Software as a service is a software subscription and delivery model. Unlike software in daily use, it is a centrally hosted and licensed on a subscription basis instead of outright purchase. Hence it is often called as “on-demand software”. SaaS has become a highly preferred platform today for a wide range of business applications and is extensively used for messaging, payroll processing and other normal office software requirements.
In a nutshell, in SaaS, a third-party provider hosts the applications and then makes the software available to customers over the Internet. Along with infrastructure as a service (IaaS) and platform as a service (PaaS), SaaS forms one of the three main pillars of cloud computing, the latest and most advanced Internet-based technology.
Here are some of the benefits that SaaS has to offer to organizations regardless of their size or scale.
- Cost Effective – Since there is no need for businesses to install and run applications in their own data centers and systems, a lot can be saved on hardware acquisitions. These funds can be more profitably used on core activities for business growth and development. Costs for software licensing, provisioning and maintenance of hardware and installation and support are also drastically reduced. This is very crucial for small businesses and start-ups that can hardly afford to invest in areas that do not directly contribute to profitability but form a part of support services only.
- Flexible payment options – Customers can subscribe to SaaS instead of investing heavily in purchasing software and installing cutting-edge hardware to run them. Payment for SaaS services can be made monthly on a pay-as-you go model. Rather than a one-time investment, businesses can shift to a recurring expenses mode and thereby exercise a better and predictable budgeting practice. It is also possible to stop SaaS at any time and eliminate these recurring costs too.
- Scalable usage option – Cloud services, especially SaaS have a great deal of in-built scalability. Customers can access the exact services needed and scale up or down whenever required with fewer or more services and features on-demand. Since the quantum of a monthly subscription is linked to usage, small businesses can create cost-saving budgets for their organizations.
An example will illustrate this point better. Take the case of a digital marketing company such as One Stop Media offering various services including app development company in Australia. The agency can avail of SaaS services as per prevailing requirements of their clients and can thereby save substantially on purchase and installation of required cutting-edge software.
- Automatic updates – Purchasing software entails frequent updates to take advantage of the latest features and specifications. This cannot be done by non-technical employees. Hence, highly trained and experienced IT staff has to be hired for this purpose. It is not so with SaaS. The service provider automatically performs updates and patches it into the system. This reduces expenses considerably apart from allotting staff for installing updates.
- Easy accessibility – Unlike the usual software that is installed in specific computer systems and data centers, SaaS applications are delivered to user nodes over the Internet. Hence it is possible to access the SaaS from any location round the clock on all Internet-enabled device.
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These are some of the major advantages of opting for SaaS mainly centered on savings in time and costs. However, there are certain potential disadvantages too which mainly lie with the provider of services and not the software per se.
This is because the efficiency and all operational aspects of SaaS is centralized on the provider itself. Businesses have to rely totally on an external agency to provide the software and ensure that it is running well consistently and that billing is accurate. But the most important thing is to depend on outside vendors to ensure that all business data and applications generated on SaaS are maintained in a fully safe and secure environment.
Keeping all these in mind, it will be detrimental for business if the selected service provider makes unwanted changes in service offerings, experiences service disruptions and cannot guarantee data security.
Hence before signing on the dotted line, users must carefully scrutinize the service level agreement of the SaaS provider the one like One Stop Media who has an agreement and make sure that they stick to all the clauses scrupulously. Penalty clauses may be incorporated in the agreement to pre-empt any shortfall in service if necessary.