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In less than a decade, the next generation of ASP has arrived. This time, though, it's called Software-as-a-Service (SaaS), and government has started noticing. Economic development agencies in Ohio and Virginia, the Texas Department of Criminal Justice, the Social Security Administration (SSA), and the National Geospatial-Intelligence Agency (NGA) are some of the early SaaS adopters. But what exactly is Software-as-a-Service?

"SaaS is, very simply, delivering application functionality over the Internet through a Web browser," said Leo Jolicoeur, executive vice president and chief marketing officer of @Road, an SaaS provider. "When we first put a label on ASP, it was originally the concept of taking existing licensed applications and delivering them in a sort of hosted form for customers who didn't want to buy that application. So it was all about applications that currently exist in licensed form delivered to customers without all that investment."

SaaS, according to Jolicoeur, is more than a rebranded ASP -- it's ASP grown up.

"As it's evolved from the original ASP offerings to Software-as-a-Service, we're seeing a much deeper, richer, robust set of applications and services that didn't necessarily exist in license form before," he said. "I think, in the future, we're going to see most applications delivered in Software-as-a-Service form."

There are tremendous possibilities built into SaaS for government, the most obvious of which is running an enterprise without buying any software -- meaning untold millions could be saved in licensing costs. Additionally SaaS means an agency need not dedicate IT staff to maintain and troubleshoot the application. That is all handled by the provider.

Other benefits include easy integration, collaboration, and free and automatic software updates. In most cases, only a Web browser and an Internet connection are necessary to access the software. Furthermore, the existing IT infrastructure enables both highly reliable and secure connections. However, this same infrastructure nearly killed ASP in the 1990s because it was not developed well enough to render ASP sustainable.

"The old ASPs were just sending things over the Internet that weren't necessarily secure, the servers weren't reliable and they didn't have appropriate backup systems; they didn't have fail over systems. These are the kinds of things we have that the old ASPs did not have," said Steve Nesenblatt, public sector vice president of RightNow Technologies. "[ASP] has evolved into a more reliable delivery mechanism. I don't think there's a core fundamental difference other than it's matured as a system to where larger organizations can rely on it."

For government, SaaS presents an extraordinary opportunity. Currently the most common SaaS applications are customer relationship management (CRM) and enterprise resource planning (ERP) solutions, human resources software, performance management and e-mail systems. However, the potential exists to deliver hosted software environments where virtually any sort of software is available. Something as complex as an enterprisewide financial accounting system can be accessed just as easily as could a word processing program.

From the public-sector perspective, this represents the ability to dramatically reduce costs by eliminating licensing fees, maintenance costs and troubleshooting expenses while reducing the amount of labor needed to install, update and repair software housed on agency computers.

The question then is why is adoption in government so scant?

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