A kind of service is consuming the world, and it is now at every nook and cranny of the service industry, from large corporations to tiny startups; this new kind of service known as Software as a service (SaaS) has come to stay and to conquer. Also known as cloud-based software solutions, this new business and IT solution have become the most used deployment means for many business technologies globally.

With all these, you might wonder what software as a service is all about, why it could be a good option for your business, the advantages it offers, if it is flexible and affordable, among others. Therefore, in the post, we answer most of the important questions you may have about software as a service.

What is Software as a Service (SaaS)

Software as a service, shortened as ‘SaaS,’ is a type of software delivery and licensing business model based on a subscription basis, while its hosting is central and cloud-based. SaaS allows for the data and information that is subscribed to be accessed through a web browser and an internet connection. On the other hand, the software application vendors host and sustain the databases, servers, and codes included in the SaaS application.

In its simplest form, SaaS is where a third-party remote software provider hosts software applications for clients globally through the internet. Firms, companies, and other users will have to subscribe to these SaaS applications on a pay-as-you-go basis from their SaaS software providers. This advantage of having their software accessible through the internet from anywhere and anytime is a major reason many have embraced SaaS.

SaaS makes it easy for users. Instead of investing complex physical IT infrastructure in-house, all of the complicated infrastructure, software, middleware, and data are stored and maintained at an external data center. Giving up this responsibility to the SaaS service provider saves startups, small businesses, whose budget may not be large and lets them set up and run faster. On the other hand, large corporations can also choose to bypass setting the costly and complicated IT infrastructure.

In recent years, SaaS has become the most common delivery method for business applications such as; finance management, accounting, gamification, messaging software, customer relationship management (CRM), development software, enterprise resource planning (ERP, invoicing, inventory management, Human resource management (HRM), content management, among others. In light of advantages, software continues to be adapted for new areas of life day after day.

Some Top SaaS Examples

Some of the well-known SaaS companies in the SaaS space include the following;

  1. Dropbox
  2. Docusign
  3. Salesforce
  4. Slack
  5. MailChimp

1. Dropbox

This is a cloud-based ultra-modern workspace that helps to reduce the stress of work by hosting files. It was established in 2007 and offers file synchronization, cloud storage, and personal cloud services. 

2. DocuSign

Founded in 2003, this SaaS company accelerates business operations by offering its users the ability to sign documents electronically. The e-signatures are backed by US ESIGN Act and the EU’s eIDAS regulations. This simplicity it gives users in managing electronic agreements has made it a popular SaaS solution in more than 180 countries with more than 1 million clientele globally.

3. SalesForce

This is one of the largest SaaS companies in the world. It was established in 1999 and had its headquarters in San Francisco. Its services include a suite of cloud-based applications that offers marketing, sales, application development, customer service management, and business analytics. It has more than 100 000 client organizations.

4. Slack 

This is another top company in the SaaS space. The app Slack is a messaging program for businesses that gives users access to the information they need. It is strictly a workplace communication platform that offers access to chatrooms to get business information faster.

5. MailChimp

Founded in 2002, MailChimp is a cloud-based email marketing and marketing automation platform that offers its clientele marketing solutions through emails. With over 20 years of operation, this company had since become one of the top sought SaaS solutions.

What are the Features of Software as a Service (SaaS)?

As an IT service based on the internet, SaaS has some advantages similar to other cloud-based business models and while some other features are distinct to it. Some of the characteristics of the SaaS software delivery model include the following;

Easy Access

The SaaS delivery model allows for improved access from any device that can connect to the internet. This easiness makes it easier to monitor data use, manage privileges, and ensure that everyone sees the information simultaneously. The great feature of SaaS software is that you can gain access to them anywhere and anytime.

Easy Customization

Every user in the SaaS platform can easily customize the SaaS applications to fit his purpose to their business processes without a hassle. Users can customize to fit their budget in most cases, and these customizations do not affect the SaaS infrastructure. The amazing architecture of SaaS platforms allows for customizations to be unique to firms, organizations or users and be also preserved even when there are upgrades in the SaaS platform.

