Software as a Service (Saas) – Comprehensive Concept

Software as a Service (Saas) – If you are new to the concept of SaaS, then this article is meant for you. You will know what is SaaS, what it can do for you, how SaaS is different and more about Software as a Service applications.

What is SaaS ?

Software as a Service is a software delivery method that allows software and its functions to be accessed from any device with an internet connection and a browser. The applications are hosted in the cloud and can be used for a variety of tasks to be performed by both individuals and organizations.

In short form Software as a Service means a provider hosts an application centrally and provides access to multiple users across various locations through the internet for a fee.

Software as a Service applications are called Web based software or hosted software. SaaS runs on a SaaS provider’s servers.

Utilising Software as a Service (SaaS) is similar to renting software rather than buying it. Previously you would purchase a software and install it in your computer. Through Software as a Service you just subscribe to a software on a term basis usually monthly basis.

Software as a Service has become a widespread software delivery model as the web services have become more popular with its improved technologies and developmental approaches. Due to the increasingly available broadband services we are able to easily access different areas of the world.

Google. Facebook and Twitter are typical examples of Software as a Service which lets you to access the service by means of any internet enabled device.

Understanding Software as a Service (SaaS)

Software as a Service is often compared with Application Service Providers (ASP) and on demand computing software models. Earlier these applications had a lot of things in common with traditional on-premise applications. But now Software as a Service applications has developed a lot in its architecture and licensing.

Today, Software as a Service applications are centralized with a multi tenant architecture to provide comparatively best experience than on-premise applications.

On-premise software uses a one-time licensing model whereas SaaS uses a subscription model where access to the software is frequently sold either directly by the provider or an agent called an aggregator.

The cost of SaaS varies from application to application. Some SaaS providers charge a fixed price for access to all the application’s features, while some providers charge a varied price based on the usage of the application.

You can customize the SaaS applications like the data schema, workflow and other aspects as per your business need.

Software as a Service providers also provide a high security mechanism to protect the data of the customers while transmission and storage.

A good example of Software as a Service model is a bank. It protects the privacy of the customer while at the same time provide more reliable service to them. All the customers of the bank use the same technology without the fear of anyone accessing their personal information without proper authentication.

Objective of SaaS

• Reduce the investment in server hardware by sharing end user licenses
• Reduce hiring costs of software

Models of SaaS

There are two models of Software as a Service

• Hosted Application Management Model
• Software On demand Model

In the hosted application management model the provider hosts the readily available software for the customers and delivers it through net.

In the software on demand model the provider gives web based access to its customers only to a specific section of the application created explicitly for SaaS distribution

Benefits of SaaS model

There are a number of reasons why SaaS is more useful for individuals and businesses of all sizes and types. Here’s what is driving customers to use Software as a Service

• No initial setup costs – The applications once subscribed by you it is ready to use
• Time management – SaaS applications needs only less time to be spent in installation and configuration
• Reduces the work of IT department – SaaS applications are handled by the hoster and thus it helps the IT department to concentrate more on the activities that helps in attaining the goals of the business
• Lower costs – SaaS is operated in a shared environment where the hardware and software license costs are low when compared to other software models
• Low maintenance costs – If you want to improve the storage capacity it can be done without installing any new hardware or software
• Scalability – SaaS resides in a cloud environment that is scalable.
• Seamless Integration – SaaS can be integrated with a number of devices such as tablets, laptop, desktop and other internet enabled phones. SaaS can be customized to meet the needs of a particular customer
• New Upgrades – If the SaaS providers upgrades the software then it is available online to you with free of cost. Even if it is available for cost it will be lower than the traditional model up gradation cost
• Easy accessibility – SaaS applications can be accessed from anywhere and from any device that uses internet

SaaS characteristics

Software as a Service has several characteristics that makes it unique from other services. Few of the important characteristics are listed below

• Configurability

SaaS offers various configuration options like Social site extensions, blog interface, network content access and custom tool modules. These options can be used by the user at any time as per their need for the site.

• Multi-Tenant Efficiency

In SaaS all the users share a common infrastructure and code which is centrally maintained by the provider. Through this way users can save their server space, cost and maintenance. Updates are automatically notified to the users and made at no cost or sometimes with less cost. This will also save a lot of time for you.

• Easy Customization

SaaS applications can be easily customized to fit your business purpose without affecting your common infrastructure. Software as a Service is designed in such a way that the customizations are made unique to each company or individual. Updates are also made with less cost and less risk.

