What Is SaaS?

Two coworkers use software as a service (SaaS) through a tablet and a smartphoneSoftware as a service (SaaS) is the most commonly used option for businesses in the cloud market. The reason? It’s easily accessible – all you need is an internet connection and a browser – and it’s hands-off. The SaaS delivery model requires vendors to manage all the technical issues – meaning customers don’t need to lean on their in-house IT expertise.

As businesses become more comfortable operating in the cloud, SaaS solutions are becoming more popular. While many end users can self-provision SaaS technology on their own, others find that they need a third party to help with integration, customization and security.

Learning how to analyze, evaluate and design cloud computing solutions requires a fundamental understanding of the different components commonly used.

Common types of cloud computing services include the following:

SaaS offers organizations several advantages, namely in flexibility and savings. When SaaS vendors manage the tedious tasks like installing, managing and updating software, employees can focus on other priorities. Read on to learn exactly what SaaS is, the benefits it offers an organization, the challenges it may present and common use cases and emerging tech.

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Software as a Service (SaaS) Defined

SaaS is a software deployment model in which a third-party provider builds applications on cloud infrastructure and makes them available to customers via the internet. This means software can be accessed from any device with an internet connection and web browser rather than just on the local machine where it’s installed, as with traditional software.

Customers can deploy SaaS in one of three different models, as defined by the National Institute of Standards Technology (NIST):

  • Private Cloud: Cloud software is built on infrastructure that is provisioned for exclusive use by a single organization comprising multiple consumers. The infrastructure may be owned, managed and operated by the organization, a third party or some combination, and it may exist on or off premises.
  • Public Cloud: Cloud software is built on infrastructure that is provisioned for open use by the public. The infrastructure may be owned, managed and operated by a business, academic or government organization, or some combination. It exists on the premises of the cloud provider.
  • Hybrid Cloud: Cloud software is primarily built on one type of infrastructure but has the ability to switch to another in times of high demand. Standardized or proprietary technology enables data and application portability.

Advantages of SaaS Technology

For software developers, SaaS is the holy grail of a recurring revenue model and provides faster deployment time than on-premises software. In keeping with other cloud services, SaaS offers small businesses an opportunity to disrupt existing markets while taking advantage of fair SaaS pricing models.

Other advantages include the following:

  • Accessibility: Ability to run via an internet browser 24/7 from any device
  • Operational Management: No installation, equipment updates or traditional licensing management
  • Cost Effective: No upfront hardware costs and flexible payment methods such as pay-as-you-go models
  • Scalability: Easily scale a solution to accommodate changing needs
  • Data Storage: Data is routinely saved in the cloud
  • Analytics: Access to data reporting and intelligence tools
  • Increase Security: SaaS providers invest heavily in security technology and expertise

SaaS solutions are beneficial in a variety of business scenarios:

  • Startups and small businesses will find SaaS handy when they don’t have the time, capital or expertise to build their own applications or host applications on-premises.
  • Larger companies may use SaaS technology for short-term projects or applications that aren’t needed all year long.
  • Any company can benefit from SaaS technology when dealing with applications that require both web and mobile access.

SaaS implementation can be fairly straight forward and self-provisioned for simple applications accessible via public clouds. However, SaaS solutions designed for private clouds will require hands-on configuration and training by the vendor.

Challenges of SaaS

Not surprisingly, the number one advantage to using SaaS is also the number one challenge – needing an internet connection. If you have a strong, reliable connection, then it’s a pro. Obviously, if you don’t have dependable connection, it’s a con.

With the increasingly wide availability of broadband and high-speed networks, like 5G, this is becoming less of an issue. But there are a few other scenarios to consider before deciding to go with a SaaS solution.

Other challenges may include the following:

  • Loss of Control: The vendor manages everything, making you dependent upon the vendor’s capabilities
  • Limited Customization: Most SaaS applications offer little in the way of customization from the vendor
  • Slower Speed: SaaS solutions can have more latency than client/server apps
  • Security Risks: While the SaaS provider secures the application itself, strict measures should be taken with sensitive data

Examples of Software as a Service

Email and messaging apps are a prime example of SaaS. Commonly used software like Microsoft Outlook is ingrained in business culture, and its accessibility via the cloud can be a game-changer. While email is still the most popular method of communication in the world, messaging apps like Slack and Microsoft Teams are starting to creep in.

Other SaaS solutions improve the capabilities to store, organize and maintain data. SaaS marketing automation tools and customer relationship management (CRM) solutions are great examples of how software on demand is helping businesses reach their goals.

Whatever the solution, today’s SaaS customers run the gamut from individuals who are attracted to the affordable (or free) aspect of online applications, to others coming from larger enterprise companies that are integrating SaaS solutions into line of business departments. Popular software as a service examples include Office 365, Google G Suite (Apps), Dropbox, Salesforce, SAP Concur and Zoom.

  • Office 365 is an integrated experience of apps and services like Word, Excel, PowerPoint and more, updated monthly with the latest features and security updates.
  • Google G Suite is Google’s answer to productivity problems facing most companies and organizations. In one suite of tools, it offers solutions for email, word processing, spreadsheets, presentation decks, shared calendars, cloud storage and much more.
  • Dropbox offers a client that runs on Windows, Mac and Linux operating systems, as well as mobile devices, allowing users to drag and drop files from their desktop into their browser to upload them to Dropbox.
  • Salesforce is a CRM solution that brings companies and customers together. It’s one integrated CRM platform that gives all departments a single, shared view of every customer.
  • SAP Concur integrates corporate travel booking with expense tracking, giving customers a better user experience, more accurate data and richer reporting. Intuitive, web-based and mobile tools help users complete expense reports quickly and accurately.
  • Zoom unifies cloud video conferencing, simple online meetings, and group messaging into one easy-to-use platform.

What’s the Difference Between SaaS vs. IaaS vs. PaaS?

As you now know, software as a service (SaaS) makes applications available through the internet. There is no need for customers to install or run programs on their devices to use SaaS solutions.

Platform as a service (PaaS) provides a framework for creating and deploying applications while removing the need for infrastructure management. Infrastructure as a service (IaaS) provides pay-as-you-go infrastructure for a company with the benefits of flexibility and control.

The difference between the three cloud computing services really boils down to layers of control. IaaS offers the most control to the customer as they are responsible for their applications, data, runtime, middleware and operating system. On the other hand, PaaS customers only manage their applications and data, while SaaS customers are only responsible for their own data within the software.

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The Future of SaaS

The future promises a great acceleration of more cloud computing adoption as companies design and develop new technologies to supply that demand. Some companies predict a rebirth of SaaS technology that will be heavily focused on mobile devices. Other companies are putting stock in the trend that artificial intelligence (AI) will dominate the SaaS market in the fields like logistics, transport and retail.

As technology continues to evolve, SaaS models will as well. But the fact is that out-of-the-box and ready-made tools will always have a place in business. Overall, SaaS offers a wide range of benefits that work in the interests of both suppliers and users. Companies will continue to need qualified IT pros who can analyze, evaluate and design cloud computing solutions that fit their current and future needs.

Whether you’re looking to work in cloud computing or simply want to increase your knowledge on the subject, be sure to check out our other cloud computing resources.

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