Software as a Service (SaaS) is a model for software licencing which enables companies to licence software on a subscription basis. Gartner defines SaaS as “software that is owned, delivered and managed remotely by one or more providers.” The provider delivers the software based on one set of common code and data definitions and it is consumed in a one-to-many model by all contracted customers at any time.
SaaS has become a common delivery model for many business applications including office and messaging software, payroll processing software, mobile management software, accounting, collaboration, customer relationship management (CRM), etc.
SaaS has the benefit of reducing IT support costs in large enterprise companies by outsourcing hardware and software maintenance and support to the SaaS provider.
Features of SaaS Applications
SaaS applications are generally fairly customisable according to customer needs, where each customer can alter the configuration options in order to optimise functionality or look-and-feel of the application.
Because SaaS applications are centrally hosted by the provider, they will often have a more accelerated feature delivery, and will be updated more frequently than traditional software.
As SaaS applications cannot generally access a company’s internal systems they will often offer open integration protocols and application programming interfaces (APIs) that operate over a wide-area network.
SaaS applications often have social and collaborative functionality that allows users to share information and jointly work on projects. These features could include the ability to comment on tasks or plans, share documents, or vote on new feature ideas.
Adoption Drivers for SaaS
There is a growing acceptance of SaaS solutions in the enterprise business market. With the growing use of web-based user interfaces there is a decreased need for client-server applications. This has opened the door for new software vendors who can offer a more up-to-date user experience.
The increasing popularity of web development has also reduced the cost of developing new SaaS solutions which has enabled providers to come up with new products and challenge traditional vendors.
The increasing availability of broadband level internet access has also enabled remote, centrally-hosted applications to offer speeds comparable to on-premises software.
Benefits of SaaS
SaaS applications can reduce IT costs as a result of the vendor maintaining the system. This also allows the IT department to focus on other more critical pursuits as they no longer need to update and maintain software.
SaaS allows for scalability so that the application or service can grow to match the business’ needs over time and gives the company immediate access to the latest version of programs with automatic updates.
SaaS is also generally more reliable as the provider ensures that solutions are never down and are always available to users.