A Multitenant Architecture

Software as a service platform is characterized by multitenant architecture that allows applications and users to share the use of a common, single code base and infrastructure that is centrally maintained. SaaS software vendors can innovate more quickly because all the vendors’ clients use the same code base and infrastructure. This use of the same architecture saves them the time and effort previously spent maintaining multiple versions of outdated code with On-premise software applications.

Social and Collaborative Functionality

With the successes of many social networking services and web 2.0 functionality, many SaaS vendors and applications offer users and clients the capability to collaborate and share information.

Open Integration Protocols

SaaS applications and software do not have access to their users’ internal systems, such as internal services and databases. Hence, they provide application programming interfaces and integrations protocols that operate over a wide area network. This innovation had lead to the development of mashups, which further differentiates SaaS applications from on-premises software.

Use of the Consumer Web

With the SaaS business model, businesses can customize with point-and-click ease. This feature makes upgrading the code base and user interfaces easy and faster for SaaS vendors.

What are the Advantages of SaaS?

Easy Mobilization of Workers

The use of SaaS makes it easy for you to mobilize workers and communicate to the whole workforce. It makes for flexible workers, and apps don’t even need to be developed specifically for the project at hand, and the company’s workforce doesn’t need to be specialized. What’s more? SaaS allows for the workers to be sourced from anywhere. The feature has been the foundation for remote work in recent years. You can customize your security and IT needs in agreement with the SaaS vendor provider.

Lower cost

SaaS applications are highly cheaper and affordable when compare to other software services such as the on-premise software solution. Businesses and users no longer have to purchase and install the complex, expensive and permanent IT infrastructure in-house.

Involves Flexible payments

Unlike other software payments types like in the on-premises model, businesses and users that switch to the SaaS model have more control over the number of payments they make. Payments are predictable and, in most cases, customizable. What more? You can pay when you need the service as well as terminate the service when necessary.

Integrations and Scalability

Cloud-based services such as SaaS are highly scalable. Users can simply adjust to the features and options that they need. The SaaS will let you increase the number of features that you might need as the business grows, and you can also terminate the use of some other features.

Easier to Use

SaaS software involves no coding as the SaaS software vendor has already handled the coding. This feature makes SaaS generally easier to use. For you to use SaaS applications, you don’t need to be tech-savvy. You also don’t need to download some complex software, as seen in On-premises software. SaaS is generally easy to update, debug and implement.

Access Easy, Anywhere and Anytime

Because the SaaS platform exists in the clouds, you can access them with any device connected to the internet anywhere and anytime. This easiness has resulted in the growth of remote growth. What’s more? You can even do a group project when you all aren’t at the same place and time.

Data Security

The data of the work you do with a SaaS-based application or software, both personally or as a group, is always backed up in the cloud. This feature protects you against data loss or in a situation where your device fails, is stolen or lost.

Easy Setup

SaaS software is specifically easy to set up. You can have them up and running in a couple of minutes. You can also access customer care through the platforms on the setup process, and you will get a quick resolution to any issue.

Generally, SaaS offers more advantages to users, such as its removal of bureaucratic inconveniences, labor-intensive data management, among others.

What are the Disadvantages of SaaS?

Despite all the advantages that SaaS offers, there are some challenges, concerns, and drawbacks related to its adoption. Most of these disadvantages are centered around the following;

Data and Security

With the use of SaaS software and applications, your data will be stored in the cloud using the IT infrastructure of the SaaS service provider. This drawback entails having to trust that the vendor will take appropriate care of sensitive information.

There is also the possibility of third parties gaining access to such sensitive information or even the vulnerability of your data being affected by some internet malicious software such as malware, etc.

Delivery Speed

Since SaaS software and applications are delivered through the cloud, the delivery and speed of the service can easily be affected by slower internet connectivity.

These slow internet speeds can slow productivity and increase the time use for work, especially if the software is being served through an old server or from a very far location from the user location. Matter-of-factly, internal on-premises software and servers are generally faster than SaaS software and applications.

Loss of Control

Loss of control is a major disadvantage that comes with moving to SaaS. Businesses and users generally lose everything and will have the SaaS software or application vendor deliver, manage, and maintain the software, including the user’s data.

