Software as a Service (SaaS)
Software as a Service (SaaS, typically pronounced 'sass') is a model of software deployment where an application is hosted as a service provided to customers across the Internet. By eliminating the need to install and run the application on the customer's own computer, SaaS alleviates the customer's burden of software maintenance, ongoing operation, and support. Conversely, customers relinquish control over software versions or changing requirements; moreover, costs to use the service become a continuous expense, rather than a single expense at time of purchase. Using SaaS also can conceivably reduce that up-front expense of software purchases, through less costly, on-demand pricing.
The SaaS software vendor may host the application on its own web server, or this function may be handled by a third-party application service provider (ASP). This way, end-users may reduce their investment on server hardware too.
Save money
Lower IT costs
Economies of scale
Pay as you go
Save time
Gain immediate access to the latest innovations
Save money
Several factors contribute to making it considerably less expensive to implement a SaaS application than a traditional on-premises application. These factors include:
Lower IT costs
When you subscribe to a SaaS application, you avoid the overhead associated with implementing conventional software. A typical software implementation involves purchasing and maintaining servers, housing them securely, and installing and maintaining the software. This requires the time and effort of experienced IT personnel and deflects the efforts of employees at a number of levels away from the core mission of your organization.
Economies of scale
Subscription costs for SaaS applications reflect the economies of scale achieved by "multitenancy." Multi-tenancy means that many customers run their applications on the same unit of software. This makes the overall system scalable at a far lower cost.
Pay as you go
When you subscribe to a SaaS application, you pay a monthly or annual subscription fee. Compared to a traditional software license, this subscription payment structure works to your advantage.
An on-going monthly expense is easier to incorporate into your budget than a large one-time outlay. You can cancel or change your subscription at any time without losing a large initial investment.
Save time
Because you eliminate many of the typical implementation tasks associated with licensed software and because the software is already up and running on the SaaS vendor's data center, deployment time tends to be much shorter with a SaaS application than a traditional one.
Focus technology budgets on competitive advantage rather than infrastructure
When you subscribe to a web-hosted application, you free your organization from supporting high-cost, time-consuming IT functions, including:
- Purchasing and supporting the server infrastructure necessary to install and maintain the software in-house.
- Providing the equipment redundancy and housing necessary to ensure security, reliability, and scalability.
- Maintaining a labor-intensive patch and upgrade process. The more time your employees spend maintaining equipment, downloading and installing patches, and supporting software upgrades, the less time they are spending on your core business activities.
Gain immediate access to the latest innovations
With traditional licensed software, you typically have to wait for the next release to benefit from the latest innovations or to move your organization to a new browser or operating system. Given the cost and complexity of moving to a new version, it may not even be practical to upgrade each time a new release becomes available.
With a SaaS subscription, on the other hand, you benefit from innovations on an on-going basis. As soon as a new or improved feature appears in the application, you can begin using it.
