There are Software-as-a-Service (SaaS) applications for fundamental business technologies. Such as email, sales management, customer relationship management (CRM), financial management, human resource management (HRM), billing and collaboration.
Mainly, the leading SaaS providers include Salesforce, Oracle, SAP, Intuit, and Microsoft. Bearing in mind, SaaS applications are used by a range of IT professionals and business users. As well as C-level executives.
Organizations can integrate SaaS applications with other software using Application Programming Interfaces (APIs). For example, a business can write its own software tools and use the SaaS providers APIs to integrate those tools with the SaaS offering.
For companies of all sizes, SaaS offers a much larger potential for offloading those duties. There also are a handful of SaaS Applications — Salesforce, Gmail, Office365 being among them. And that are so widely used that they no longer feel risky for enterprises. Becoming harder to justify not using.
The SaaS market has become so robust that any application vendor without a strategy to deliver their software via SaaS is falling behind.
What is Software-as-a-Service?
Software-as-a-Service (SaaS) is a software distribution model in which a third-party provider hosts applications and makes them available to customers over the Internet. SaaS is one of three main categories of cloud computing, alongside Infrastructure-as-a-Service (IaaS) and Platform-as-a-Service (PaaS).
SaaS is closely related to the Application Service Provider (in short ASP) and on-demand computing software delivery models. The hosted application management model of SaaS is similar to ASP. Whereby, the provider hosts the customer’s software and delivers it to approved end-users over the internet.
In the software on-demand SaaS model, the provider gives customers network-based access to a single copy of an application that the provider created specifically for SaaS distribution.
Often, the application’s source code is the same for all customers and when new features or functionalities are rolled out, they are rolled out to all customers.
Why Consider a SaaS model before IaaS?
As an example, Amazon Web Services (in short AWS) and infrastructure as a service may get the most attention in the market. But it’s often not the first Marketplace IT shops turn when they begin their shift to the cloud. Software-as-a-Service continues to be a popular option for companies looking to dip their toe outside their own data center.
Meaning, Software as a Service (SaaS) has emerged as a popular choice to offload applications. Particularly, that don’t provide organizations with a competitive advantage, relieving IT of laborious management and upkeep tasks.
And as more SaaS applications come to market and become commonplace in integrating businesses, the question is quickly becoming why IT shops aren’t considering SaaS first. That space has essentially become a networking closet to maintain WiFi and Ethernet. As well as the Windows Active Directory Servers required for authentication.
Read and learn more about What is Infrastructure-as-a-Service?
SaaS is an attractive option for users willing to offload workloads to another vendor. Especially if they have an internal skills gap with the public cloud. And if they aren’t interested in controlling the underlying infrastructure.
For example, when moving a legacy application to the cloud, it often comes down to whether the user wants to change the application in the process. And if the user is OK with how it runs now, the best bet is to simply pick it up. And move it to cloud infrastructure.
But, if they want to update the application, SaaS can be a good way to tie it all together with API calls rather than rewriting all the code.
Examples of Software-as-a-Service
Organizations of all shapes and sizes are embracing the SaaS philosophy as an alternative to on-premises hardware and software deployment. IT management metrics provider Computer Economics reports that 60 percent of all companies now have at least some Business SaaS Integrated Solutions.
With 36 percent intending to increase their investment in the months ahead. With this in mind, what essential SaaS apps every company should know? Below are just but a few mentions of 10 essential SaaS apps for companies.
- Microsoft Office 365
- Google Apps
- AWS Marketplace
What are the Advantages of Software-as-a-Service?
In general, the Software-as-a-Service removes the need for organizations to install and run applications on their own computers. Or rather, in their own data centers.
And in that case, eliminating the expense of hardware acquisition, provisioning, and maintenance. As well as software licensing, installation and support. Other benefits of the SaaS model include:
At the same time, it offers flexible payments. And rather than purchasing software to install, or additional hardware to support it, customers subscribe to a SaaS offering. Whereas, they pay for this service on a monthly basis using a pay-as-you-go model.
Read and learn more about What is PaaS (Platform-as-a-Service)?
Equally important, transitioning costs to a recurring operating expense allow many businesses to exercise better and more predictable budgeting. In the end, allowing users to terminate SaaS offerings at any time to stop those recurring costs.
In addition, it has a more scalable usage. Where cloud services like SaaS offer high vertical scalability, it gives customers the option to access more, or fewer, services or features on-demand.
On the other hand, SaaS provides automatic updates. Rather than purchasing new software, customers can rely on a SaaS provider to automatically perform updates and patch management. Not to mention, this further reduces the burden on in-house IT staff.
Finally, it gives way to improved accessibility and persistence. Since SaaS applications are delivered over the Internet, users can access them from any Internet-enabled device and location.
What are the Disadvantages of Software-as-a-Service?
Yes! Of course. Software-as-a-Service also poses some potential disadvantages. Below are some of the disadvantages where businesses;
- must rely on outside vendors to provide the software,
- keep that software up and running,
- track and report accurate billing, and also
- facilitate a secure environment for business scale data.
Another important point to note is that, providers that experience service disruptions impose unwanted changes to service offerings.
While at the same time, experiencing a security breach or any other issue can have a profound effect. Especially on the customers’ ability to use those Software-as-a-Service offerings.
As a result, users should understand their SaaS provider’s service-level agreement, and make sure it is enforced.
Software-as-a-Service FAQ Answers
The Software as a Service (SaaS) model continues to gain traction across all corners of the business world, and for good reason. In other words, SaaS is also known as on-demand software, hosted software or web-based software.
SaaS eschews traditional software installation, maintenance, and management approach in favor of delivering cloud-based applications via the internet. With SaaS, service provider partners shoulder the burdens of security, availability, and performance. Below are some Pros and Cons of SaaS.
1. What is SaaS Running Cost?
SaaS is a natural fit for businesses intent on slashing IT responsibilities and costs. On average, firms that transition to Software as a Service subscription from capital-heavy, on-premise infrastructure installation, maintenance, and upgrades enjoy an IT spending reduction of more than 15 percent. According to data collected by Computer World.
2. Is SaaS Affordable?
SaaS is also for small businesses too. Instead of investing in additional in-house server capacity and software licenses, companies simply can adjust their Software as a Service subscription on a monthly basis. Scaling consumption requirements up and down based on project demands and other variables.
3. How is the SaaS Bandwidth?
There’s also an increase in human bandwidth. Allowing staff to tackle projects more vital to the company’s future growth. And because the IT infrastructure resides in the service provider’s data center, your organization can get back up and running immediately in the event of a service outage or more dramatic disruption.
4. Is SaaS Integration Easy?
Nothing is perfect, of course, and SaaS is no exception. Companies that adopt multiple Software as a Service application or plan to connect hosted software with existing on-premise apps may encounter software integration headaches along the way.
5. How is SaaS Security?
Security is another common concern for businesses mulling SaaS options. Such as identity theft and access management drawbacks which must be addressed.
Businesses must also take into account the government compliance regulations inherent in storing customer data in a remote data center.
Email and collaboration are the most popular options for outsourcing, with 23% of workloads running in SaaS. And that number is expected to rise to 36% within two years.
Inasmuch as migrating apps to the cloud was once dismissed because of a lack of cost savings, it has eventually re-emerged with a vengeance. Since companies look to offload workloads such as SAP and Oracle. That can often be the most difficult to manage and maintain.