Gordan Graham, marketing director for Wrapped Apps. (Darren Brown, OBJ)

Adobe Photoshop? That can run around $600. Microsoft Office? Around $300.

Getting to use some of the features these products offer, for only $10 to $20 an hour? Almost priceless.

At least, that's what the purveyors of software as a service (SaaS) would have us believe.

For the user who only wants to edit or modify one set of family vacation photos a year, SaaS proponents say, it makes no sense to buy a professional product that could be out-of-date almost as soon as they rip off the shrink wrap. It makes more sense to pay per use, or get a subscription online.

At Ottawa-based Wrapped Apps, so high is the demand for SaaS products that the company's created a new converter of sorts, dubbed ElastX.

It allows anyone with a software application to convert it to an Internet-ready application able to handle hundreds of Internet users at a time, said director of marketing Gordon Graham – all done via computer, without the tedious endeavour of coding by hand.

"Consumers will then be able to just use it by the hour, like drinking water. Nobody else is providing this market. Other companies are serving large businesses with 40,000-plus people," he said.

By the end of the year, the company's current 45 SaaS-enabled products will reach close to 1,000, said Mr. Graham.

These products will then be advertised on large sites devoted to promoting free or low-cost downloads. Since agreements are pending, Mr. Graham said he was unable to give out any names of these sites.

But security concerns dog the industry, forcing a battle for not only consumer dollars, but also confidence in the model.

"The biggest problem for people using SaaS is it is on someone else's server," said Tony Bailetti, an associate business and computer science professor at Carleton University. "It can make people uncomfortable."

The idea for SaaS dates back to at least 2000, when a small group of English engineers presented a paper touting SaaS as "The Future for Flexible Software" at the seventh Asia-Pacific Software Engineering Conference.

At the time, though, the average Internet user had only a 9,600-byte-per-second modem, said Mr. Bailetti. It wasn't until cable and DSL Internet became widely available when the concept began to grow.

It's an excellent model, said Tim Lethbridge, a software engineering professor at the University of Ottawa. But he added that worries about security make him caution businesses to often be wary.

Besides the problem of secure data floating around in cyberspace, he said, there will be people who want to use the software without forking out a single cent.

"Hackers could get in to disable the billing process or the ads so they can use (the software) for free."

But according to Joseph Nour, CEO of Ottawa-based Protus, that doesn't concern the Department of Homeland Security all that much.

The hyper-secure U.S. agency relies in part on Protus's SaaS fax, e-mail and voice systems for its work.

"As far as we know, they use it for disaster recovery. They have a recovery plan in Canada, so to speak, if something was to happen in the States," he said, adding as a half-joke, "We really don't ask them about it, though."

The potential for high subscriptions at low cost will be a large draw for even small businesses or single users who put their code into little applications, said Jeff Bennett, CEO of ServiceVantage.

His company works with those businesses which already have established software, and are eager to check out the SaaS model. But from seven years of finance modeling, Mr. Bennett said, he cautioned companies eager to immediately abandon the old for the new.

"You need to accept that you're going to have a hybrid model for a period of time since people don't have the cash to go solely to SaaS," he said.

By "hybrid," he explained, he meant those companies who already have a customer base should only throw a portion of their resources into SaaS.

The rest should remain with traditional applications for the time being, he said, to ensure customers stay on course with the company. But he said it's a necessary transition.

"Frankly, whether software companies like it or not, they need to do SaaS one way or another."

He added: "Many of them don't understand the urgency. We're going into an economy that is going to go down. If companies don't address this subscription model, they will be in big trouble."

But the real potential of SaaS remains untapped because companies are too focused on 'pay-by-subscription' instead of 'pay-per-product' models, said Peter Egan, president and CEO of s4 Potential.

What the company promises to do is deliver 'cognitive behavioural therapy' through SaaS.

It takes the well-worn model of a book, adds a dash of video and interactivity, and, said Mr. Egan, promises that if you're facing a problem in your life, this company will help you find ways to cope.

"Say I'm doing a program on substance abuse," said Mr. Egan, "and I'm dealing with the issue of managing cravings. The (e-book) will explain what cravings are, but using more media and so on.

"Then you will see an example of someone you know, a character, who is agitated at work. Then the program might stop you and ask if this person should do A, B or C in this situation. If you choose B, it will then play out B and show you what happened."

The model sounds new, but has actually been in place for five years – ever since a business referral put him in touch with Bill Winogron, a clinical psychologist, and over drinks the men traded new ways of getting in touch with people.

The two now work hand-in-hand, developing the software and the techniques behind it to reach people in need, he said.

"We feel a little bit like the missionaries because we've found nobody (else) that's doing this type of work," he said.

By Elizabeth Howell

Special to the OBJ