  Notice was also given to the fact that SaaS providers should improve strategic outlook in future software development.  To achieve optimum customer satisfaction, SaaS vendors must emphasize the development of technology focusing primarily on the business processes side rather than on technology.

The future is bright for the SaaS model and companies offering this type of software service.  Growth has been noted and its sustainability is anchored on continued software development that is more business centered.

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