What Exactly is Software as a Service?

Because the public cloud has amassed around $150 billion in annual revenues, the software as a service model has grown significantly. In fact, it’s grown by approximately 20 percent a year for the past five years. The public cloud currently houses over a third of all applications utilized worldwide, making it a tremendous contributor to the success of software as a service (SaaS). Has your business begun to take advantage of this phenomenon?

What is Software as a Service?
Software as a Service is a software that is accessed via the Internet. This is often provided through a service provider, a developer of the software or a third party authorized to sell or distribute it under certain conditions. The user can use the software as indicated in the service level agreement for a monthly fee. The cloud provider is responsible for hosting, management, maintenance, development, and security of the application, making it both an attractive and hands-off approach for businesses.

The Advantages of SaaS
A change from on-premise software hosting offers three distinct advantages for your organization: 

• Terminating hardware costs: Since you pay the developer per month for the use of their software, you don’t have to host the hardware on your infrastructure at all. This frees up a lot of money that could be better spent elsewhere.
• Terminating management costs: Organizations don’t have to manage or maintain the system, resulting in a significant cost reduction.
• Enabling remote accessibility: Any device can access a SaaS application via the Internet, allowing for access anywhere with available bandwidth.

Problems with SaaS
Nothing is perfect, even though it seems SaaS offers the biggest edge you can think of for a software solution. Some businesses must adhere to compliance regulations, which can in-turn affect cloud-based deployment of specific data or functionality. Since most cloud-based SaaS offerings are deployed through the public cloud, users’ applications are accessed using shared resources, which might rub some organizations the wrong way. Here are some of the issues created by SaaS:

• Potential downtime: Any solution hosted in an online environment runs the risk of downtime. Since downtime is so expensive, you need to observe how much downtime your business actually suffers from when using SaaS to make sure it’s actually turning a profit for you rather than becoming a cost.
• Cost: If you’re paying a developer for monthly access to a web-based service, there’s a good chance that it will ultimately cost your organization more in the long run than buying it outright. While there is a large benefit to smaller monthly payments compared to purchasing the license, when you’re considering multiple subscriptions to services, it can quickly grow overwhelming.
• Data security: Since your business doesn’t play a role in hosting cloud services, you’ll never know just how secure your data actually is. This might make you question how reliable these services actually are.

Overall, software as a service can be a great value for your business if it’s managed properly. If the public cloud scares you, there is always the option to work with a third-party MSP who can host your services privately on their own server. Macro Systems can help you with this. To learn more, reach out to us at 703-359-9211.