Limited Customization and Applications

The use of SaaS applications and software is limited to the features that the software vendor offers. Even though most of the SaaS offers a wide range of applications and customization, users have a cost of total applications.

The Need for Connectivity Requirements

Most SaaS software providers experience service interruption now and then. These disruptions can result in a data security breach, so it is recommended to get a service level agreement (SLA), other intricacies involved in SaaS, in place.

What is the History of Software as a Service?

The history of software as a service goes as far back as the 1960s as the rise and introduction of SaaS collide with the introduction and rise of cloud computing. However, both concepts’ origins can be traced to the concept of time-sharing, which dates back to the early 1960s.

Time-sharing was a service bureau business model used by IBM and other mainframe computer providers. It involved these computers providers giving from their global data centers access to databases and computing power to large corporations such as banks. This innovation made for cost-effective use of the expensive computer processor time.

However, in the following decades, there was a decrease in the cost of computing and hardware. So many corporations and businesses shifted to the use of on-premises personal computers, hardware and databases. But they continually also saw the increase in the cost of maintenance of both computer software and hardware.

Miraculously in the middle of the 90s, the growth and expansion of the internet came with a new method of centralized computing known as ‘application service providers (ASP). These new service providers offered to host and manage specialized business applications for startups, corporations and organizations. The largest ASPs were USI and Futurelink, which had their headquarters in Washington, DC, and Irvine, California.

Following this, new heights began to appear in e-commerce transactions, and these coupled to engineer the introduction and creation of the ‘online cloud.’ This cloud hence allowed organizations and businesses to access business applications anywhere and anytime.

In 1999, Salesforce started its customer relationship management (CRM) SaaS platform, making it one of the pioneers in the SaaS industry. With its good marketing strategy of ‘no software” mantra, it becomes a great force in the SaaS space in the United States. As other corporations and businesses begin to see the huge growth and returns from Salesforce’s SaaS model, they jumped into the business.

Though SaaS saw its full adoption in the 90s, the acronym which proliferated the distinction of the service from other types of online cloud services was first seen in 1985. It appeared in the goods and services description of a USPTO trademark file.

Today, you will see companies like Salesforce, Sage, Shopify, Intuit, and Adobe leading the SaaS space. Numerous businesses and startups using the model fill every nock and cranny of the business world.

What are the Differences Between Software as a Service and On-premise?

Before the advent of SaaS, On-premise software was the norm, but now software as a service has almost replaced it in all areas. The principal differences between On-premise software delivery and the SaaS model lie in the following;

The SaaS delivery method is more affordable and easier to manage than when your software is delivered on-premise. SaaS delivery doesn’t require complex and costly hardware in-house, and it also allows users and clients to outsource almost all of the IT responsibilities.

The SaaS delivery model saves the business or company time and cost, which it would have used to maintain the software in-house while using On-premise software. In contrast to on-premise software delivery, SaaS saves the time you could have used to upgrade to the on-site software.

SaaS software is paid on a subscription basis, whereas software launched on-premise is always purchased and paid upfront through a perpetual license.

SaaS software also makes it easy for startups and new businesses to start, unlike On-premise software delivery. The startups can use the complex infrastructure, which they could have done in-house due to limited budget and capability through the SaaS vendors.

What are the Differences Between Software as a service (SaaS) and Ather Cloud Services?

As many businesses move to the cloud, As-a-Service products are becoming a thing and continue to grow widely. However, three major categories continue to come on top; PaaS, IaaS and SaaS.

While SaaS offers software services through the internet or precisely the online cloud, it differs from the IaaS and PaaS service model based on the services they deliver.

Infrastructure as a service (IaaS) provides access to IT resources such as storage, servers. Databases, among others. It allows forms, organizations and individual users to purchase resources as at when they need them. Examples of IaaS platforms are Rackspace, Google Compute Engine (GCE), Amazon Web services (AWS), and Microsoft Azure.

On the other hand, Platform-as-a-service (PaaS) gives access to a software development platform over the cloud. It allows programmers and web developers to focus on software creation without worrying about things like infrastructure and storage. Some examples of PaaS platforms include Heroku, Force.com, Apache Stratos, Openshift, etc.

