What is SaaS: definition, principle, pros and cons


Software as a service (SaaS) is a model for the distribution of software where customers access the software through the internet. In SaaS, the service provider hosts the application on its server or cloud, and the customer accesses it via a web browser. SaaS is also known as on-demand software, web-based software, or hosted software. 

It differs from traditional installed software in that it can be accessed from any computer with an internet connection, updates are automatically done by the provider, and no hardware needs to be installed. Usually, SaaS is available on a subscription basis. 

How does SaaS work?

SaaS applications are not installed onto a single computer, they are accessed through the internet. A very well-known example of this is Gmail and other Google apps, which can be used from any computer, and the server is hosted by Google. Any and all updates and maintenance are done by Google, and as a user, all you have to do is simply have an internet connection, log in, and use the application.

Though Gmail and Google apps are free and permanent, many SaaS are subscription-based, usually with monthly or yearly plans. Given they are internet-based, stored on a separate server, not required to be installed or updated, and more user-friendly, they are becoming increasingly popular with companies over traditional software.

Why use SaaS?

There are several reasons for the popularity of SaaS: 

  • Subscription-based
    Instead of purchasing a license for software installation, SaaS are paid for per account and desired services, on a monthly or yearly basis. Buying long-term subscriptions is often encouraged by discounts. This makes the cost predictable and more easily budgeted.

  • Mobility
    As opposed to traditional software, SaaS can be used from any computer or mobile device with an internet connection, which means the user is not tied down to the single computer that has the software installed on it. This is a very attractive quality of SaaS, especially given how on the move the world is today and that working from home is becoming increasingly common.

  • Quick set-up
    For most SaaS, the process of starting is just registering an account and then proceeding directly to using the service. This makes adding new employees or users to the program a cinch.

  • Automatic updates
    Since the provider stays in charge of the software, the user doesn’t have to deal with updating the program, downloading the latest version, or maintenance. All the functions will be up-to-date and ready for the user when they sign-in.

  • User-oriented
    Software licenses for an entire company can be very expensive, whereas most SaaS offer per-user payment options. This way the company only has to pay for people who actually use the program.

  • Equal opportunity
    SaaS platforms are accessible to companies large and small, to individuals and groups, and everyone in between. This means a start-up has access to the same tools as a large, well-established business.

  • Cloud storage
    Saving data to the cloud leads to less data loss, as the SaaS platform provides the same security level to all company accounts, big or small.

  • Free offers
    Many SaaS will provide a limited but free version of their product, which both gives the chance to evaluate it before purchase and to use only the basic functions for free if that’s all that’s needed.

Despite all the advantages, there are a couple of things that might be considered as the weak spots of SaaS:

  • Sharing data
    Giving access to your data to a third party is inherently a risk. Your security is only as good as their security. However, there are numerous international laws that protect the extent to which your data is used and shared, and determine the data storage conditions to assure the highest level of security.
  • Dependance on the internet connection
    One of the great things about SaaS is all you need is an internet connection. One of the problems with SaaS is sometimes you don’t have an internet connection and you still need to do work, but can’t. That said, if the SaaS you’re using has a scheduling option or offers a constantly running service, you won’t even need an internet connection or a running device for the work to be done.

  • Downtime
    Sometimes the service will not be available as the provider is updating the program or doing other maintenance work. These updates usually take only a couple of hours.

  • Service termination
    There’s always a chance a company will just stop their service for whatever reason. This could result in loss of data. Usually, though, there will be a warning and a chance to download all data and documents.

  • Browser compatibility
    This one is simple, not all programs will run on all browsers. While most SaaS apps are compatible with any browser, some may have problems with older browser versions.

The advantages of SaaS greatly outweigh the disadvantages.

The SaaS revolution has already begun

The 2017 Gartner report predicted that sales of SaaS solutions will continue to grow at nearly 20% per year, from $39bln in 2016 to $76bln by 2020. The future is bright for SaaS. As long as SaaS performance is constant and consistent, it will continue to change the way we use apps. SaaS are fluid and flexible, and can quickly keep up with changing technology in a way installed programs just can’t. And while many people are still wary of cloud security, more and more SaaS are providing cloud access security management which gives full control to the user. 

SaaS and you

You use SaaS everyday. We’ve already mentioned Gmail and Google apps, but there’s also Netflix, Uber, Adobe Creative Cloud, and DropBox. You probably already have accounts with some or all of those. My personal favorite is Habitica, a habit-forming (literally) RPG. We use SaaS all day, every day, and we will even more in the future, in both our personal and professional lives. If your company isn’t using any, I’m not really sure how, as they are ubiquitous and increasingly necessary.

Wrapping it up

It really looks like SaaS is the future of software. While not all programs will switch to SaaS, or are even suited for the format, a lot of them will because of the cost, convenience, mobility, and ease of use it provides. As of 2017, 56% of companies were already using at least one SaaS provider, and that number will only grow.

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