After the highly successful VMware (VMW) IPO last week, which saw the price of the stock nearly double in just two trading sessions, it appears that tech IPOs are hot once again and there are some interesting ones that are currently in the pipeline. Located close to each other in San Mateo, California, NetSuite and Success Factors are two such companies that have filed to go public in the near future. Apart from their location these companies also have one more thing in common. Both of them are Software-as-a- Service (SaaS) providers or in the outdated pre-2000 jargon, Application Service Providers (ASP).
Software-as-a-Service (SaaS):
SaaS is a concept where you do not purchase a piece of software and try to customize it for your needs but instead license the use of it from a company that hosts and maintains the software for you. Something similar to leasing a car instead of buying one with the added advantage of having the dealer take care of oil changes and other maintenance for you (at a cost of course unless you drive a BMW). The only thing the client needs on their end is an internet connection and a web browser. SaaS offerings are platform independent making them suitable for companies that use multiple operating systems and they are also available universally (no more having to VPN into a corporate server).