SaaS Versus On-premise: Which is Recommended?

The first and most important thing to consider while answering this question is to evaluate the complexity of your project, business or whatever you’re the SaaS software or application for as an individual user. However, in particular to companies, answering this question will help you understand if SaaS is the best option for you.

Some of the things that you could use to understand if SaaS or on-premises is the right option for your business are;

Is the functionality you need to be affected by off-the-shelf products?

What level of software customization and applications does your project need in the future?

Is your business specialized when compared to others (especially your competitors) in the industry? And by how much?

Another important factor that you are to consider is your budget. If your budget is smaller, you can just go for SaaS software. You must remember that SaaS platforms are based on subscription models for payments. This payment system makes it easier for startups and businesses with a small budget, as payments are spread over time. It also makes it easier for users with a smaller budget to use robust, modern software.

Today, most cloud-based software can give the same services as on-premise software, so it is no longer a question of functionality and flexibility. The decision to choose between on-premise and SaaS while considering along the lines of cost, budget, etc., also has a lot to do with data ownership. Though some SaaS software vendors will give you possession of the data, ensure to read and understand the service contract or terms and conditions.

Can I Customize SaaS Software?

Most cloud-based software is flexible and can be easily modified to fit specific businesses. Individual users can also customize SaaS software to meet their different uses.

Additionally, SaaS clients can customize the user interface (UI) to suit their liking and change specific areas, like data fields, to appear differently.

SaaS software users most times twerk the workspace to suit their personality. Users mostly tweak things such as the dashboard or task list to show the most information that is most important to them or the tasks that have been assigned to them.

Though SaaS and on-premise software can be customized and personalized in almost all aspects for each client or user, cloud-based software such as the SaaS offers more flexibility and agility to individual users and client companies.

What are the Differences Between SaaS and Cloud?

Software as a service and cloud-based computing or cloud-based services are two terms are well popular as the proliferation of more advanced software service continues.

The cloud is just like that the internet. It refers to a set of complex internet-based infrastructure technologies. In its simplest form, it involves a collection of servers, databases and computers that work together so users can have access to their combined power on a lease.

However, the cloud can refer to whatever is hosted online and delivered using the internet. So, all cloud programs that run through an underlying software in the cloud are cloud-based. It involves SaaS software and applications.

Hence, the difference between the cloud and SaaS is that SaaS exists in the cloud or SaaS software and applications are delivered through the cloud.

What is a Private Cloud?

The IT infrastructure that exists in the cloud is mostly public. Still, the private cloud mirrors the functionalities and features that user get from using the online cloud. A private cloud takes the infrastructure that runs on a public online cloud and keeps it on-premise. Users of this private cloud will get the same features, functionalities, features and ability to use a web browser to access their data. You can do this with any device that can connect to the internet.

In contrast to the maintenance efficacy of the public cloud, all private clouds need an IT department that will continually run maintenance, upgrades and upkeep. In the same way, while working on the public cloud can be cheaper, setting up your personal ‘private cloud’ can cost a lot, and you might need some investment in IT infrastructure to develop and maintain a private cloud.

In retrospect, you must know that to get a return on investment from a private cloud, and you would need to establish large and complex projects. However, this might be the best option for you if you’re running a large enterprise and don’t want your information on a public cloud.

Who Owns My SaaS Data?

In most cases, the contracts with most cloud-based platforms allow that your data is yours.

You can confirm this with the Service level agreements (SLA) with the SaaS vendor. This agreement will show the ownership of your data existing on the vendor’s servers and the right to retrieve the data when you want.

What more? Many Service level agreements (SLAs) also have prepaid and built-in contingencies that give you access to your data if the SaaS vendor goes out of business. This agreement assures you that you own the data.

Most SaaS software vendors will allow you to export your data and store it locally whenever you want. However, to ensure that these are enshrined in the SLA, you must do proper scrutiny before you commit your data and subscribe to the services of the SaaS service provider.

