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Software-as-a-Service or SaaS – What is it all about? Posted On 2016-03-21 08:48:13

SaaS is Software which can be subscribed to as a service rather than a product. You do not own a version of the product, but you can access it as a service by paying a periodic subscription. For better understanding, it can be compared to TV channels. You do not own a channel but subscribe to one or a combination of channels that interest you. You pay the service provider to watch them and discontinue the subscription when you do not want to watch it anymore. Whatever information you have gained or the entertainment it offered is all yours! Software as a Service works in a similar way.

Moving from buying software to subscribing to it!

The conventional method for using the software in an organization is to purchase a licensed version, install it in the organization’s IT server or workstations if it is an enterprise version, and then start using it. The software is a product which is purchased and owned by the organization. The bigger the organization is, the bigger they have to invest in the right software for them. They call these software ERPs or Enterprise Resource Planning software, which has different modules that cater to each department or business process and provides the management with useful analytics. ERPs typically involved huge investments just like capital investments. They also required specialized resources including men, machine, and infrastructure. Once installed, maintenance and upgrades become a concern. Basically, only the large organizations could afford this life-saving software as far as the business is concerned. As the world started to get more things done via the Internet, the concept of a web-based ERP which could be used for the same organization from different locations materialized.
Moving one step further, cloud computing started catching up fast in the IT world and along with it came the concept of SaaS. Saas is one way of using the cloud computing technology. The software vendor showcases his product and offers it as a service which can be used over the Internet. For example, accounting software is offered as a service. Different organizations subscribe to it and use them simultaneously. A central server hosts the data and holds it securely for the various clients. The vendor maintains the server and the software for which he charges a subscription or user fee from each organization. The organization is saved from the huge capital investment it has to make for acquiring the software and there’s no need for specialized resources to maintain it anymore. All maintenance and upgrades are taken care of by the software service provider. This brought down the cost of automating businesses and the Small and Medium Businesses (SMBs) started using them to progress in their businesses. The biggest advantage that the SMBs are gaining from SaaS is that they are now able to get real-time data analytics which helps them taking crucial business decisions that save them precious time, resources and money. Once the cost is controlled, the profitability automatically increases.

Word of Caution

While SaaS has helped many SMBs to go digital, there are considerable issues also related to them. Data ownership, data security, customization, downtime, Internet connection etc. are some of the major issues organizations have to clarify before subscribing to software. Organizations can consult with an Industry expert as well as an IT expert to make sure they only gain from subscribing to the software and do not have to compromise on vital business data.