SaaS: How Software as a Service Benefits Businesses
Software as a Service, abbreviated as “SaaS,” has been causing big shifts in the way businesses look at their enterprise solution and internal IT, but what is SaaS anyway, and why should you care? SaaS is a cloud based software deliverance method that describes software hosted offsite, and that is accessible over the internet. If you look at that simple definition, you may start to realize you are more familiar with SaaS than you initially thought. Sites you use, such as social media platforms like Facebook and Twitter, as well as search engines like Google and Bing, are all examples of SaaS at work. With software as a service you are subscribed to an application rather than the owner of it, and are able to access it through nearly any internet enabled device. As briefly seen in the examples, SaaS is far from limited in its capabilities and potential, and is in fact capable of being used by a wide range of individuals to complete an even wider range of tasks.
While the opportunities are nearly endless for what can be delivered through SaaS, for our purposes we are going to lightly focus on SaaS as it pertains to your business, and your enterprise software. Throughout the history of digital business operations, companies have been forced to purchase both the software and the hardware capable of supporting it, in order to have a powerful ERP for their business. With enterprise SaaS solutions, this initial expense of purchasing the software and hardware, as well as the additional costs of maintaining both, are eliminated, and replaced with subscription based payments. The SaaS model has been particularly prosperous in recent years, so let’s dive a little deeper into why that’s the case.
Benefits of SaaS
Easy, inexpensive initial implementation
With your solution being delivered as SaaS the initial setup requirements are cut significantly, both in terms of time required and costs. Software delivered through SaaS is specifically designed to be ready to install and configured quickly and efficiently. The company benefits from the ability to provision a software that’s already been set up in the cloud, saving time and reducing errors. Many SaaS vendors additionally offer trials of their software. These are often time based, rather than feature limiting, allowing decision-makers to engage with the software, and discover whether or not the product is going to be right for the business, without the need to specifically configure a demo on site.
Lower upfront costs
Unlike on-site solutions, the implementation of SaaS requires little to no additional costs in hardware because the back end of the software is run on the provider’s infrastructure. Additionally, the subscription based nature of SaaS eliminates the need to pay licensing fees, thus reducing the price of entry. Furthermore, the company benefits from significantly reduced IT costs, both up front and though out the life of the business, by reducing the amount of hardware required on site, as well as reducing the number of IT staff needed to maintain systems.
Easy learning curve
The learning curve for SaaS is significantly reduced from clunky on-site solutions. The program runs within the familiar confines of your web-browser of choice, and is delivered through the aid of hands on demos and the subscription based model.
Accessible from anywhere
When your enterprise software is delivered as Software as a Service it is accessible from anywhere, so rather than being limited to the computers on which your software is installed within the confines of the workplace, these applications can be accessed from around the world. That is to say, so long as you have an internet connection and a compatible device, the power of your enterprise software is just a URL and log in away. This on-the-go accessibility is ideal for travelling businesspeople who want ongoing access to vital information.
Cross platform ease of use
SaaS delivered solutions benefit from being more widely compatible with different devices, thanks to their being confined within a web browser. This makes SaaS software ideal for the user with devices using various operating systems, and the need to access their business from all of their devices.
Always open and accessible
The availability of your enterprise software is critical to your business’ efficiency and continued profitability, so it is essential that your software be there when you need it. For an SaaS supplier, hosting your software is the name of the game, and a product experiencing downtime is far from their best interest. Because of this, you can rest assured that economies of scale enabled investment in infrastructure stability is at the top of these providers' list of priorities. You’d probably be surprised how much downtime your on-site solution actually experiences compared to that of a hosted solution. That being said, it's always important to ask your provider about their availability history, as I’m sure most of them would be happy to show how their commitment to stability stacks up against your own track-record.
Flexible and Easy to Own
With software as a service the usage you desire is able to be scaled on demand, meaning that users who need more storage capacity are free to scale by simply upgrading their subscription. The number of users and features can also be increased and decreased with a click of a button.
Pay for what you use
With your enterprise software delivered as SaaS you are able to benefit from the unique nature of software in a pay as you go business model. Because of the delivery method, introduction of the software into your business is flexible, eliminating both the need to purchase both the hardware and software of legacy systems, and replacing it with a subscription based recurring expense. This expense benefits from being at a fixed value (provided you don’t change your level of service), enabling you to budget accurately and avoid the unexpected expenses that can come with an on-site solution.
Updating enterprise grade software is a time consuming, and often expensive pain for countless decision-makers across the globe. With software as a service, your provider handles the work for you, taking away the woes of updating and patching your business’s software. These automatic updates can help significantly free up your IT staff to work on other projects that improve the value and efficiency of your organization. You probably barely notice upgrades to the SaaS applications you use everyday, like Google, yet you are likely to notice improved performance of new features that pop up from time to time. With SaaS enterprise software, updates to your business can be this easy.
It's incredibly difficult to compare the economics of doing business within the SaaS model and the software licensing model. Because of this inherent difficulty, one of the trickiest questions is also one of the most commonly asked: “Will SaaS actually end up costing me more in the long run?” Unfortunately for those asking, the answer is most likely to be something along the lines of, “It depends.” This is because each model has its own economic benefits and downsides, depending heavily upon the specific needs and situation of the person asking. In order to compare the two services, you’d have to be able to compare the cost of the subscription with the total cost of running the same system on site, including the calculated probability of hardware failure, as well as energy costs, and other variables, all while trying to directly replicate the experience offered in the SaaS model.
More general analysis is possible. Total cost of ownership is calculated by looking at all the direct and indirect expenses incurred by the software. Ultimately, SaaS solutions typically end up around the same total cost of ownership of an on-site solution and the associated hardware after about 3 or 4 years of monthly payments. This does notably exclude both the aforementioned risk of hardware failure, and the expense of personnel. The larger benefit of the SaaS economic model comes during its initial implementation, however, with its lower upfront costs and cheap implementation. If you want to take the time to compare the TCO’s for yourself, CIO ran a great piece on calculating the total cost of ownership for enterprise software, including some notes on the TCO of on-site solutions vs. cloud based solutions.
SaaS and your Data
When it comes to private data, you can never be too safe. That's why after cost, security is the biggest concern associated with SaaS. Security for your data means security for your company, but the truth is that your server's security is largely independent of its proximity to your desk. Where the difference between an on-site solution and a software as a service solution can really be seen is in the level of investment in stability and security. Thanks to the scale of most SaaS vendor’s data centres, they are able to make massive investments in infrastructure, ensuring your data is more secure than you could probably mange on site.
The methods through which a SaaS provider secures your data can vary between providers, but for the most part SaaS security falls into three specific categories; identity and access management controls; logging and monitoring controls; application and data controls. Identity and access management controls are the tools through which the SaaS determines what each user is able to do within the system by identifying the user and their associated permissions. Application and data controls are the meat and potatoes of your data’s security, working to encrypt data, prevent loss and detect and store your sensitive data. Logging and monitoring controls are a bit more self explanatory, helping to detect breaches, inform staff and begin the process of correction.
Beyond concerns about security, business owners are also sometimes hesitant to trust an SaaS provider because they fear they would no longer own their own data. The key to avoiding this problem is a combination of selecting a reputable SaaS vender and careful examination of your service level agreement (SLA). Still, most SaaS platforms (including PBE3) let you export your data locally on demand. Check your SLA. It’s a critically important document that outlines many aspects of your agreement with the vendor, including availability, security, performance and of course, data ownership. There is an excellent post on Wired.com that outlines some of the essential aspects of an SLA for your cloud services.