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Software as a Service/SaaS

What is the definition of SaaS?

Software as a Service—SaaS—is an on-demand subscription model for the licensing of software that is hosted remotely by a vendor and made available to the customer via the cloud. SaaS applications of nearly every type of business and consumer software are now available, including customer resource management, enterprise resource planning, human resources management, sales and marketing, communications, gaming, accounting and tax preparation, education, office systems, cybersecurity and many more. Most software developers have SaaS versions of their products.

Why are the benefits of having a SaaS platform?

Organizations considering traditional software products, or a comparable SaaS option typically realize a number of benefits with the SaaS offering, including:

  • Ease-of-Adoption: Because the software is hosted by the vendor, the hardware requirements for subscribers are minimal, often only a mobile or desktop device using a common web browser.
  • Cost Efficiency: SaaS offerings allow subscribers to buy what they need and add user licenses as needed rather than over-purchase for user capacity that may or may not transpire.
  • Simple Management: When a SaaS vendor adds features, enhancements, or otherwise modifies their product, the updates are pushed by the vendor automatically rather than requiring action on the part of the subscriber.
  • Lower Total Cost of Ownership: SaaS applications are typically priced with all product and associated support costs revealed up-front, making it easier for customers to budget and buy what they need.
  • Fast Time-to-Value: Because deployment of a SaaS application does not require complicated integration or burdensome hardware requirements, the time from purchase to provisioning can take place in a matter of minutes.
  • Ease-of-Integration: Some SaaS applications may have customization options requiring integration with internal resources or products from other SaaS vendors. These can usually be accomplished simply with application programming interfaces (APIs).
  • Remote Access: Often any authorized user with an internet connection and a device operating a common browser can access their SaaS account.

What are some SaaS solution best practices?

When evaluating SaaS products and applications there are a number of considerations to take into account, such as:

  • Compare your actual needs with the pricing of available on-premises and SaaS to make sure you aren’t paying extra for benefits you do not need.
  • Compare all available features for on-premises and SaaS versions of the products you are considering to make sure you aren’t paying extra for features or customizations you may never use.
  • Examine your service level agreement (SLA) to understand what the responsibilities of your vendor are, what your responsibilities are, and whether any of the terms are negotiable.
  • Make sure the on-premises and SaaS versions of the products you are considering from a vendor are the same. Sometimes the SaaS version of a product will have different features or capabilities than the on-premises version, and vice versa.
  • Depending on your industry, location, or where your customers are located, there may be certain regulatory requirements you need to follow. Make sure the products you are considering are able to support those requirements.
  • If your needs require the use of intellectual property or sensitive data like financial or health records with security requirements, make sure you understand where your data will be stored and where it may move as it is shared in the cloud.
  • Determine the financial stability of the vendors you are considering and understand what happens to your services and data if the company goes bankrupt or suddenly shuts down.
  • Learn what your vendor’s business continuity and data backup plans are in the event of a disaster, or what their resiliency is in the event of a cyberattack.
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