What is SaaS?

SaaS (Software-as-a-Service) is a software model that incorporates the delivery of a software application to a remote client via the Internet. Software-as-a-Service relies on the centralized hosting of a software application in the “cloud” which is typically accessed via a web browser application. Software-as-a-Service can be configured to allow public access or private access, where only users with the proper credentials are granted access to a particular hosted software application. Software-as-a-Service, also known as on-demand software, provides many advantages over the traditional software model.

SaaS Advantages Over The Traditional Software Model

Software-as-a-Service provides the combined benefits of increased IT efficiency and reduced software costs for an enterprise. Traditional software is costly for several reasons. To start with, a separate license must be purchased for each workstation that will access an enterprise software application. Multi-user software license costs can be high and software licenses typically can not be shared by users. Local installations of software within an enterprise also require a significant investment in application servers. In addition, traditional software applications are often accompanied by expensive and time consuming implementation requirements. What’s more, ongoing maintenance and support costs for traditional software implementations can represent a major expense for many enterprises. The Software-as-a-Service model significantly reduces the expenses typically associated with locally hosted software applications.

SaaS Costs And Implementation

In the Software-as-a-Service model, the enterprise is shielded from an upfront investment in software and hardware, as well as the ongoing maintenance and support costs of hosting and maintaining software applications on a local basis. Software-as-a-Service provides a cost savings to an enterprise because software applications are delivered on a subscription basis. Implementation and maintenance costs are absorbed by the SaaS provider, which can be spread out across the entire customer base through subscription fees. Fees are typically assessed to subscribers on a monthly or annual basis. Subscribers avoid the cost of up front licensing fees and ongoing maintenance and support fees under the SaaS model.