What is software as a service (SaaS)?

This article defines Software-as-a-Service and distinguishes it from Infrastructure-as-a-Service and Platform-as-a-Service. It also presents well-known examples and explains how they work. Finally, the advantages and disadvantages of software-as-a-service applications are discussed.

Table of contents

What exactly is Software-as-a-Service?

Under software as a Service, or SaaS for short, is a cloud-based service in which which instead of downloading application programs, which are stored on the user's own PC or the company network or corporate network, an application is accessed via an Internet browser. SaaS is one of the three main categories of cloud computingalongside Infrastructure-as-a-Service (IaaS) and Platform-as-a-Service (PaaS).

What are the most popular SaaS?

A number of IT professionals, business and private users use SaaS applications. Products range from personal entertainment, such as Netflix, to advanced IT tools(SAP Analytics Cloud). Unlike IaaS and PaaS, SaaS products are often marketed to both B2B and B2C users.

SAP's SAC & DWC are well-known examples of software-as-a-service applications.

How does Software-as-a-Service work?

SaaS works through a cloud delivery model. A software provider either hosts the application and associated data using its own servers, databases, network and processor resources, or it is an independent software provider whose application is hosted by a cloud provider in the provider's data centre.

The application is made accessible to any device with a network connection and applications are typically accessed via web browsers. This means that companies using SaaS applications are not concerned with setting up and maintaining the software. Users simply pay a subscription fee to access the software, which is a ready-made solution.

4. advantages of SaaS

Software-as-a-service applications offer many benefits to many businesses, provided they are used correctly. They can save money, time and resources - three essential components that are invaluable to any business.

• Accessibility: As subscribers are enabled to use the software online, work can be done anytime and anywhere. This is especially useful for users who often work in remote locations or have long commutes.
• Storage capacity: Due to the fact that the software is hosted externally (in the cloud), companies save on local storage space as the applications do not necessarily have to be downloaded to all devices.
• Updates: It is no longer necessary to spend time and money updating the software. As part of a subscription, the application always remains up to date and offers the latest functions, improvements and bug fixes.
• Customisability: Applications are often customisable and can be integrated with other business applications, especially via applications from a common software provider.
• Flexible payments: Instead of buying software that needs to be installed or additional hardware that supports the software, customers subscribe to a SaaS offering. Changing the cost to a recurring operating expense allows many companies to budget better and more predictably. In addition, users can cancel SaaS offerings at any time to stop these recurring costs.

5. challenges and risks

A big plus of SaaS companies is that they can take care of infrastructure and maintenance so their customers don't have to. This means that a third party will be responsible for the basic business functions. That brings with it a certain amount of risk.

Downtime: The ability to use a SaaS application and access the data depends on the reliability of a third-party provider. So the downtime of SaaS companies could also be the downtime of the users. This can lead to costs for the company using SaaS in its daily operations.

Creditworthiness: A crucial aspect of a SaaS client's business depends on the company staying in business. If the provider goes bankrupt, access to the service and the corresponding data could be cut off.