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Software as a Service (SaaS)

What is Software as a Service?

Software as a Service (SaaS, as it is commonly known) is a method of delivering software without the need for users to run it locally (either on their local machine or on a company network server) so that it is delivered entirely as a service. This is charged on a subscription pricing model; often with a ‘freemium’ strategy.

Who is SaaS for?

SaaS has been adopted by individuals, major corporations and everyone in between. It includes services such as Salesforce, Hubspot, Netsuite and even mail services such as Yahoo and Google. When Salesforce launched in 1999 the idea of using a CRM system as a service, rather than purchasing an expensive software application (all paid upfront before any benefit has been seen), was pretty ground-breaking. The model gained traction quickly, particularly with smaller businesses, and was further bolstered by our changing device preferences and increasing use of tablets and smartphones.

What are the advantages of SaaS?

SaaS offers the advantages commonly associated with cloud computing: increased flexibility, greater/ faster scalability, reduced investment risk, little or no upfront-costs and predictable ongoing costs. It also argued that it makes maintenance easier since the user won’t have to outlay further capital expenditure for upgrades or additional licences or administer the upgrade on the local computer(s) or network server.

Are there any risks involved in SaaS?

SaaS is delivered over the internet or, in some ‘private cloud’ cases, over your wide area network (WAN). In either case, you need to ensure that the connection to the service is sufficiently stable, reliable and has sufficient bandwidth to support all business users.

In addition, it is worth remembering that SaaS data resides at the providers’ data-centre facilities. It is important to understand where sensitive data and data subject to regulatory compliance and data management laws or policies will reside – you will need to check where your provider’s computing facilities, file storage and backup facilities are located. You may wish to consider a SaaS data escrow arrangement.

What do I need to do before implementing Software as a Service?

It might be worth running a trial to ensure the usability of the SaaS being delivered is adequate.

If internet access isn’t reliable or is constrained in the amount of bandwidth you have access to then SaaS might not be the right solution for you. However, in many cases, switching to SaaS provisioning might justify an upgrade to your network connections.

In terms of Data Management, it’s the same as outsourcing any service – you need to do your due diligence on the supplier to ensure they comply with your business policies.

What’s next?

Check out our Cloud Builder page for additional tips about what to consider before moving software or services to the cloud. Learn about other cloud computing services: Infrastructure as a Service (IaaS) and Platform as a Service (PaaS).