What is Hosted Software?

If you have spent any time lately shopping for software for your business, you have probably run across the terms hosted software, web based software or online software. If you have never used or considered hosted software, you are probably wondering what hosted software is, what the differences are between hosted software and traditional shrink wrapped software you buy in a store and you may be wondering why you should consider using a hosted software application. We will attempt to answer all of those questions and highlight the benefits of choosing a web based application.

Up until fairly recently, software was created, CDs or DVD were mass produced, packaged then distributed to various retail outlets where consumers could buy the software package then load it onto their computer. As you can imagine, manufacturing and distribution are costly processes and these costs are reflected in the price of the software. Some companies save on these costs by making their software products available for purchase and delivery online. After the customer purchases the software, he or she is able to download the program onto their computer, install it and start using the application right away. Whether the software came in a box from a store or was downloaded online, the program lives on the customer’s computer. Data is stored either on the same computer or in a location the user specifies. It is up to the user to secure the application, determine when upgrades are installed and when or how data is backed up.

With hosted software, the delivery process is much different. Think of web based software as a service. The software is accessed and used entirely online through the user’s web browser. It can be accessed from any computer or physical location, provided the user has an Internet connection available. The software and data live on the software provider’s servers. Users interact with the software sending and receiving data over the Internet. The data is usually encrypted to prevent others from viewing your data. The hosted software provider is responsible for maintenance, upgrades, security and data backup. Rather than paying a flat fee as you would for packaged software, most web based software application service providers charge a monthly fee for usage.

In terms of benefits, startup costs for hosted software are typically much less than those of traditional software. For hosted software, license or usage fees are normally paid monthly rather than all at once up front pricing that is typical of licenses for off the shelf software. If you have a web browser and can access the Internet, you can usually begin using a web based software product right away. You would not have to be concerned with upgrading your hardware or getting the program installed on all the computers that need to access the application. No plan or changes to your existing plan needs to be made to accommodate data backup and security needs for your new software.

Hosted software programs usually offer all of the key features of their off the shelf counterparts and in some cases more functionality is included. With the potential cost savings and convenience hosted applications offer, it is worth taking a look at web based software if you are in the market for a new program.

Related Posts: Hosted Software Versus On Premise Solutions | Save Money by Using Hosted Software