Software as a Service ( SaaS ) is a new concept in software industry. It is a brilliant new way to distribute software to the customers. Rather than actually buying out a software for a given license period, SaaS companies rent out software to customers. The files of the software are centrally located in the data centers of the company. The product is hosted on the cloud . Customers just have to purchase the software for a given period and they can access the software directly using a web browser. This is the basic idea behind Software as a Service ( SaaS ) , that is software products are rented out as a service rather than sold as individual CDs/DVDs . This business model has made it cheaper to afford software and has widened the reach of software products to firms. If you are the owner of a software making company, it is worthwhile to offer your software as SaaS.
Software as a Service ( SaaS ) Definition :It is a way of making software available to the customers ( software distribution model ) in which the data is hosted on the data centers of the company and rented out to customers as a service. They can create their personal accounts for a product , and then access it online using a web browser. Their personal data is kept securely within their personal accounts with the help of security software on the cloud.
Examples of Some Prominent Software Companies providing Software as a Service ( SaaS ) :
The most popular software companies now sell software as SaaS. These are some of them.
- Microsoft Office 365 is now a SaaS product. Microsoft also provides applications and software through the data market of Windows Azure, which is SaaS.
- Oracle now offers software as SaaS.
- Amazon Web Services is a huge collection of SaaS software and apps.
- ZOHO is a vendor of useful business software which are now available as SaaS.
All of these companies have reported immense growth in revenue and larger consumer base for their software. Apart from these big SaaS providers, most other software companies are quickly taking steps to become SaaS vendors.
What are the most commonly rented SaaS software ? From the data available, it is seen that software such as Customer Relationship Management ( CRM ) , Human Resource Management ( HRM ) , Invoicing, Web Application development software, Accounting software and Project Management are some of the most sold software sectors. This shows that companies that need such software are actually benefiting a lot from the SaaS model and so are the SaaS vendors. It is a win-win situation for both the parties.
Software as a Service SaaS Pros : The advantages of switching over from desktop software to SaaS software are really wonderful for a company or small business. These pros are driving the SaaS model further up. These are the benefits your company can avail by using SaaS products.
- Reduced Management Costs for IT team : If you use SaaS software, the entire job of maintaining and updating the software is done at the data centers. You may not need a separate IT team to manage your computers and software you use. This means lower average variable costs for the firm and increase in net profit from revenue.
- Scalability : This means that you can upgrade your software as and when you need. Each software has data limitations. Using SaaS, your company can overcome the problem of scalability which is easy in SaaS.
- New release of software versions can be installed much faster as they are put up on the cloud. It helps your firm to stay with bug free and advanced software. This can safeguard data from errors.
- Improved Software : In SaaS, software companies can analyze user data, such as heatmaps and how people use that software. Using this data, they quickly improve important things like bugs and user interface. This leads to emerging new software with better and easier functionality , still preserving the complex functions.
- SaaS software can also offer peer to peer file and data sharing among users of the same software. This feature is a great addition in CRM software and project management software where collaboration leads to better work.
Besides these pros of SaaS, there are the common benefits of secure data handling and online backups.
Is there any disadvantage ( cons ) in the software as a service ( SaaS ) model ? Yes, there are a few drawbacks but only for a limited section of customers. For example, SaaS offers software through the web, therefore there is latency time involved. In applications where time in milliseconds is important, SaaS falls behind desktop based software. One such activity may be complex computations like in engineering. Secondly, SaaS requires that software users rely on the software provider for data handling. However, SaaS software providers use state of the art security and protection software to keep data safe and private. Hence, the pros far outweigh the cons .
In SaaS delivery model, the client needs to sign an agreement when renting the software. It is a statement that the user abides by the terms and conditions of use of the software.
SaaS software revenue has crossed $ 10 billion . It is a model which is fast being accepted. It opens up new opportunities for software makers and engineers as well . This is an industry solution with a better pricing model .