In the early days of PCs, software came on a floppy disc, which then became either a CD or a USB stick, depending on the size of the programme. Now much of it is available to download and increasingly software vendors are dispensing with the need to install it on a local device at all and are simply offering the functionality of the software via a network-based service.
This is known as cloud computing with this specific aspect of it being termed Software-as-a-Service. In some ways it’s a very modern development, in tune with the rise and rise of mobile devices, in other ways however, it is really nothing new.
It’s worth remembering that a product is essentially a tangible item which is passed from one party to another in the course of a sales transaction, while a service is an activity performed by one party for another in return for payment. In terms of software, however, most vendors never actually sold the product in itself, at least not to end users, they sold a licence to use the product, either indefinitely or for a specific length of time.
Users never really owned a piece of software in the way that they owned a computer. In other words, arguably software has always been sold as a service, it’s just that the way in which that service is delivered has been changed from implementation on the end-user’s client to implementation on a network server accessed by the end-user’s client.
What are the advantages of SaaS?
Many businesses have very little interest in owning the tools they need to function, they simply need the security of knowing that these tools will always be available when they need them. They also need the security of knowing that they will have cash available when they need it. While businesses tend to be familiar with cycles with their peaks and troughs, what most businesses like is steady cash-flow. From a business perspective the up-front purchase model requires a large initial injection of cash, which has to be diverted from other purposes, whereas the SaaS model tends to be subscription based and to work on a monthly cost, which is often easier for businesses to manage and overall can work out just as economical.
The other important point about SaaS is that there is a solid reason for its nickname of “on-demand software”. Users can often be added and removed as required and companies can even take breaks from using the software if they so wish. In the upfront licensing model, IT departments typically have to decide in advance how many licences they require. If they buy too few, they may have to buy more later at a higher price, whereas if they buy too many, the money is simply wasted. This is particularly challenging for smaller companies, which are often heavily dependant on contractors who come and go over short periods of time.
The third key advantage of SaaS is that it vastly reduces hardware requirements. A quick glance at any software packaging shows a list of hardware requirements for the software to run. These are largely eliminated in SaaS. The key point is the quality of the broadband connection. There are still some minimal hardware requirements in order for the front-end to run smoothly, but overall there is usually no great advantage to using a fully-specced PC over a cheaper netbook or tablet.
Finally, from a support perspective, SaaS is simply easier to manage. Although traditionally software has normally been sold on a perpetual-use licence, the reality is usually that upgrades are usually required at some point, which is how the software companies make an income. These upgrade cycles have to be managed, along with all the relevant security updates and the licensing documentation, needed to confirm the legality of the usage (the loss of which can have serious consequences). In SaaS, the vendor takes care of all maintenance, including updates and upgrades are applied automatically. As an added advantage, the fact that the software is essentially run from the vendor’s servers and accessed through a client, rather than installed on a PC, means that client devices can largely be used interchangeably. In other words, if a device becomes faulty, users can simply be issued with a new one and left to pick up where they left off, rather than software and settings having to be installed on a new machine.
What sort of applications are available via SaaS?
For practical purposes, everything an SME could possibly want is available via SaaS and the options are growing all the time. It’s worth remembering that although there has been a huge growth of corporate SaaS options over recent years, Saas has been a strong force in the consumer market for over a decade. All web-based e-mail providers are essentially SaaS options, as are many consumer favourites such as Flickr and Skype.
For the corporate market, options worth looking at include: Google Mail, Google Apps for Business and Google Drive, Skype, Quickbooks (the SaaS version), Evernote, Basecamp (a project-management application) and Toggl (a time-tracking application). There are also numerous CMS and CRM options available and a company can even choose to host the entire end-user desktop in the cloud.
Are there any disadvantages of SaaS?
At the moment, it’s probably fair to say that some software vendors are currently still hesitant about moving to the SaaS model and therefore users who need certain kinds of best-in-breed software will have to stay with the traditional model for the time being. For example, while there are SaaS alternatives to Microsoft Visio and Microsoft Project, these are not yet comparable with their Microsoft counterparts, neither of which are currently offered as part of Microsoft’s SaaS offering.
Likewise, Adobe is currently steering clear of the SaaS model (its Creative Cloud is still installed on local computers, it just operates on a subscription model). Nevertheless, the advantages of the SaaS model are such that even the major software houses can no longer afford to ignore it (as Microsoft’s Office 365 shows) and so it is likely that this will be rectified in the near future.
The other perceived disadvantage to SaaS is security, but this is something that is commonly seen as a threat by the user, rather than the IT department. Due to the nature of the way that applications are hosted, SaaS is generally a lot safer than using a dedicated network in the office. It can be patched without any fuss to the user and it can be backed up effectively.