Are you looking better to understand SaaS (software-as-a-service) as a concept? In this article, we explore SaaS and its benefits and find whether it is suitable for your organization or not.
Customers love SaaS because it does not require them to buy, install, maintain, or update any hardware or software. Here, access to applications is easy, and all that is needed is an internet connection.
SaaS came into the picture at the time when IT executives were frustrated with the ever-increasing costs of packaged enterprise software. They had to spend thousands of dollars for licenses and then again to implement that software. Besides, there were consulting fees, training costs, the extra infrastructure to run the software, and ongoing maintenance fees. And then SaaS arrived as a radical alternative to traditional software licensing models and promised easier, cheaper, and speedier implementations. Moreover, even today, SaaS is considered a captivating option for many enterprises, and here we explain why you should use SaaS for your organization.
What Is Software-As-A-Service (SaaS)?
SaaS (software-as-a-service) is a software licensing model where access to software is provided on a subscription basis. The software is located on external servers instead of in-house servers. SaaS is accessed via a web browser, and users log into the system using a username & password.
- This software licensing model enables access to software on a subscription basis using external servers.
- Its users do not require installing software on their computer, and instead, they can access programs via the Internet.
- SaaS has various business applications, including email calendars, file sharing, human resources, and customer retention management.
- The software is easy-to-implement, easy-to-update & debug, and is mostly less expensive, or at least has lower up-front costs). The lower up-front costs are in SaaS user’s pay as they go rather than buying multiple software licenses for multiple systems.
What Are The Characteristics Of Software-As-A-Service?
The key features of SaaS include:
1. Multitenant Architecture
Software-as-a-Service has a multitenant architecture. Here all the users & apps share a single, shared infrastructure, and the code base is centrally maintained. With SaaS vendor clients being on the same infrastructure & code base, the vendors innovate quicker and save precious development time previously spent to maintain numerous versions of the outdated code.
2. Easy Customization
The software allows users to customize apps to fit their business processes without affecting common infrastructure. SaaS is architected so that customizations are different for each user/company, and they are always preserved through upgrades. Hence, SaaS providers can constantly upgrade without much customer risk and lower adoption costs.
3. Offers Improved Access
It allows better access to data from any networked device and efficiently manages the privileges, monitors data use and ensures that everyone sees the same information simultaneously.
4. It Connects The Consumer Web
Users who have used My Yahoo! or Amazon.com earlier must be familiar with the Web interface of typical SaaS applications. The SaaS model allows them to customize with point-and-click ease, and it makes the time is taken (weeks or even months) to update traditional business software seem very old-fashioned.
5. SaaS Trends
Nowadays, organizations develop SaaS integration platforms, abbreviated as SIPs, to build additional SaaS applications. Saugatuck Technology, a consulting firm, calls it the “third wave” in software adoption, where SaaS establishes itself as standalone software functionality to turn into a platform for mission-critical apps.
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Advantages Of Software-As-A-Service (SaaS)
SaaS offers many advantages over conventional software-licensing models. It’s easy-to-implement, easy-to-update, and debug and can be less expensive, as it has lower upfront costs.
SaaS Offers Several Apps For:
- Auditing functions
- Email services
- Shared company calendars that are useful to schedule events
- Manage documents, like file sharing & document collaboration
- Automate signup for products & services
- Customer Relationship Management (CRM) systems are mainly a database of information regarding clients & prospects. SaaS-based CRMs help hold company contact information, products purchased, business activity, and tracking leads.
The types of software that migrated to the SaaS model are usually focused on enterprise-level services, like human resources. Often, these tasks are collaborative and require employees for several departments to share, publish, and edit material though not indeed in the same office.
Its Advantages Consist Of:
- Easy to implement, update, & debug
- Accessible from anywhere
What Are The Examples Of SaaS?
A few examples of SaaS are discussed here:
1. Google Docs
The famous and simplest real-world SaaS example is Google Docs, Google’s free online word processor. It was launched in October 2012, and to use Google Docs, one needs to log in on a web browser to get instant access. Google Docs enables writing, editing, and collaborating with others regardless of the location.
Founded in 2007, this cloud storage service is another real-life SaaS example. It makes storing, sharing, and collaborating on files & data more accessible for businesses. For instance, it allows users to backup and sync photos, videos, and other files to the cloud and accesses them from any device, despite where the users are.
Is SaaS Cheaper In Comparison To Traditionally Packaged Software?
Deploying SaaS is cheaper than on-premise installations. Generally, SaaS users pay a flat monthly fee for this software. It’s cheaper because companies don’t require hardware/infrastructure to make this software work. Hence, with SaaS, there are no capital expenditures. Also, you don’t require hiring many consultants to get this software installed, which is usually required with traditional enterprise software.
Usually, SaaS customers like this idea of a low-up front investment and predictable expense stream, regardless of the cost advantages of the SaaS model, might be a wash post 3 to 5 years of monthly fees.
Also Read: What is B2B SAAS? A Brief Introduction
Is SaaS Suitable For Your Organization Or Not?
SaaS is not ideal for every company, and all the applications do not lend themselves to the SaaS delivery model. To find how apt SaaS is for your organization, consider these criteria:
- What type of process/function for which you consider a SaaS solution?
- What is the extent to which you require customizing a SaaS solution?
- What is the maturity of the application?
- What extent is SaaS required to be incorporated with the other (internal & external) systems?
Speaking generally, SaaS solutions are ideal for non-strategic, non-mission-critical processes & functions. This consists of expense & travel management procurement & employee performance management which are standard, simple, and not greatly dependent on or integrated with the other business functions & systems. Also, SaaS works well for automated processes for the first time, as it does not involve legal processes to replace, hence lesser change-management challenges.
If considering adopting established processes for specific functionality, sales force automation, CRM, or warehouse management, then SaaS can work best. However, a flexible packaged application would serve you better to make the company stand out through supply chain practices or customer service. This is why apps like business intelligence and ERP that touch on the very core of the enterprise do not go with SaaS. In the same way, if the functionality you seek is the core of your operations, better go with an onsite solution that allows managing the app if it goes down.