Software as a Service (“SaaS”) is an alternative to a traditional software installation, the latter of which involves an organisation having to buy a server, install an application and configure it.
With SaaS, you do not pay for the software itself. Instead, you rent the software and infrastructure for a set price and period of time.
There are many benefits to the SaaS model compared to traditional on premise software.
1. Save time with quick setup
SaaS products can be deployed and set up in a couple of hours. This is a significant time saving when you think about how long it would take you to install and configure software applications on a traditional server.
Let’s look at Office 365 for example. Imagine you have ten new staff members starting on Monday. With Office 365, you can sign up and your team can start using Microsoft’s cloud-based office suite in hours. This saves you a lot of time and ensures your team doesn’t have to wait to access the tools essential to their role.
2. Cost effective - lower your initial upfront costs
Buying software has traditionally been an expensive exercise. You might need to renew 300 Office licenses at once, which would be a huge cost to your organisation. The benefit of SaaS is that you rent the software license on a month-to-month or year-to-year basis, so you don’t actually own a license.
This means no big upfront costs because you distribute the cost of the license over the period of time you use it. If we look at Office 365 as an example again, we can compare it with the traditional on premise Office 2013.
Office 365 (SaaS) for business costs $12 per user per month. Office 2013 (on premise) will set you back $299 per license per year. So you can see that if you had a team of 300 users, your upfront costs would drop significantly using SaaS.
3. Free updates
You’re probably use to buying a new version ofsoftware every couple of years as new versions are released. You might have bought your team Office 2003, then upgraded to Office 2007 and so on. With SaaS products, you get automatic updates to your software. Since the solutions are deployed over the internet, SaaS vendors can update your software more frequently and easily. Most of the time, these updates are part of the price - you pay nothing extra to get the newest versions of your software applications.
For example, if you buy Office 365, all you do is pay your monthly license fee and you’ll always have the latest versions of Word, Excel and PowerPoint. You won’t have to buy complete new licenses to upgrade your software - it’s all included as part of the SaaS solution.
4. Easy upgrades and scalability
A growing or shrinking team can be a great challenge for efficiently managing licenses. As someone who manages the IT infrastructure, you’re probably use to buying new licenses as you grow, but as you shrink, you feel like your money’s tied up with licenses that aren’t being used.
With SaaS, you can easily upgrade and downgrade the number of licenses your organisation has.
SaaS also provides easy ways to upgrade your plans. If you want more features or the upgraded copy of the software, this can easily be done. In the past you might have to install a new copy of the software, but now you just click and get instant access to the new plan.
For example, upgrading from Office 365 Business to Office 365 Business Premium can be done with just the click of a button.
5. Seamless integration with other applications
Integrating software applications use to be a big hassle, involve lots of time, lots of money and lots of frustration. SaaS makes integrations easy because all applications reside in the cloud. SaaS vendors provide customisation capabilities to meet specific needs and many provide APIs (application programming interface) so that you can integrate your systems with each other.
For instance, if you wanted your ERP (enterprise resource planning) system to communicate with your accounting system, you can use the available APIs to get these two applications talking to each other. Innovative technologies like Zapier make this integration process even easier with smart ‘zaps’ that even non-technical people can set up and manage.
Examples of popular SaaS vendors
You’ve now seen what’s possible with SaaS. Let’s take a look at some popular SaaS vendors to show you what’s available.
- Productivity: Office 365, Google Apps
- Creative and design: Adobe CS
- Customer relationship management: Salesforce, Microsoft Dynamics CRM
- Collaboration: GoToMeeting, Dropbox, Trello
- Accounting and finance: Xero, MYOB, Quickbooks
Related: Four benefits of SaaS, Top five advantages of software as a service (SaaS)