What is software as a service (SaaS)?

Software as a Service (SaaS) is best visualised as sitting at the top of a three-tier Cloud computing pyramid that also comprises PaaS (Platform as a Service) in the middle and IaaS (Infrastructure as a Service), at the bottom. The amount of customer control over the virtualised IT resources increases as you descend the pyramid.

SaaS is a software distribution model in which applications are hosted by a vendor or third party service provider and made available to customers over a network, typically the Internet. SaaS is often referred to as software on demand, and the simplest interpretation is that this is software you rent, rather than buy. Popular payment models include subscriptions, annual and perpetual licences, rentals or payments after use.

cloud computing pyramid-iaas, paas, saas


The Evolution of Saas

SaaS has grown significantly within the last few years due to both consumers’ and businesses’ accelerating demand for quick, affordable access to online applications that previously they were either financially or physically disbarred from. That dynamism is only set to continue with users becoming ever more mobile and vendors pushing on towards more cloud-native applications; and so relegating ‘cloudified’ client/service architectures and promoting instead new levels of enterprise automation with its ability to support more agile, connected business activities.

Why Should Organisations Consider Saas?

With its ability to offer affordable, scalable and instant access to a huge range of enterprise software, SaaS can:

  • Allow organisations to invest in enabling applications without upfront capital
  • Underpin rapid implementation through cloud deployment model
  • Significantly reduce time to benefit through fast provisioning
  • Plan and forecast with greater certainty due to predictable pay as you go model
  • Remove the need for internal resourcing, support and management of on-premise software
  • Encourage more positive adoption and greater returns thanks to frequently lower learning curves associated with browser access
  • Facilitate customisation, integration and connectivity between systems through freely available APIs
  • Create a more mobile and productive workforce thanks to SaaS’s ‘work anywhere’ characteristics
  • Level the playing field for smaller organisations who can now take advantage of enterprise applications
  • Drive down Total Cost of Ownership (TCO)

The Benefits of Saas

Feature Benefit
Availability, affordability, accessibility Ensures software options can be kept more easily aligned with operational needs
No CAPEX required Pay as you go model removes barriers to implementation and underpins agility and responsiveness
Scalable commodity Flexes in perfect alignment with user demand
Predictable OPEX Cost certainty aids cashflow, budgeting and planning
Perennial refresh Users always have access to the very latest version
Rapid provisioning Improved time to benefit even with complex systems
Derisked development Easier trialling and proof of concept
Outsourced responsibility Security, upgrades and support divested to vendor

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