SaaS (software as a service) is a software delivery model that is cloud based. Cloud providers offer automatic software updates, develop and maintain cloud application software, and offer pay-as-you-go software to their customers via the internet. Public cloud providers manage hardware and traditional software including application software, middleware and security. This means that SaaS customers can potentially benefit from lower costs and are able to scale, deploy and upgrade business solutions quicker than would be the case with maintaining on-premises software and systems. It also allows customers to predict the total cost of ownership with increased accuracy.
Modern software as a service cloud applications can cover and connect everything from human resources, financial services, supply chain processes and procurement to marketing, sales, commerce and service solutions.
What Are the Characteristics of SaaS?
The SaaS model allows businesses to increase customisation, better connect with customers and stakeholders, and lower costs due to its four key characteristics. The first of these is its architecture, which is multi-tenancy, meaning that vendors can innovate faster which, in turn, saves on development time. The second characteristic is the ease with which users can customise their applications without impacting shared infrastructure.
Better access from network devices is the third key SaaS characteristic, and the fourth is the way in which SaaS applications harness the consumer web, making updating business software quick and efficient.
When Was the First SaaS Solution Developed?
The first SaaS solutions were developed in the late 1990s, which was also when this term was originally coined. The new model offered much greater efficiencies than its ASP predecessor; a single application was able to serve multiple users and customers due to its multi-tenant architecture, and it didn’t require local installation of software. The newly emerged SaaS solutions provided a means of aggregating, collecting and centralising important application data.
The Advantages of SaaS
SaaS experts – like Volker Hartzsch, who has developed SaaS software solutions – know that these solutions are cost-effective for customers as they only pay for what they use. The service will automatically scale up or down depending on usage. Furthermore, most SaaS applications can be run directly from users’ web browsers without the need to purchase and install special software. SaaS customers have the opportunity to access sophisticated applications such as CRM and ERP and can access application data from anywhere. Finally, SaaS solutions enable customers to mobilise their workforce easily without the need to develop applications to run on a variety of devices and computers, as this has already been taken care of.
For more information about SaaS revenue models, take a look at the embedded PDF.