Software as a service (SaaS), sometimes referred to as "on-demand software", is a way to deliver software and associated data with users accessing via a web browser.
Over the last few years, the software industry has been shifting from a model where companies purchase, install, and maintain software on their own networks, to a web-hosted solution to which companies subscribe to on a monthly or annual basis.
SaaS has become a common delivery model for many business applications, including accounting, collaboration, customer relationship management (CRM), management information systems (MIS), enterprise resource planning (ERP), invoicing, human resource management (HRM), content management systems (CMS) and service desk management. SaaS has been incorporated into the strategy of all leading enterprise software companies.
One of the major benefits is the potential to reduce IT support costs by outsourcing hardware and software maintenance and support to the SaaS provider such as InteractiveWest. Meanwhile, broadband service has become increasingly available to support user access from more areas around the world.
Notable SaaS applications include Salesforce, Google Apps, Amazon Web Services, Microsoft Office 365, Constant Contact, iContact, Intuit Quickbooks Online, NetSuite, Timefox, GoToMeeting, PhotoShelter, WordPress.com, WebPosition and many, many more.
Unlike traditional software which is conventionally sold as a one-time license with an upfront cost (and an optional ongoing support fee), SaaS application providers generally price applications using a subscription fee, most commonly a monthly fee or an annual fee. Consequently, the initial setup cost for SaaS web based software is typically lower than the equivalent conventional software. SaaS application providers also price their applications based on some usage parameters, such as the number of users using the application.
The relatively low cost for user provisioning (i.e., setting up a new customer) in a multi-tenant environment enables some SaaS application providers to offer applications for free. In this model, a free service is made available with limited functionality or scope, and fees are charged for enhanced functionality or larger scope. Some other SaaS applications are completely free to users, with revenue being derived from alternate sources such as advertising.
A key driver of SaaS growth is SaaS application providers ability to provide a price that is competitive with conventional software.
Popular Types of SaaS Software
It’s really pretty amazing how far cloud computing has come in such a short time. Today, you can develop SaaS web-based application software on a pay-as-you-go basis, without having to buy and maintain IT infrastructure and hardware.
Just to show you how much variety there is to be had in the cloud market space, here's a listing of all the most common SaaS applications that are now available to businesses.
- CRM Software - Manage customer information, automate marketing, and track sales.
- ERP Software - Improve process efficiency and empower information sharing across the organization while giving management better insight into workflow and productivity.
- Accounting Software - SaaS accounting software helps you keep your finances organized and properly tracked, without needing a finance degree.
- Project Management Software - Track scope, requirements, progress, changes, communications and deadlines to ensure projects get completed in the shortest possible time while meeting stakeholder requirements.
- Email Marketing Software - Automate email marketing and relationship building while optimizing message delivery.
- Billing and Invoicing Software - Save time and improve customer satisfaction by automating billing and invoicing processes.
- Collaboration Software - Simplify communications across the organization, prevent information silos and empower employees to follow complex interactions more easily. A good collaboration system allows for more effective communications and a more productive enterprise.
- Web Hosting and Ecommerce - Everything you need to do business on the Internet. This includes web hosting, CMS systems, Message Boards, Shopping Carts and more.
- HR Software - Track employee hours, hire more intelligently, schedule more effectively, automate payroll, and manage every other aspect of your human resources management.
- Public Sector, Compliance and EDI - Certain industries have standardized rules that must be strictly followed. Thankfully, you can leverage cloud applications to simplify interorganizational communications and ensure that you’re following the rules.
- Vertical Applications - Everything you need to operate a photography studio, martial arts dojo, real-estate firm, law office, medical practice, or just about any other business. Every industry has its own management applications, designed to optimize productivity and profitability.
- Transaction Processing - Accept credit cards, process bank transfers, keep a tab, publish and track coupons, barter or even run a loyalty rewards program.
Benefits of SaaS Software
Historically, companies were required to buy, build, and maintain their IT infrastructures despite exponential costs for doing that. SaaS gives companies an alternative. Now, they can plug in and subscribe to services built on shared infrastructure via an Internet connection using a web browser. The SaaS model has flourished in recent years because of the many benefits it offers to businesses of all sizes and types. Here’s what’s driving customers to take advantage of SaaS solutions:
SaaS applications are available from any computer or any device - any time, anywhere. Because most people are familiar with using the Internet to find what they need, SaaS apps tend to have high adoption rates with a lower learning curve.
Lower Initial Costs
SaaS applications are subscription based. No license fees mean lower initial costs. Having the SaaS provider manage the IT infrastructure means lower IT costs for hardware, software and the people needed to manage it all.
Because the SaaS application provider manages all updates and upgrades, there are no patches for customers to download or install. The SaaS application provider also manages availability, so there’s no need for customers to add hardware, software or bandwidth as the user base grows.
SaaS vendors with true multitenant architectures can scale indefinitely to meet customer demand. Many SaaS providers also offer customization capabilities to meet specific needs. Plus, many provide APIs that let you integrate with existing ERP systems or other business productivity systems.
Why SaaS is Popular for the Enterprise
The popularity of SaaS is steadily increasing because it simplifies deployment and reduces customer acquisition costs. With SaaS applications can support many customers with a single version of a product. This approach, called multitenancy, allows companies to scale as fast and as much as needed without replacing costly infrastructure or adding IT staff.
Why SaaS is Popular with IT
A recent survey of a thousand IT professionals by Forrester Research found that they are turning to SaaS application products as a way to offload management of non-mission-critical applications such as HR and CRM. Plus, the subscription-based SaaS pricing model can keep IT budget costs consistent or lower than conventional software.
InteractiveWest contractors have extensive experience with SaaS application development projects. Feel free to Contact Us to demo SaaS development projects and capabilities.