Author: GURU Solutions
Tuesday, May 25, 2021

What is Software as a Service?

By definition, you can gather that software as a service(SaaS) is a medium of licensing and software delivery accessible online, not by purchasing and installation on a single computer or device but rather through subscription. Therefore, this software type prides itself on being part of the top categories of cloud services. The other two are infrastructure-as-a-service (IaaS) and platform-as-a-service (PaaS). 

Generally, benefits from SaaS apps are evident to individuals, enterprise owners, and IT experts. Far from IaaS and PaaS, SaaS commodities are also advertised to both B2C and B2B consumers. Data from a report recently by McKinsey & Company stated that the industry analysts expect the software used to scale further with SaaS projected, by 2024, to reach $200 billion.

The Origin of SaaS

What is Software as a Service?

Dating back to the 1960s, there has been an idea of centralizing business app hosting. A few years later, during the 1990s, third-party apps were both hosted and run by an ASP supplier as the internet integrated into Application Service Providers (ASPs). However, even then, the apps could only be directly installed on the computers belonging to the users. 

The ASP model of those times gave birth to the now much more advanced SaaS. A major improvement with SaaS was that vendors and suppliers could now govern their software with no installation required. Behind this new ability was the software's ability to be spread throughout the internet using the cloud. With further development into cloud computing, companies can now use computing resources of the internet, similar to how electricity works.

Developers took time to create and improve SaaS so that it can pass as an option worth considering. As a result, the SaaS model has grown over time and now administers substantial efficiencies, even in finance, for companies. 

How is SaaS Unique?

Several features make the SaaS model stand out from the rest;

SaaS Architecture

Products created from SaaS thrive from utilizing the multi-tenant approach. What this means is that a single occurrence of the app will spread across all the host servers. Individual users or tenants will each receive the app at once. One version and settings for the app will be accessible for everyone using the application. Although various subscribing clientele operates on a similar infrastructure in the same cloud case, information received from all consumers is separate.

Multi-tenancy also enables a broader community of people to receive more services without losing privacy, speed, and also security as they are essential to cloud functions. 

Easy Customisation

This feature is quite self-explanatory. The model, SaaS, allows its users to easily customize apps and render them suitable to who they are without the general infrastructure changing. The SaaS providers, conveniently, get to add upgrades without interfering with the customers' changes over time. As a result, the adoption costs can also be kept very low. 

Improved Access

Who wants to struggle with accessing their data? With the software, accessing data is very simple and only takes a short amount of time. Furthermore, all the data is also conveniently kept in sync. Therefore, users are also able to see the same information at the same time.

SaaS Harnesses the Consumer Web

Everyone who knows or MyYahoo! would know the Web interface of typical SaaS apps. However, the SaaS model enables users to customize with ease and promptness, compared to traditional business software.

How SaaS Works

What is Software as a Service?

Now that we have uncovered what SaaS is, then how does it go about its business? First, SaaS works via the cloud delivery model. This means that the provider can host the app and other data related to its databases, servers, networking, and even on its computer resources as an ISV.

From here, with an internet connection, any computer can access the app. Notably, SaaS apps are only accessible via a web browser. Consequently, the companies that use the products do not need to set up and manage the software - users need to pay a certain subscription fee to gain access.

SaaS is meticulously linked to the application service provider (ASP), whereby the provider hosts the specific software among others and gives licensed users access when they connect to the internet. 

In the software-on-demand SaaS model, all users receive access to a single duplicate app made specifically for SaaS distribution. Hence, the source code is identical for all users, and they receive new features simultaneously. 

Notably, organizations using APIs can incorporate SaaS apps with other software. 

Benefits of SaaS 

SaaS has several advantages that make it a go-to option for users. Let's dive in;

Easy to Access 

Gone are the days that productivity beyond the office was limited. When it comes to SaaS, just an internet connection is required to use the software. So from anywhere globally, from any device, you can log in at any time.

Due to more technological advancement, most people know and are comfortable with venturing into the internet. Owing to this, they usually adopt SaaS apps relatively with ease.