• Scalability

Software as a Service has a multi tier structure that implements a load balancer. Without modifying the entire structure of your software the capacity of your system can be adjusted by adding servers as per your demand

• Easy access

You can access to the data easily from any device that uses internet. This will help you to manage your data and make sure that everyone sees the same information at the same time.

SaaS and On-premise Application

Software as a Service application and On-premise application are differentiated using three major dimensions – Licensing, Location and Management

• Licensing

On-premise applications are licensed with a single cost for each user or site

SaaS applications are licensed based on two models – Usage based transaction model and time based subscription model. In usage based model the user is billed for the number of service transactions used. In the second model the user pays for a particular period of time for which he has subscribed.

• Location

On-premise applications are hosted in the users IT environment. The application provider also provides a hardware or software part called ‘black box‘ which will be installed in the users location.

SaaS applications are hosted in the provider’s server. No hardware or software is installed in the users place.

• Management

In On premise applications the entire responsibility lies with the IT department of the company. The IT people should be familiar with the network, server and application functions. They should also be able to troubleshoot the problems and take care of the reliability and security of the application. This was a big deal and some companies even outsourced this work to a third party who specialize in IT.

While with SaaS, the application is completely handled by the SaaS provider or vendor. Service Level Agreements rule the support and service to be provided by the vendor to the user.

Considerations for embracing SaaS

There are few things that should be taken into account before using Software as a Service application in an organization. Here are four major factors that affect SaaS

• Political

Some important people in the organization will feel that certain functionality of the business should remain under the support and control of IT department. In such situations Software as a Service and other applications are considered unimportant. If a test application is deployed in the organization by the provider then there are chances of the managers to approve such applications.

• Technical

SaaS provides customization option to its users but there are few limitations in it. If a particular technical knowledge is required to operate a SaaS application and if it cannot be afforded by the Software as a Service provider then it becomes difficult for the user to run the SaaS application.

Another important factor is the amount and type of data transmitted to and fro the application. The data transmitted between the servers should be done quickly. So the companies always prefer a SaaS solution that takes network latency into account.

• Financial

SaaS application is usually considered lower than the On premise application. But the long term cost of SaaS application is not sure. The things that affect the cost of SaaS application includes the number of licensed users, amount of customization which need to be done for your business and your data centres’ economy of scale.

• Legal

Some industries are subject to law in different parts of the world. They need to maintain various reports and records. Software as a Service application will not be able to satisfy all such needs of the customer. SaaS providers should also meet your internal standards regarding your data security and privacy in order to avoid any legal problems.

SaaS application should meet the rules and regulation of the jurisdiction in which the organization operates.

Is SaaS suitable for your organization ?

SaaS is not suitable for all the organization nor do all the applications can lend themselves to SaaS delivery model. There are few criteria’s to be considered while deciding about SaaS application for your business. The important factors are listed below

• The type of process for which you are going to use SaaS application
• The amount of customizations to be done
• The integration of SaaS application with other systems in your company which includes both internal and external
• The term of the application

SaaS application is usually best suited for processes which are simple, standard and not too much dependent on other functions and systems of your business.

SaaS also works best for the functions which are automated for the first time as there will be few changes to be made.

A function which is related to the core of your business like ERP and others do not lend themselves to Software as a Service so for such functions you need to go with other onsite solution. This will help you to manage the application as it runs.

If you need to customize a SaaS product then it will take more time for implementation. Customization will shoot up the SaaS vendor’s cost and it also involves a lot of complexity. As a result many vendors refuse to do customizations and even if they do they do it for a high cost.

So if you are going to do a customization to your SaaS product be aware about the charge for it and whether it is affordable for you.

The more the integration the longer the SaaS implementation. So SaaS providers pay attention to things that ease the integration process.

SaaS can work best if you are purchasing a new application from a vendor who is going to frequently update the application for its enhancement.

Conclusion

SaaS has a lot of advantages and thus Software as a Service remains a fascinating option for many enterprises . Businesses can do well by adding SaaS to their portfolio of IT services. An internet connection is all that you need for SaaS. Incorporating SaaS application in your organization considers only two critical factors – integration and composition.

When you are selecting a Software as a Service application find out what your company wants from it and then proceed.

When you are selecting a Software as a Service vendor know about the company, its reputation, reliability, market position, price and security of their product.

Hope this article would have helped you to know what Software as a Service is.

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