What is Software as a Service (SaaS)?
Software as a service (SaaS) refers to the access of software on a rental/lease basis. Other names for the service include on-demand applications, web-based software, or hosted software. With SaaS, the customers pay for the services that the software provides without the need either to buy the software outright or go through all the headaches that come with support and managing of upgrades and security. SaaS is the latest approach that most software companies are using to distribute their software because of the many advantages associated with it. Among the most commonly implemented SaaS modules are the Customer Relations Management (CRM) solutions, deployed as SaaS in 24% of the CRM market. CRM solutions can manage the interactions of many clients, suppliers and business contacts and also sync such data on an organization’s shared platform.
The Software as a service module also works excellently with Enterprise Resource Planning Software (ERP). In fact the popularity of SaaS in Enterprise resource planning continues to grow now that concerns about security, service availability and response time are well addressed in this model. With Software as a service, users don’t install software on their servers, and in many deployments, also don’t need a server instance. The user accesses the software on a host on the internet and can download their information or data when needed.
The Advantages of using Software as a service approach are many and include:
1. It is a Cost Effective Approach
The user does not need to spend on the purchase of software or dedicated hardware, and neither do they need to hire system administrators. They pay the Software provider on a periodic basis and receive excellent services that are always up and accessible via the internet.This lowers operational costs for any type of business-large or small.
2. Professional Services are provided
The software provider maintains the software and hardware to ensure 99% up-time. The software providers also offer free training online including providing the required materials so that the user can use the software easily. In case of problems, the software provider also offers maintenance of their own software as part of the package.
3. Scalability and access to new features
Users of Software as a Service can pay only for what they need, when they need it. This allows users to pay for modules that their business requires or to test various new services and assess impact without buying. As a company grows, it can take up more functionality at the touch of a button.
The main disadvantage of Software as a service is the lack of understanding of how it works and the inherent fear that many users have over safety concerns and integrity of data. As a result, many users are still unwilling to adopt the model. However, once the user understands that their data is safe and its integrity is guaranteed, SAAS remains the best approach to procuring software.
Software vendors are meeting this challenge by training users, offering dedicated servers to clients and also signing service level agreements as a guarantee to users.