Vendor Accountability

Since most products are subscription-based, unhappy users may either cancel or choose not to renovate their subscriptions. Thus, suppliers remain accountable to a greater degree and need to deliver a good service or fail efficiently.

Consistent testing occurs with continuous improvement, and SaaS products are not resistant to any software programs' flaws and bugs. Since there is no patching or upgrading feature for which end-users are responsible, only the SaaS vendor has the sole responsibility for all such bugs. Hence, many SaaS vendors have beta and alpha testing programs to try them and give feedback.

Scalable Usage

SaaS provides high scalability, enabling clients to get more features on request.

Data and Analytics

When businesses use SaaS software, they can capture, at their fingertips, data that can be used for analytic purposes. In addition, they can access the reporting and intelligence tools that, in turn, tend to give detailed insights into how the business is doing.

What is Software as a Service? 

Piracy is also at all costs avoided as the access to the product is duly measured by subscription.  

SaaS Challenges

Despite the many advantages that SaaS poses, there are a few disadvantages that have come up.

Users Have No Versioning

All users receive the latest versions of an app whether they prefer the version or not. Therefore, the corporation needs to give extra training for each version that is introduced.

Beyond User Control

Providers could experience service unsettling, make unwelcome changes to the services they pay to use, or anything that affects the consumer's utilization of the SaaS services. To mitigate such issues, consumers need to understand the supplier's SLA and ensure it is imposed.

Swapping Vendors

Swapping vendors is hard due to the massive chunks of data that require to be transferred. In addition, the use of exclusive tech and data types may cause more complications in the data transfer process between contrasting cloud providers.

SaaS vs IaaS vs PaaS

What is Software as a Service?

As previously mentioned, SaaS is among the 3 cloud service models. 

These three differ in the completeness of the product. Products associated with SaaS are absolute and fully governed apps. Then, PaaS brings about both a development platform and other provider-hosted tools on the data center. Of the three, IaaS is mainly outsourcing data center resources.

SaaS: Vendors are in charge of updates, improvements, support, security, and all other aspects of maintaining the software. However, users are not required to download the software or manage it in any way. 

IaaS: Providers for the software host components of infrastructure, including storage, servers, hardware networking, and tools for virtualization. Customers who use IaaS services still have to manage their data and systems (OSes).

PaaS: Developers get to customize apps on this platform. Vendors can also run the resources provided by the data center. However, consumers do not need to run the system but only manage apps and the amount of data used.

SaaS Pricing

So, how do providers determine how they will charge SaaS products?

Pricing Parameters

  • User Basis: Each user is required to pay a specific fixed price
  • Free: Providers don't charge the users, but they generate income through ad sales.
  • Freemium: In this case, the product is free to use; however, functional restrictions are given unless users commit to a higher tier.
  • Storage based: Users can access the service at no fee but need to pay to exceed the storage limit.
  • By features: Depending on the number of features the user wants to use, they can pay to get more. Cheaper versions have fewer features, while higher prices get the user maximum functionality tier.
  • Per-user tiers: The parameter revolves around the number of people who can join the specified tier group. 

Organizations invested in SaaS apps can modify the settings and adapt the software to the vision they have for their features. However, they can't custom make the features of the code that they install.

SaaS's Future

What is the SaaS future going to look like? Specialist services will likely continue to be adopted, and development will continue. User relations with their providers are also likely to become more extensive - and even more complex, a data-backed eye-opener.

The growing tech industry has developed a product and service industry that operates on a continuous subscription payments basis. This development suggests that consumers' attitude has also changed from one-off customers to present customers with a continuing purchasing routine. 

Since the demand for massive amounts of data, backup, and software rises every day, companies are more likely to outsource IT to expert service providers.

As for already deep companies in SaaS, we should expect integrations and complete solutions that will focus their efforts on what they do best. In addition, it will contribute to the growth of long-term partnerships with service providers – leading to increased innovation, as the increasing requirements of consumers are better understood and addressed.

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