SaaS – Software as a Service

Software as a Service (SaaS) is a delivery model for software where a solution is hosted by the service provider, who grants access to software use based on an individual license or subscription model. SaaS differs from traditional software environments, where each instance was installed directly on-site to the end user’s hardware, which can include their servers and workstations.

A simple example of SaaS versus traditional software models would be the previous paradigm of word processing software like Microsoft Word installed among business environments compared to the current popularity of cloud-based word processors Microsoft Office 365 or Google Docs.

Firstly, each instance of a program like Word would have been installed on each workstation, so if a new workstation was purchased, a manual installation of the product would be needed. If a workstation become broken or obsolete, its instance of Microsoft Word may not be recoverable, leading to wasted spend on a software license.

If companies wanted server-based functionality, like connecting Word automatically to a shared company database, that solution would have to be implemented on-site by installing servers, configuring software and configuring settings on each individual installation one-by-one.

A cloud-based solution can instead allow everyone to access a solution hosted by the software provider’s offsite servers. Users can frequently access the solution by logging in through their own browsers. Certain use cases for software like CRM may require installation of APIs in order to access more robust and connected features, but these configurations still access a persistent version of the software and face fewer technical issues.

Versions of traditional software products often persisted for years — how many Microsoft Office 2000 installs have you seen on computers running six or seven years later? Cloud-based SaaS solutions maintain single, persistent versions of an application that are continuously updated. Everyone accesses the same version of the software with the same exact features, meaning everyone is capable of performing the same tasks. Documents created through software use will also be reliably compatible between users.

Accessing SaaS solutions is easy since many solutions have cross-compatibility with mobile devices. Compare the agony of forgetting to email yourself a document versus being able to log in and access that document from anywhere. Single versions of projects are also saved, preventing situations like two people revising a document in different ways to create incompatible competing versions.

SaaS solutions can also dramatically reduce the procurement and migration costs associated with installing a new software solution. Licenses are often much more flexible and based on use time and/or number of registered users. Month-to-month costs are often much more affordable than up-front costs for buying newly launched versions of stand-alone software.

Providers of SaaS solutions cover all the resources needed for storage, maintenance and security, saving businesses from ballooning total cost of ownership (TCO) expenses that often come with on-site software installations.

Implementing a new solution can be done rapidly with SaaS since installations are often minimal or non-existent. Users can also potentially decide to immediately switch to another solution without the sunk costs of having already purchased permanent licenses.

In sum, SaaS offers advantages to most organizations through the convenience and reliability cloud-hosted services can provide. As SaaS models continue to evolve and SaaS providers offer an improving range of custom and bespoke installation options, self-hosted and installed software has quickly become an outdated model for a large portion of companies’ needs.