Have you seen people throwing the acronym "SaaS" around and aren't sure what it means or how it works? Maybe you want to learn more about tech, or maybe you just want some cool dinner table talk for when you finally end your 7th period of quarantine... Either way, I've got you covered.
What is SaaS?
SaaS stands for Software as a Service, a software distribution model in which a cloud provider hosts applications and makes them available to end users over the Internet. Put another way, SaaS is a means of delivering applications over the Internet as a service. Think Microsoft 365, Dropbox, Amazon Web Services, Google Apps, or Syft Analytics.
Other names for SaaS include:
Web-based software
On-demand software
Hosted software
SaaS is one of the three main categories of cloud computing, the others being Infrastructure as a Service (IaaS) and Platform as a Service (PaaS). Cloud computing refers to the delivery of certain platform services, such as storage, data backup, servers, networking, analytics, and software, through the web—a.k.a. the cloud platform.
So, you can think of SaaS as part of the cloud we always hear so much about.
Okay, cool, but why is this great?
Remember back in the day, when you'd go to your local tech store and buy a CD-ROM (or even a floppy disk) to install Microsoft on your computer? Well, with SaaS, you don't even need to leave your house. Today, you can download Microsoft 365 online and pay a subscription fee electronically - which will then be renewed yearly.
Not only does this mean that you don't have to leave your house to get new software, but also that the software is much easier to update and maintain.
Some other reasons this is great include:
It's super quick to launch the software
It's easy to scale by adding users without the need for new hardware or other infrastructure
It's easy to cancel your subscription at any time and similarly easy to upgrade and downgrade
It automatically updates
Your hardware costs are lower
You have less of a need for on-site visits for support
It doesn't need much maintenance or downtime
You don't need to go through a big installation process with equipment updates or traditional licensing management
It's easy to access - online
If you have a computer with a decent internet connection, you're good to go.
What's the catch?
Well, yeah, if you bought the Microsoft CD-ROM back in the day, then you wouldn't need to pay for that again every year; that's a once-off expense. Then again, I'm not sure that paying every year is so terrible if it means you're getting a newer version of the software. You could still be using your old software from the year 2000... But wouldn't you like something a bit better?
Another catch is that you need to have an internet connection to download and, in some cases, also to use the software. So, if you don't have a reliable internet connection, SaaS may not be the right solution for you.
So, how does SaaS work?
An independent software vendor (ISV) may contract a third-party cloud provider to host the application, or in the case of larger companies, the cloud provider might also be the software vendor.
Organizations can also integrate SaaS applications with other software using application programming interfaces (APIs). An API is code that allows two software programs to speak to each other.
To access the software, which is a ready-made solution, you pay a subscription fee. The SaaS company takes care of everything else —from updates to maintenance to storing your data.
One way to make sense of SaaS is to think of it as a bank. Banks protect their customers' privacy while providing reliable and secure services - at scale. When you use your bank app, you know that you're using the same app that thousands of other people are, but it's secure, so you don't have to worry about other people gaining access to your personal information or finances without authorization.
Any cool SaaS facts I can add to my dinner party chat?
Of course! Here are my top 5 interesting SaaS facts for you:
SaaS is a lot older than you think: it emerged in the 1960s alongside early computers! The 1960s version of SaaS was called a "time-sharing system" and involved multiple terminals networked to a mainframe.
The 1980s and 1990s versions took the form of Local Area Networks (LANs), in-house systems where applications were hosted on local machines and vital business data kept on a central server.
One of the main reasons that SaaS as we know it now came into existence is the problem of a lack of drive space on computers. When hard drives began filling up with "bloatware", apps you didn't really need that came along with apps you did need, everyone was running out of space!
Just before SaaS came ASP (Application Service Providers), which were similar in many ways, but which didn't hold good on a lot of their promises.
The customer relationship management (CRM) application Salesforce was the first SaaS built from scratch to achieve record growth.
Overall, SaaS is pretty cool. It means you can have the latest version of a software application - from CRM platforms to financial reporting, analytics, and your usual Microsoft suite - without having an IT specialist come to your house or office to fix it up. It also means you don't have to store all your data on your hard drive or worry about its security. And all you need to access it is an internet connection. SaaS companies center what they do around the user, ensuring your experience is smooth and easy.
Maybe it's time to think of trading in ye olde CD-ROM? Or hey, at least you can finally explain SaaS to your tech-phobic uncle now.