SaaS, or Software as a Service, is a cloud-based software delivery model in which applications are hosted by a third-party provider and accessible to customers via the internet. This enables businesses to use powerful software tools without requiring extensive hardware or infrastructure. SaaS applications include customer relationship management (CRM), project management, and collaboration tools, all of which can help organisations improve efficiency and innovation.
Let’s keep reading to learn more about SaaS, how it works, and common SaaS applications.
What is Software as a Service?
Software as a Service (SaaS) is a software distribution model in which a cloud provider hosts applications and makes them available to end-users over the internet.
In this model, an independent software vendor (ISV) may work with a third-party cloud provider to host the application, or the cloud provider may also be the software vendor. Software as a service is one of three major cloud computing categories, along with Infrastructure as a Service (IaaS) and Platform as a Service (PaaS).
SaaS applications are typically accessed through web browsers, with users paying a subscription fee to gain access to the software. The application and its associated data are stored on the provider’s servers, and the vendor handles maintenance, upgrades, support, and security. Software as a service is widely used for a variety of applications, including personal entertainment like Netflix and advanced IT tools.
Examples of popular SaaS products include Salesforce, Google Workspace apps, Microsoft 365, HubSpot, Trello, Netflix, Zoom, Zendesk, DocuSign, Slack, Adobe Creative Cloud, Shopify, and Mailchimp.
PaaS is another type of cloud computing model that is delivered as a service. What’s the difference between PaaS and SaaS?
Learn more in our previous post: “What is PaaS in Cloud Computing: Definitions and How it Works”.
How Does SaaS Work?
Software as a service works by allowing users to access software applications over the internet, eliminating the need for installation and maintenance on individual devices. This model provides flexibility, scalability, and cost-effectiveness for businesses and individuals alike.
In general, here’s how SaaS works:
- Cloud Delivery: Software as a service applications are delivered using the cloud delivery model. You only need your web browser to access them. There’s no need to host the app on your server or worry about allocating the necessary resources or conducting database management.
- Subscription-Based Access: In most cases, you have to purchase a subscription to a product or service. Then, you log in to your account via your preferred web browser to gain access to the applications or tools you wish to use.
- Provider Managed: You don’t have administrative control over the app — all of that is handled by the provider. The provider handles updates and system changes.
- No Local System Requirement: You also don’t need to download anything to your local system to manage and work in these business applications.
Advantages of SaaS
There are numerous advantages to software as a service, including cost-effectiveness, scalability, and the ability to access software from any device with an internet connection. Additionally, SaaS providers frequently provide customer support and regular updates to ensure peak performance.
Salesforce’s blog outlines a number of advantages, including
- Low Set Up and Infrastructure costs: You only pay for what you need, making it a very cost-effective solution for businesses of all sizes.
- Scalability: As your company grows, you can adjust your requirements to reflect the number of users, the volume of data, and the functionality required.
- Accessible from Anywhere: Simply connect to the internet and work from anywhere using a desktop, laptop, tablet, mobile, or other networked device.
- Automatic, frequent updates: Because of the scale and access to customer feedback, providers can provide timely improvements. This allows your IT department to focus on more important business tasks.
- Security at the highest level required by any customer: Because the service is shared, all users benefit from the security level configured for those in greatest need.
Common SaaS Applications
SaaS finds applications across various industries and business functions. Some common SaaS applications include customer relationship management (CRM) software, project management tools, and accounting software. These applications allow businesses to streamline processes, increase efficiency, and access data from anywhere with an internet connection.
Here are some examples of its applications.
- Customer Relationship Management (CRM): Platforms like Salesforce offer SaaS-based CRM solutions that help businesses manage customer relationships, sales pipelines, and marketing campaigns.
- Enterprise Resource Planning (ERP): Software as a service ERP systems like Oracle NetSuite streamline core business processes such as finance, inventory management, and supply chain operations.
- Human Resource Management (HRM): SaaS HRM solutions such as Workday provide tools for managing employee data, payroll, performance evaluations, and recruitment processes.
- Project Management: Platforms like Asana and Trello offer SaaS-based project management solutions that facilitate task assignment, collaboration, and progress tracking.
Future Trends in Software as a Service
The SaaS model has grown in popularity in recent years, as it continues to provide cutting-edge solutions in a variety of industries. As competition among SaaS products intensifies, so do customer expectations.
So, what will the future trends in SaaS be? Adamfard’s blog outlines several future SaaS trends.
- Mobile-first development: New products will be developed first for smartphone accessibility, as mobile devices are becoming increasingly popular for accessing software.
- Emergence of micro-niches: SaaS providers will cater to highly specialised software designed to address very specific industries and customer needs.
- Artificial intelligence (AI) and machine learning (ML): AI and ML will be integrated into SaaS solutions to improve operational efficiency, customer engagement, and security.
- Integrations: SaaS vendors will provide greater integration capabilities, allowing businesses to combine cloud-based and on-premise systems.
- Micro SaaS: The competition among SaaS products will lead to the creation of smaller, more flexible products aimed at serving narrower customer groups and niches.
- Everything goes mobile: Software as a service products will continue to adapt to the mobile-first era, with a focus on improving accessibility features, mobile personalisation, and low-code apps.
- Vertical SaaS: As vertical SaaS platforms are still scarce, companies can enter the market by offering specialised solutions tailored to specific industries.
These trends are expected to shape the future of SaaS by responding to changing business and customer needs, improving user experiences, and driving industry innovation.
Sometimes developers use IaaS to develop their software as a service. But, what exactly does IaaS mean? It is an as-a-service cloud computing model that delivers virtual computing resources over the internet.
Learn more in our article, “What Is IaaS in Cloud Computing? Infrastructure as a Service: Definition and Benefits”.
Conclusion
Software as a Service (SaaS) represents a fundamental shift in how businesses access and use software applications. SaaS solutions enable organisations to focus on innovation and growth by providing scalability, cost efficiency, and accessibility, while experienced providers handle the complexities of software management.
As we look ahead, the continued evolution of SaaS promises to drive more digital transformation across industries, creating new opportunities for businesses to thrive in an increasingly competitive market.
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