Software as a Service, sometimes abbreviated to SaaS, is a method of distribution whereby a company or individual accesses software via an Internet connection from an external supplier. SaaS is easiest understood in contrast with the traditional software distribution model, in which applications are stored on a local hard drive or server after being purchased either in a physical format such as CD-ROM or via a download.

Instead, Software as a Service utilises an external vendor who will supply the customer with the software package as and when they need it over a network connection. SaaS is often described as renting software rather than owning it due to its pricing structure. In the past, businesses would pay a one-off fee to own a piece of software and would be free to use it for as long as they wished, or more likely, as long as it remained suitable for their business and customers.

However, Software as a Service works on the premise of organisations paying a subscription fee to an external supplier, with fees being paid on a monthly or yearly rolling contract. This, of course, drastically alters the relationship between developer and customer when compared to the traditional approach to software. Previously, once an organisation or individual had purchased a piece of software, that was, in effect, the end of the partnership with the developer, unless a support fee had been paid. With SaaS it is just the beginning.

Renting software on a subscription basis means that the developer or supplier of the software will continue to host, maintain and update it. As a result, SaaS is also a way of businesses also gaining access to developer expertise as the administration and servicing of the software will all be handled externally.

Software as a Service is also part of a broader technology movement known as cloud computing. Like SaaS, the cloud facilitates the movement of resources away from local storage towards a more fluid distribution model involving a network connection. Alongside SaaS, businesses may also chooses to utilise Infrastructure as a Service (IaaS), Platform as a Service (PaaS) and several others, all of which are provided by the cloud.

An example of SaaS which you may be familiar with is Microsoft Office Online. In this instance, customers do not own Microsoft Word, Excel or PowerPoint as they would if they had purchased them outright, but instead are able to access lightweight versions of the software over the Internet.

Software as a Service offers a number of advantages over on-premise software, most notably the option to access tools wherever and whenever you need them. Providing an Internet connection is present, employees can access the resources they need at all times, enabling greater mobility than with traditional distribution models.

It also enables easier collaboration because with a third-party handling updates, it is much easier to ensure that all users have the same version of the software being used. Companies may also find that SaaS is much more cost effective as it foregoes expensive one-off initial costs and adding more users is simple and shouldn’t disrupt existing tasks.

That being said, there are criticisms of SaaS surrounding the lack of control it offers users when compared with the traditional model and concerns over data security when information is being transferred over an Internet connection rather than a local network.

Depending on the size of your business and the tools it requires, SaaS can offer a number of benefits and has already made a sizeable impact upon many enterprise firms.

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