All you need to know About Software as a service (SaaS)

Software as a service is a software delivery and licensing model where the software is distributed through a cloud provider who in turn makes it accessible to users through the internet. An independent software vendor (ISV) can contract a cloud provider otherwise known as a SaaS company to host their application.

There are however bigger corporations than ISV’s such as Microsoft which is both a software vendor and a cloud provider. Cloud computing comes in three main categories software as a service (SaaS), platform as a service (PaaS) and infrastructure as a service (IaaS).

How does SaaS work?

Software as a service works via a cloud delivery model that lets data become accessible from any internet-connected device with a web browser. A software provider may host its application and allied data using its databases, servers, computing, and networking resources or an ISV could contract a cloud provider to host its application.

Consequently, organizations using SaaS applications are not burdened with setting up and maintaining the software. The user only needs to pay a subscription fee to gain the software’s access making it a readymade solution, unlike On-premise users who have to pay maintenance and support fees yearly.

The SaaS model provider gives the consumer network-based access to only one copy of the application made specifically for SaaS distribution. The source code of this application is similar for all customers therefore when new functionalities and features are released, all the customers receive them.

Consumer data from each model can be stored in the cloud, locally, or both subject to the service level agreement signed. Through the use of application programming interfaces (APIs), companies can now incorporate SaaS applications with other software. For example, an organization can write its software tools, then use a cloud provider’s APIs to incorporate those tools with the SaaS offering.

SaaS architecture

SaaS applications normally use the multi-tenant approach where one instance of the SaaS application runs on a host’s servers and from that instance serves each subscribing cloud tenant or customer. The application therefore will run on a single configuration and version across all consumers.

Via separate subscribing, customers run on a similar cloud instance with a common platform and infrastructure, segregating all consumers’ data. This distinctive multi-tenant structure of SaaS applications enables the cloud service provider to manage, update, maintain, and fix bugs easily and fast.

Instead of having to apply changes in several instances, the service provider applies and maintains them in one shared instance. This multi-tenancy model also allows a larger collection of resources to be available to a bigger group of people, without compromising essential cloud functions such as privacy, security, and speed.

Advantages of using SaaS

Less expensive: Software as a service eliminates the need for companies to install and run an application through their computers and data centers. It removes the expense of acquiring computer hardware, maintaining it, and licensing the software.

Scalable usage: Cloud services such as SaaS have high vertical scalability that provides consumers with the option to access fewer or more services or on-demand features.

Flexible payments: Instead of buying software for installation or extra hardware to support it, consumers just subscribe to a SaaS offering. Many organizations can realize more predictable and better budgets by shifting such costs to a recurring operating expense. A SaaS offering can also be terminated at any time to discontinue the recurring costs.

Automatic updates: Instead of buying new software, consumers can rely on a SaaS provider to make automatic updates as well as patch management. This further reduces the load on your IT staff.

Customization: SaaS applications are very customizable and can be incorporated with other business applications particularly those from a similar software provider.

Challenges of SaaS

Dependence on external vendors: Despite having numerous advantages, SaaS also is own weaknesses as organizations have to depend on external vendors to provide as well as keep the software up and running, track and provide accurate billing, and a secure set-up for the data.

Problems beyond customer control: Problems arise when the cloud service providers go through service interruptions, experience a security breach, or compel unwanted changes to service offerings. All that can have a huge effect on consumers’ ability to access the SaaS offering.

No control over versioning: When a SaaS provider introduces a new version of an application, all customers get it regardless of whether or not the new customer wants the new version. It will require the company to provide more resources and time for training.

Difficulty switching vendors: Switching cloud service providers can be a challenge as the customer has to transfer large quantities of data. Some SaaS providers use data types and proprietary technologies which complicate this transfer of data from one cloud to another, a situation referred to as Vendor lock-in.

Security: Cloud protection is regarded as a significant problem for SaaS applications. Among the reservations quoted about SaaS products include key management and encryption of data, incidence response, data privacy, identity and access management, among others.

Summary

The software as a service market is a combination of software vendors and products. It offers diverse products that vary from IT business analytical tools to Video streaming tools. Fundamental SaaS applications for businesses include email, customer relationship management (CRM), sales management, human resource management, collaboration, and billing.

Other enterprise SaaS products for particular industries such as medical or insurance are known as vertical SaaS products. SaaS products are largely marketed to B2C, B2B markets, or both. Some of the popular SaaS products in the market include Microsoft 365, Salesforce, Trello, Hubspot, Zoom, Netflix, Mailchimp, Shopify, etc