Solutions that are centrally hosted, offered upon subscription, can be accessed from anywhere, and are a part of cloud computing are called SaaS or Software as a Service. Google Drive is an example of SaaS that quickly comes to mind. SaaS is often viewed as a business model, while it is often mistakenly equated with leasing, which is still different although it has common features. The most interesting thing about SaaS is the technology behind its model.

In this article, we will look at the features of this business model, SaaS meaning and benefits of its usage for different sized businesses.

What Is SaaS?

SaaS is often referred to as the method of licensing and distributing software through the cloud. This approach allows users to access data from any device that is connected to the Internet. Usually there are different subscription models and possibilities for scaling upon demand. Cloud-based apps can be accessed via desktop. A provider of cloud technologies provides everything needed for the service to function, including data center, data storage security, development tools, etc.

SaaS, as a form of software, has taken the world by storm. Instead of installing a necessary app directly on the device, as was done before, now the service itself is hosted in the cloud, on a server located anywhere in the world. And to gain the access, you need to run an app in a browser – and everything is immediately ready to go. Many companies are already using some form of SaaS. Gmail is the simplest and most widespread example. According to BetterCloud, one business uses an average of 16 SaaS solutions for day-to-day operations. By 2025, it is estimated that 55% of large enterprises will implement end-to-end cloud SaaS infrastructure.

A Key Driver of SaaS Development

The history of SaaS began in 1999, and it was called software on-demand back then. Of course, growth rates were much slower then. But now we see the rapid spread of SaaS systems in all spheres of life: from entertainment (Netflix, Spotify) to business operations (CRM systems, IP telephony, analytical tools). Today we are already using the possibilities of cloud services with might and main, without even thinking how much they have made our life easier. Now we can close the laptop, come to work, enter the login and password to log into the computer and continue working from the same place.

Since SaaS is based on the principle of providing services over the Internet, the development of cloud technologies is directly related to the history of the world wide web. The popularity of cloud technology is growing along with the speed of the Internet.

The emergence of high-speed networks, wi-fi, and the constant improvement of mobile communication standards invariably entails new SaaS upgrades. The throughput of services, the speed of information processing, the amount of storage are increasing, the toolkit is becoming more complex and expanding.

What Are the Advantages of a SaaS Concept?

SaaS applications have received strong support from IT professionals, end-users, and executives. The SaaS model has gained tremendous popularity due to several reasons: 

• the demand for mobility
• the need for flexible and adaptive systems
• demand for customization, which the client does himself

Let’s consider these advantages in more detail:

• Independence from proprietary software and physical devices

Cloud technologies allow you to access all the functionality through a web application. You do not need to install software on a physical medium: a computer, tablet, or phone. Thus, SaaS is independent of a specific device. This means that neither the replacement of the device, its loss, nor a malfunction does not affect your data because it is in the cloud storage. For example, Google Drive data is not stored on any of your devices but in the cloud, which is why you can access it anytime, anywhere.

• Subscription-based access

SaaS may have different pricing models, but subscription is the most common option today. The delivery of services takes place on an ongoing basis. Take Netflix for example: a customer purchases a subscription, the service charges the payment – and for a month, a client have access to a streaming service with tons of movies and TV series. Recurring automatic payments are the primary source of revenue for a SaaS business. Income for subscription services fluctuates and changes from month to month, depending on the pricing model and customer satisfaction.

• No need to download updates and monitor performance

A big advantage of using third-party services is that all maintenance and technical support issues are the responsibility of the vendor. This reduces the financial costs of in-house developers and increases the efficiency of the work in general because control and revision of the service work are also carried out on the other side. High-quality modern services regularly release updates: they fix bugs and add new functionality in response to audience requests.

• Data security

Data in the cloud is physically stored and processed on servers similar to those that clients would use to install the program in their office, only much more powerful and high-quality. These servers are installed in Tier 4 certified data centers, which means full redundancy of power supply, air conditioning and Internet connection, which allows them to ensure their continuous operation 24/7. And the information is copied to several data centers at once, which guarantees its safety even in the event of a complete stop of one of the data centers. A staff of highly qualified engineers is responsible for this.

• Scalability on demand

SaaS is suitable for projects with growing and difficult-to-predict workloads. It is possible to scale the infrastructure in the peaks of user activity in an automatic mode.

• Cost-efficiency

A client gets the opportunity to save budgets without purchasing software, but getting it for rent using flexible service delivery and pricing schemes. He can also save on the purchase of additional software, for example, used for data backup, as well as on the maintenance of the information system.

What Are the SaaS Examples?

The SaaS model is adopted everywhere:. Here are some popular SaaS examples that are commonly used by various companies to improve efficiency and productivity:

1. Services for storing and sharing files: OneDrive, Dropbox. They allow creating documents and collaborating on them, as well as sharing them with other users, clients or employees. Also, such a service as Google Drive allows users to use it as a workplace solution. 
2. Email marketing services: MailChimp, SendPulse, CarrotQuest, Constant Contact. These services are needed to create and send email campaigns, collect and store contacts, and get statistics on user interactions with your emails.
3. Enterprise management systems (1C: ERP, SAP Business One). Such services include free online document editors, a set of integrated business applications, user administration and data backup. They contain everything a business needs to work with office documents, as well as communication tools in real time.
4. Payment gateways: PayPal, Stripe, Fondy. SaaS payment systems have become the absolute norm: they help receive and make payments for businesses, collect customer data, create a subscription business with automatic debiting of funds.
5. Messengers: Gmail, Slack, Microsoft Teams, Telegram. These are typical examples of SaaS email and messaging applications.

Things to Consider When Buying SaaS Solutions for Your Business

There are more and more SaaS solutions in the market every day. To find those beneficial for your business, learn about the SaaS company and their offers, read reviews, and test the program if a free trial is available. It is essential to identify the problem you want to solve with the software tool. For example, if you want to automate the process of tracking customer requests, evaluate available SaaS solutions from the perspective of this particular functionality

After identifying the problem, you need to define the main functions the SaaS should have:

• Make a list of required functions

Saas can have the functionality to help plan projects, maintain joint documents, conveniently comment on tasks and plans, exchange files inside and outside the organization. There is also an increase in software products that combine human resources management, payroll accounting, and cost management.

• Find the subscription model you need

Once the goals and functions are defined, you can begin to search for the desired pricing plan. SaaS companies usually have several pricing plans, these plans can be adjustable, there can be additional tools at additional cost, and pay-as-you-go models.

• Read user and experts reviews

Reviews can help you identify the strengths and weaknesses of each application and help you make a more informed decision. On such resources as G2, TrustPilot users post comparisons of different software. Also, reviews written by experts in the field might be of great help. This will help you determine which tool will do the job best.

• Contact various suppliers for specifying some info

When the selected applications have been tested, it is worth contacting the software vendors. A lot of B2B SaaS tools offer calls and demonstrations before the trial period.  Ask the supplier about specific features, scalability, cost, support availability.  You will understand whether the SaaS product you choose will help grow your business.

Conclusion

Software as a Service is a sufficiently convenient and simple cloud solution that will allow you to use the company’s servers regardless of the current location, time or device. All solutions are adapted for remote access, and several users can use one application at the same time. Clients get access to the Saas on a lease basis for the selected configuration of computing power, which can be flexibly scaled – expanded or reduced – depending on the current business needs, if necessary.