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Online applications are exactly that, applications that are available online and only require connectivity. Also known as Software as a service (SaaS), utilizing online applications eliminates the need to install applications on the user's computer and saves from having to purchase the full software program.
 In addition to free services such as Microsoft Office Live Workspace, online applications essentially offer a smaller, continuous expense that adds up over time rather than a larger sum up front. Online applications in a cloud-hosted environment in particular are seeing momentum. With cloud-hosted services such as Microsoft Online Services, smaller businesses are able to utilize enterprise-level software for a smaller monthly subscription amount, rather than the full cost of software up front.
Cloud-hosted online applications also offer better uptime than most small to mid-size businesses can support in-house. This makes for additional ROI savings for businesses that decide to move to the cloud hosted environment. The impact that the cloud will have on SaaS is clearly demonstrating an impact even through enterprise mobile applications that are run in a cloud environment, providing anywhere access to information.
Using online applications reduces the time to market. According to RBC Capital Markets it is expected to be 23% of $120B US software market. Part of the reason for this significant presence of online applications usage is that not only do they save money; they minimize the need to invest in new software versions and upgraded packages.
Technology becomes obsolete quicker as time progresses, making the use of online applications an ideal method to keep with latest versions and newer technologies that are available as online applications. For example, if a software program is purchased and installed (including implementation costs), over several years time it will begin to even out cost-wise in relation to online applications, but by the time it becomes closer of a comparison, the software will likely become obsolete. In order to stay competitive, a newer software needs to be purchased and maintenance costs need to be taken care of as well.
As a result, online applications save money for not only maintenance costs, but also saving on the need to purchase new software once your existing one is no longer contending with the technologies that competitors are using. Online applications also free businesses from having to maintain updates, such as with Windows. SaaS providers can also achieve better uptime and security than small to mid-sized businesses.
If you are a new organization, you can reduce costs by acquiring new online licenses instead of renewing your purchased software licenses. Many Microsoft products such as LiveMeeting, Exchange Online, Office, and MSCRM are transitioning to online licenses. One possible downside is that if you do not want to use a more recent or updated version of an online application, there is usually no control over whether you can continue using an older version and updates are automatic.
Microsoft Online Applications
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Zoho
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Google Apps
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Thinkfree
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