12 Jun 2019
Software as a Service(SaaS) is a licensing and delivery model of the software hosted on servers on a subscription basis. SaaS allows the user to access software from any device via the internet. Users can work from anywhere as long as they can go online. It is a common delivery model for many business applications to manage Projects & Tasks, Sales Pipeline, Customer Support, Collaboration & Knowledge Management and much more.
SaaS model as we know today was shaped back in the 1960s when mainframe providers like IBM shared computing power and database storage facility to large organizations like banks, insurance companies, stock exchanges.
Generally, SaaS providers charge monthly or annual subscription fees. Thus reducing the upfront cost of deployment of traditional software providers where they change unlike one-time license fee along with additional charges for support and maintenance as well.
Some SaaS vendors offer applications using the freemium model. This model helps users to understand the intricacies and evaluate whether the application solves their problems or not.
Common characteristics of SaaS applications:
- Easy to scale because of flexible subscription-based licensing
- Companies get what they need and pay for what they use according to a tiered pricing structure
- Faster deployment which reduces efforts for installation
- Regular security and feature update over cloud instead of manual update
- No requirement of additional IT infrastructure or overhauling of hardware just to use the app
- Users can work on PC or smartphones with internet connection irrespective of location(Some PWA based SaaS allow offline functionality as well)
- Provision of training videos, webinars and everything else to train new users of the SaaS platform
- Based on SLA while making a purchase of SaaS platform, SaaS vendors are bound to provide access to user data even if they go bankrupt
- Access to user behavior within the applications(via web analytics) helps in the identification of areas for improvement
- Uniform API technology of SaaS Applications and other internet services promotes the development of lightweight apps that leverage the combination of data & functionality
Even though SaaS has multiple benefits, this model has its own limitations which prohibit this model from being used in some cases. It is not suitable for applications that demand response time in milliseconds like High-Frequency Trading(HFT) firms or Hedge Funds Firms and other alike. SaaS model is also not viable for the organizations when they have very large and sensitive data as the cloud deployment increases the risk of data security breach and cost of storing and accessing data over the internet.
SaaS model may be a better solution for small and medium business but if the business is large or its processes are complex, the legacy on-premise deployment is the way to go.
Business owners are always looking for cost-effective and latest solutions that help in achieving their goals. They don’t want the hassle of maintaining security, uptime, and performance.
SaaS providers take care of all these pain points which mean businesses can operate hassle-free and business owners can tick one thing off their worry list.