As an enterprise, company or business, make sure to scrutinize the Service level agreement with your stakeholders as this is a very important and complex document. These aspects of the Service level agreement are the most important to be carefully reviewed;

  • The responsibilities you have as a client, including those that relate to you giving timely notification of any technical issue to the SaaS vendor.
  • The Responsibilities of the SaaS software provider for updates, upgrades, support, and security of your data, etc.
  • Guarantees for efficient services, such as how a customer can respond to poor service, money-back, level of uptime, etc.

As the SaaS is in the Cloud, is My Data Safe in the Online Cloud?

Many software users ranging from companies to large corporations to individual users are always wary of their data security. Therefore, SaaS software vendors work to provide the best security in their databases, platforms and servers. They will make use of highly secured public cloud servers to deliver their software and store your data.

Therefore, your is at more risk and susceptible to malicious internet content and activities in-house using 0n-premise software than with SaaS software stored in the cloud. This vulnerability is because there is less security due to the due lower budget. Also, employees or users can mistakenly leak essential data or promote gaps or make leakages to develop in the security infrastructure.

The truth is that SaaS platforms and their vendors whose software is delivered through the cloud can invest more in backups, maintenance, and security upgrades to give you the best of data security.

What Happens If My SaaS Vendor Goes Out of Business?

Like every other business, SaaS vendors can also close shop at any time for many reasons because of business failure or industry consolidation. For whatever the SaaS vendor might close, the data about your software is yours, and you have to it.

Hence, for this reason, among others, many SaaS vendors host their data center to continue going even when the business is no more by making some prepayments for such future occurrence. This preparation gives their clients the appropriate time to move their data to another SaaS software vendor or make local backups of the data. This simple prepayment is done to safeguard the vendors’ data in the event of a closure or business failure.

It is also important that you ensure a provision in the SLA that provides for this safeguard if your SaaS closes shop. Other things that you should inquire about your SaaS vendor include;

  • Does the SaaS vendor have a technology roadmap?
  • How long has the SaaS vendor been in business?
  • Is the SaaS vendor growing in the number of employees and customers?

Though it is standard today, the most important thing is to ensure that the SLA provides for the exportation of your data from the SaaS vendor. The clause in the SLA that provides for this must also include the data format to be exported and how often you can do exportation. However, it is common for the SLA to allow for a charge by your software vendor for the data exportation or migration.

What are SaaS Adoption Drivers?

Many serious challenges users had come across while making other types of software, especially on-premise software, had skyrocketed the growth and adoption of SaaS in the business world. Changes and improvements in science and technology and the changes in the software market have also helped promote the continual growth and general acceptance of SaaS applications and solutions. Some of such SaaS adoption drivers include;

  1. The standardization of web page technologies with Javascript, HTML, and CSS. These programming languages, coupled with the growth of web development becoming a practice, helps promote the multiplication of SaaS solutions.
  1. The introduction and web applications frameworks like Laravel and ‘Rubt on Rails’ eventually becoming common decreased the cost of developing new SaaS applications and solutions. This decrease in cost made SaaS service providers develop more software and applications that were more competitive and challenged the traditional on-premise software vendors.
  1. The use of broadband internet access, which is now popular, has made it possible for centrally hosted applications, such as SaaS to offer competitive speeds to customers than on-premises software.
  1. The increasing acceptance and use of web-based user interfaces reduced the need for the normal ‘client-server’ applications. This problem was worsened by the on-premises software vendor investing in software focused on ‘fat Clients.’ Both of these combined exacerbated the predicament of traditional on-premises vendors and opened the door for cloud-based software like Software as a service.
  1. Another adoption driver that promoted the wide adoption of SaaS applications is introducing lightweight integration protocols like SOAP and REST. These integration protocols made integration

with cloud-based software cheaper and easy.

  1. The standardization of HTTPS protocol made provision for lightweight security that was adaptable to many applications and software.

What are SaaS Adoption Challenges?

