On-demand software refers to an application delivered via and managed on a vendor’s cloud computing infrastructure to Internet-connected users when needed. The business model allows users and organizations to use the software in a pay-as-you-go manner, typically billed monthly.

On-demand software is also called “software-as-a-service (SaaS),” “online software,” and “cloud-based software.”

You can compare on-demand software to your utilities at home. You get billed each month for the electricity and water you use. So if you took a two-week vacation, you might get bills that are half of your regular consumption. The same goes for using on-demand software. You only pay for your total usage.

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On-demand software is cloud-based. That means you don’t need to purchase a CD to install it. It also doesn’t come at a fixed price as on-premises software does.

How Does On-Demand Software Differ from On-Premises Software?

On-demand software differs from on-premises software primarily in ownership, maintenance, cost, installation, access, and payment model. The table below sums up their significant differences.

On-Demand Software vs On-premises

Unlike on-premises software that you need to buy from a computer shop or online and then install on your computer, making you its owner, you don’t own on-demand software. You only rent it. Because you don’t own on-demand software, you don’t have to download and install updates when prompted. So each time you access it online, it’s always up-to-date.

Also, unlike on-premises software that you pay for once upon purchase at a store at a fixed price, even if you won’t use it regularly, you only pay for on-demand software when you use it. On the downside, you can’t use on-demand software when you don’t have an Internet connection because it’s hosted on the cloud.

How Did On-Demand Software Come About?

On-demand software came about to enable businesses to enjoy premium services from external providers at less cost. Instead of buying on-premises software and installing one on each computer, companies can get a group subscription so users who need the application can access it anytime.

This type of software doesn’t require the user or organization’s IT team to manage it. They can contact the software’s support help desk for help if they run into trouble while using the app.

The first on-demand software can be traced back to the end of the 1990s. Today, many companies offer on-demand software free trials to hook users into subscribing to them eventually. Note, though, that most trial versions only come with basic features. Only paying subscribers can enjoy advanced software features.

What Are the Advantages of Using On-Demand Software?

On-demand software has gained popularity over time due to several features, including:

  • Customizable: Lets users configure the app to their liking in terms of functionality and appearance for a much better user experience.
  • Easy to update: On-demand software providers send updates more timely to users. And users, on their part, have to exert minimal effort to upgrade their apps.
  • Consumes less computing resource: On-demand software users don’t need to install the program onto their computers to use it. As such, the tool won’t eat up memory space and other resources.
  • Low setup and infrastructure cost: Software licenses can cost a lot, but on-demand software doesn’t require you to pay upfront to use it.
  • Can be accessed from anywhere: This type of software can run on a desktop, laptop, tablet, or mobile phone so long as it has Internet access.
  • Scalable: The number of on-premises software users depends on how many devices have it installed. On-demand software subscriptions can easily be adjusted by adding to the number of users on your plan. You can also add more functionality on the fly.
  • Better customer service: On-demand software providers offer industry-leading service-level agreements (SLAs) to guarantee uptime and performance. Users are thus assured the program will be available when they need it. They also provide 24 x 7 technical support so your operations won’t get affected.
  • Security: Apart from guaranteed uptime, on-demand software users are also assured security. All of them enjoy the same level of cybersecurity, regardless of what plan they subscribe to.

On-demand software has made using any application, even the most expensive ones, affordable for any individual or company. It allows everyone to enjoy the benefits of the most advanced programs without breaking the bank.

Key Takeaways

  • On-demand software is a program a vendor delivers and manages from its cloud computing infrastructure to Internet-connected users.
  • The primary benefit of using on-demand software is cost savings.
  • The first on-demand software was launched in the 1990s.