Software as a service (SaaS)

Software Distribution Model

Software as a service (SaaS) is a software distribution model in which a third-party provider hosts applications and makes them available to customers over the Internet. SaaS is one of three main categories of cloud computing, alongside infrastructure as a service and platform as a service (IaaS and PaaS).

Service Oriented Services or Software-as-a-Service (SaaS)—also known as cloud-based software—is now mainstream. From massive corporations to tiny shops, cloud-based software is the default deployment method in 2020 for nearly every type of business technology in the world.

And for good reason. Business applications delivered via a web browser lack painful installations or strict contracts, and are paid for over time instead of all at once. This usually makes the systems more flexible and affordable enough for any budget.

Yet many of the business leaders we speak to everyday at Software Advice still have questions about SaaS and want to know why it could be a good choice for their company.

The software application could be anything from office software to unified communications among a wide range of other business apps that are available.

What is Software as a service (SaaS)?

SaaS is a method of software delivery that allows data to be accessed from any device with an internet connection and a web browser. In this web-based model, software vendors host and maintain the servers, databases, and the code that makes up an application.

The cloud-based model is so common now that more than 60% of software seekers who call Software Advice only want web-based products—less than 2% specifically ask for on-premise software.

The traditional on-premise software delivery model differs from SaaS in two key ways:

SaaS deployments don’t require extensive hardware, which allows buyers to outsource most of the IT responsibilities typically required to troubleshoot and maintain the software in-house.

SaaS systems are typically paid within a subscription model, whereas on-premise software is usually purchased through a perpetual license, paid upfront.

Software as a service (SaaS)

On-premise users can also pay up to 20% per year in maintenance and support fees. The annual or monthly subscription fee for a SaaS system will typically include the software license, support, and most other fees.

Software as a service is a way of delivering centrally hosted applications over the internet as a service. SaaS applications are sometimes known by other names:

-Web-based software

-On-demand software

-Hosted software

Understanding Software-as-a-Service (SaaS)

The rise of Software-as-a-Service (SaaS) coincides with the rise of cloud-based computing. Cloud computing is the process of offering technology services through the internet, which often includes data storage, networking, and servers. Before SaaS was available, companies looking to update software on their computers had to purchase compact disks containing the updates and download them onto their systems.

For large organizations, updating software was a time-consuming endeavor. Over time, software updates became available for download through the internet, with companies purchasing additional licenses rather than additional disks. However, a copy of the software still needed to be installed on all devices that needed access to it.

With SaaS, users don’t need to install or update any software. Instead, users can log in through the internet or web browser and connect to the service provider’s network to access the particular service.

SaaS is considered an example of endogenous growth theory, which is an economic theory that subscribes to the belief that economic growth can be achieved through developing new technologies and improvements in production efficiency. Technology companies, financial services companies, and utilities have led the business world in adopting SaaS technology.

SaaS offers a variety of advantages over traditional software licensing models. Because the software does not live on the licensing company’s servers, there is less demand for the company to invest in new hardware.

It is easy to implement, easy to update and debug, and can be less expensive (or at least have lower up-front costs) since users pay for SaaS as they go instead of purchasing multiple software licenses for multiple computers.

SaaS allows your organization to get quickly up and running with an app at minimal upfront cost.

Why is the SaaS model important?

In the early 2000s, the first generation of SaaS solutions was siloed, inflexible, and designed to solve a single business problem. Since then, SaaS has evolved dramatically. Today, a modern cloud suite can span—and connect—everything from financials, human resources, procurement, and supply-chain processes to commerce, marketing, sales, and service solutions. Other benefits of a modern, complete SaaS solution include:

-Connected, end-to-end business processes built-in

-Ease of configuration and personalization

-Rapid data portability

-Comprehensive cloud security

-Embedded analytics

-Support for emerging technologies, from artificial intelligence (AI) to chatbots, Internet of Things (IoT), and more

The SaaS model can reduce costs for IT infrastructure that would previously have hosted the applications. It can also minimize some of the time spent on management tasks, because a SaaS provider is responsible for upgrades and management.

Why is the SaaS model important?

The SaaS model often makes sense as various technology trends require faster, more agile, and on-demand architectures as well as more rapid software updates. Technologies that have fueled demand for SaaS include cloud computing and edge computing, 5G and Wi-Fi 6, Internet of Things-connected devices, collaboration technologies, mobility, and immersive experiences enabled by artificial reality (AR) and virtual reality (VR). These technologies can be data-hungry and compute-intensive, and require low-latency, high-performance infrastructure on which to perform.

Many business applications are now available in the SaaS model, such as email, sales management, customer relationship management, financial management, human resource management, billing, and collaboration applications.

Advantages of Software as a service

  • Gain access to sophisticated applications:

To provide SaaS apps to users, you don’t need to purchase, install, update, or maintain any hardware, middleware, or software. SaaS makes even sophisticated enterprise applications, such as ERP and CRM, affordable for organizations that lack the resources to buy, deploy, and manage the required infrastructure and software themselves.

  • Pay only for what you use:

 You also save money because the SaaS service automatically scales up and down according to the level of usage.

  • Use free client software:

Users can run most SaaS apps directly from their web browser without needing to download and install any software, although some apps require plugins. This means that you don’t need to purchase and install special software for your users.

  • Mobilize your workforce easily:

SaaS makes it easy to “mobilize” your workforce because users can access SaaS apps and data from any Internet-connected computer or mobile device. You don’t need to worry about developing apps to run on different types of computers and devices because the service provider has already done so. In addition, you don’t need to bring special expertise onboard to manage the security issues inherent in mobile computing. A carefully chosen service provider will ensure the security of your data, regardless of the type of device consuming it.

  • Access app data from anywhere:

With data stored in the cloud, users can access their information from any Internet-connected computer or mobile device. And when app data is stored in the cloud, no data is lost if a user’s computer or device fails.

Take advantage of new technologies quickly

If you are reading this, then the chances are you probably have an idea for a SaaS platform just like we did. Also, like us, you are probably keen to get started building it (if you haven’t already).

Get uninterrupted access to the specific software you need to make fast, accurate business decisions with SaaS offerings from Faremco. We offer standardized, off-the-shelf solutions available for immediate use to gain tangible results. Our SaaS offerings provide fast, flexible and focused value.