What is Software-as-a-Service (SaaS)?
Software as a service (or SaaS) is a way of delivering applications over the Internet—as a service. Instead of installing and maintaining software, you simply access it via the Internet, freeing yourself from complex software and hardware management.
SaaS applications are sometimes called Web-based software, on-demand software, or hosted software. Whatever the name, SaaS applications run on a SaaS provider’s servers. The provider manages access to the application, including security, availability, and performance.
A good way to understand the SaaS model is by thinking of a bank, which protects the privacy of each customer while providing service that is reliable and secure—on a massive scale. A bank’s customers all use the same financial systems and technology without worrying about anyone accessing their personal information without authorization. A “bank” meets the key characteristics of the SaaS model, namely:
A multitenant architecture, in which all users and applications share a single, common infrastructure and code base that is centrally maintained. Because SaaS vendor clients are all on the same infrastructure and code base, vendors can innovate more quickly and save the valuable development time previously spent on maintaining numerous versions of outdated code.
The ability for each user to easily customise applications to fit their business processes without affecting the common infrastructure. Because of the way SaaS is architected, these customisations are unique to each company or user and are always preserved through upgrades. That means SaaS providers can make upgrades more often, with less customer risk and much lower adoption cost.
Improved access to data from any networked device while making it easier to manage privileges, monitor data use, and ensure everyone sees the same information at the same time.
SaaS Harnesses the Consumer Web
Anyone familiar with Amazon.com or My Yahoo! will be familiar with the Web interface of typical SaaS applications. With the SaaS model, you can customise with point-and-click ease, making the weeks or months it takes to update traditional business software seem hopelessly old fashioned.
SaaS v packaged software
In the past, businesses bought and relied on packaged software – from multi-application systems covering spreadsheets, databases and email to specialist packages for particular tasks like project management or business intelligence.
Packaged software – the drawbacks
To use sales and marketing as an example, a business may have used on-premises software for CRM. This software needed to be evaluated, bought, installed, kept secure, maintained and regularly upgraded on in-house systems by the internal IT department.
Using packaged software placed a burden on the IT team which could turn into a bottleneck for projects.
A business could end up needing to support a wide variety of systems side by side, but find it tricky to integrate them as they were coded and built differently.
This approach also presented upfront costs for software and licences and potentially servers for the software to sit on.
The costs of the CRM software and hardware might mean it is not affordable for small businesses. It could also be difficult to scale up quickly in response to growth or change.
Leave A Comment