Software as a Service SaaS in Cloud Computing Explained

One of the fastest growth areas in cloud computing is Software as a Service. SaaS has revolutionized the way companies access software. It’s rapidly expandable, cost effective, mobile accessible and the way software will increasingly be delivered in the future.

Let’s examine Software as a Service and see if it’s a good fit for your company.

What is Software as a Service?

Software as a Service is defined as software that is delivered over the Internet. A host provider licenses an application or a suite of applications to customers using one of three models. Customers can receive SaaS as a service on demand, through a subscription (monthly or annually) or using a “pay-as –you-go” model. A fourth model is increasingly being seen which provides SaaS at no charge when providers can develop an alternate revenue stream such as advertising or customer list sales.

SaaS is annually growing at double digits rates and it is becoming the new normal in software delivery. As a result it’s important that buyers and consumers of technology have a working understanding of Software as a Service.

The Characteristics of Software As A Service

Like IaaS, and PaaS, Software as a Service has specific defining characteristics including:

  • Offering web access to commercial software
  • Software is managed from a central location and does not reside locally
  • Software is delivered as a “one to many” model
  • Host providers handle all upgrades and patches
  • APIs allow for integration between different software programs

Is Software As A Service A Good Model For Your Business?

SaaS is a rapidly growing technology that will most likely touch every business at some point in the near future. If you’re contemplating a move to the cloud, or if you’ve already migrated you may want to examine areas where SaaS may be a good fit for your business. There are particular situations where Software as a Service makes sense.

Some examples include:

  • General use programs that offer users no competitive advantage, such as email.
  • If your organization requires significant interplay with your customers, such as delivery of an newsletter via email campaign software such as email service providers (Mailchimp, Constat Contact)
  • Applications that connect mobile users with the office, like CRM or mobile sales management software.
  • Programs needed for short term or collaborative work such as graphic design or collaborative word processing software.
  • Seasonal or occasional needs such as tax software, or monthly billing programs.

While SaaS can be useful for many businesses, it is not a “cure all.” You may still need to host certain types of programs in house. Because it is accessed via the Internet, any function that requires extremely fast response or processing of real time data may not be a good candidate. In addition, regulatory requirements that demand specific data handling practices may need to remain in-house. And finally, if you have an existing on-premise solution that fulfills all of your needs, Software as a Service may not be right for you.