There some issues that are acting as drawbacks when it comes to adopting SaaS applications and software. These issues and some questions that have been left unanswered are some of the things that are slowing down the adoption of SaaS and, in some cases, causing its prohibition to be used in some businesses. Some of these are;

  1. Because SaaS software and applications are hosted in the cloud, and the distance can be far from users, this brings latency in using the software. This challenge, therefore, makes the SaaS model unsuitable for users and applications that need its response time to be fast.
  1. Many users face a major problem or challenge: switching from on-premise software to SaaS software or from one SaaS software to another can involve a difficult and slow transfer of data over the internet.
  1. Even though the Multi-tenancy architecture feature of SaaS platforms makes for cost-efficiency, it limits the customization of the applications of large corporations. This drawback makes these applications not to be used in scenarios where they are needed. It doesn’t argue well for SaaS software and applications.
  1. Some companies and businesses won’t take up the adoption of SaaS because the data is being stored on the SaaS service provider’s server. It is a very serious issue challenging the adoption of SaaS, especially with companies with data security priorities.
  1. The easy access to clients’ data due to seizure warrant laws and constitutional search laws on SaaS stored data is the main issue in SaaS adoption for many businesses and users.
  1. As a result of the accelerated feature delivery that involves quicker updates and upgrades made by SaaS vendors, companies and individuals might find themselves forced to adopt and adapt to new versions of the SaaS software. This situation might increase the probability that a user might make mistakes while using the software, unforeseen training cost, and trouble from bugs in the newest SaaS software version.
  1. People also fear that SaaS service providers cannot guarantee the uptime they promise in the Service level agreements (SLAs). Depending on the internet connection’s speed, the software data are transferred based on the internet speed than with the internal network’s higher speeds. This problem can even be worse if the distance between the user and the cloud is large.
  1. The fear that the SaaS users might lose access to their data and the software as a whole. This issue relates especially to cases where the SaaS vendor goes out of business or EOL the software and is another challenge facing the adoption of SaaS. Such occurrence will disrupt any business or company’s current and future projections. In some cases, users or clients are left with data they cannot use or modify.
  1. Another issue is that in some situations where a business SaaS application needs integration with a user’s current data, this can be difficult. For such integration, the user’s current data can be large and integrating with such a large volume to a remotely hosted cloud-based software can be costly. The data can also be sensitive, and integrating can be risky or conflict with some data governance regulations.
  1. Some other things affecting the adoption of SaaS software and applications in many business areas include the incompatibility with some hardware, operating systems and other software. You can also see some compliance and licensing problems where some unauthorized copies of the SaaS software program can put the company or user clients at the risk of lawsuits or fines.

What are the Operating System and Internet Limitations of SaaS?

While some people interested in SaaS may want to start using it worry about its compatibility with their device’s operating system, you must not. The reason for you not to worry is because it is very difficult for the operating system of your device to be a challenge if you want to start using SaaS software.

You must know that most SaaS software is delivered through the cloud and can be easily accessed using web browsers. You might only need to download a web browser that will best fit the SaaS software in an extreme case.

Another major drawback and downside of SaaS are that it depends on internet connection. For SaaS software and applications to work at their best, they need an internet connection and a fast internet connection. Hence, if you as an individual user or your company is located in the remote countryside, the internet data connection might not be sufficient for the best SaaS software experience.

Though many believe that on-premise software does not have connectivity issues and is more reliable, they do have downtime like every other system. They are quite susceptible to hardware failures, electrical outages and some other issues that are similar to downtime as seen in SaaS software.

SaaS service providers have developed an “offline” functionality that allows users to get using the SaaS software even when the internet goes down to solve the problem of downtimes and slower internet speeds. Then once the internet connectivity comes up again, the data is reconnected and uploaded to the system in the cloud.

How Best Can I know if I’m Ready to Move to SaaS?

The best way to know if you are ready to move your business to the cloud and precisely SaaS is by going through all the questions answered above. Also, ensure to involve the most important stakeholders of your business when you are going through these questions.

These will help you make the best decision while deciding whether to move to the cloud, when, how, what will be the most effective type of deployment to meet the needs of your business, etc.

Conclusion

Now you know a lot about Software as a service, it is time you adopt it in your business. If you’re worried about the drawbacks and disadvantages, you must know the advantages outweigh those drawbacks and challenges.

The truth is the now is the right time to start using SaaS software applications and watch as its positive impacts help your business grow and scale high.