An Overview of Software as a Service {SaaS} Benefits and Applications

What is SaaS (nutshell)

Software as a service (SaaS) is a software licensing and delivery model in which
a third-party provider hosts applications and makes them available to customers
over the Internet. Also referred to as "on-demand software", SaaS is a precursor
in categories of cloud computing, alongside platform as a service (PaaS) and
infrastructure as a service (IaaS).

Cloud SaaS
The cutting edge cloud showed up in the form of Salesforce.com in 1999. It sold
an immaculate business benefit: client relationship management. CRM is
precisely what it sounds like. An organization uses a CRM to monitor who it's
offering to, what it's sold, and how to keep everybody cheerful. Before
Salesforce.com, organizations purchased or composed CRM programming and
ran it all on their systems. Salesforce generated CRM programming, however,
didnt distribute copies to their clients, it ran it all alone data center and sold per-
client access to it. The product never left the building, and its clients didn't need
to do much else; besides directed their web browser at the Salesforce.com
website, set up a record, sign in, and begin working. This appears to be
completely typical now that utilizing Gmail appears to be more normal than
running Outlook on your PC. However, Salesforce.com was progressive when it
arrived, eight years before Gmail. In the years since the cloud has overwhelmed
the planet.

ex. the cloud services of Azure, AWS, and Google. These three vendors offer
services ranging from big data in the cloud to server-less computing and more.
Benefits of the SaaS model:

SaaS removes the need for organizations to install and run applications on their
own computers or in their own data centers. This eliminates the expense of
hardware acquisition, provisioning, and maintenance, as well as software
licensing, installation and support. Other benefits of the SaaS model include:

Flexible payments scheme: Rather than purchasing a software to install, or

additional hardware to support it, customers subscribe to a SaaS offering.
Usually, they subscribe to this service on a monthly basis using a pay-as-you-go
model. Managing transition costs for recurring operating expense allows
businesses to exercise more predictable budgeting. Users can choose to
terminate SaaS offerings at any point to stop those recurring costs.

Regular Updates: Instead of buying new software, customers can depend on a

SaaS provider to routinely perform updates. This additionally reduces the burden
on in-house IT workers.
Flexible usage: SaaS offer highly scalable cloud services, which gives
customers options to avail more, or fewer, features or services according to their
need. Organizations can incorporate SaaS applications with other programming
utilizing application programming interfaces (APIs). For instance, a business can
compose its own product tools and afterward utilize the SaaS provider's APIs to
coordinate those tools with the SaaS offering.

Accessibility: Since SaaS applications are accessed over the Internet, users can
log in from any Internet-enabled device and location.
Criticism
But SaaS also comes with some potential disadvantages. Enterprises must rely
on outside vendors to provide the software, maintain that software, generate
accurate billing and expedite a secure business' data environment. Any service
disruptions, unwanted changes to offerings, security breach or any other issue
can profoundly affect the customers' ability to use those SaaS services.

SaaS is identical to the ASP (application service provider) and on the go delivery
models. The application administration model of SaaS is like ASP: the host has
the client's product and conveys it to subscribed end clients over the web. In the
product on request SaaS model, the host gives clients network-based access to a
solitary copy of an application that the provider made particularly for SaaS
distribution. The application's source code is the same for all clients and when
new components and functionalities are launched, they are rolled out to all
clients. According to the service level agreement (SLA), the client's information
for every model might be stored locally, or both locally and on the cloud.

SaaS applications for fundamental business technologies include email, office

and messaging software, payroll processing software, DBMS software,
management software, CAD software, development software, gamification,
virtualization, accounting, collaboration, customer relationship management
(CRM), management information systems (MIS), enterprise resource planning
(ERP), invoicing, human resource management (HRM), talent acquisition, content
management (CM), antivirus software, and service desk management, billing and
collaboration. Leading SaaS providers include Salesforce, Oracle, SAP, Intuit, and
Microsoft.

SaaS is a derivative of cloud computing:

When talking about software as a service (SaaS) and cloud computing, people
tend to use the two terms interchangeably. Although the two technologies are
related, they are not the same. SaaS is a type of cloud computing.
SaaS brief History
During the 1960s, SaaS was referred to as a time sharing system. In this
model, multiple terminals (keyboards and monitors lacking CPUs) were
connected to a mainframe or mini-computer, which hosted applications and data.
When the cost of desktop computers dropped, workers had their own PC that
hosted applications locally, while critical data was still hosted on a central server.
With a decreasing cost of bandwidth, the SaaS model for software deployment
returned as a cost-effective solution.

SaaS made its way back to the leading class over the years examples include
Google Docs, Yahoo! Mail and SurveyMonkey. These are all SaaS technologies
that are less costly than installing and maintaining applications on numerous
desktops across an enterprise, making it an attractive option for many
enterprises.
Similar advantages:
SaaS and cloud computing offer similar benefits to users.
They don't require careful installation or steady upkeep since they don't dwell on
the client's machine or an enterprise's server.

IT staff don't have to involve your PC like clockwork to overhaul your product or
ensure you have the most recent update for a specific application.

Maintenance issues are dealt with on the "server side".

Both SaaS and cloud computing are offered on a membership basis and can be
used instantly from anyplace a client has an Internet access.

SaaS and the cloud give an alternative option to keeping up and upgrading
software for every worker in the organization. Rather, an organization's
innovation assets and staff can concentrate their attention somewhere else, an
extremely appealing alternative for enterprises needing their IT workforce
performing innovative work or output enhancement capacities.

How The Cloud Works - Cloud and SaaS Computing

Cloud is different form SaaS in terms of Functionality and Data Security

The National Institute of Standards and Technologys (NIST) defines cloud
computing as a model for enabling ubiquitous, convenient, on-demand network
access to a shared pool of configurable computing resources (e.g., networks,
servers, storage, applications, and services) that can be rapidly provisioned and
released with minimal management effort or service provider interaction.

From a historical perspective, SaaS has led to the development of cloud

computing, which is essentially a larger platform and is where SaaS resides. SaaS
sits in the cloud. So cloud computing offers additional services other than just
SaaS. Another critical difference between SaaS and the cloud is that with SaaS,
all the data resides with the service provider. More often than not, the benefits of
SaaS outweigh concerns of data ownership and security. As an example, many
people use a free email service that controls and stores all our data for us.
Although we might want to know the companys privacy policies, many of us will
continue to use the service and feel relatively comfortable doing so.
With the cloud, you have more control. Although the servers are not local, you
manage the data and software and can make backups and store data in the
cloud. And you can move the data out of the cloud environment to your own
local repositories anything you would normally do with a bank of local servers.

Vertical and Horizontal SaaS

Though there are exceptions, there are two main ways SaaS platform works.
Vertical SaaS borrows its concept of vertical integration whereby there is more
control over a supply chain. Vertical SaaS companies focus on a niche industry
enabling more process control. Horizontal SaaS companies develop best of breed
offering and continue to expand with greater competition. Horizontal SaaS
companies has vast go to market game plan and produce category leaders like
Dropbox, Zendesk and Salesforce.
Horizontal SaaS
Horizontal SaaS: are products which focus on the software category; such as,
developer tools, marketing, HR, sales, onboarding etc. The maturity of SaaS
categories in the different segment, across industries, is not parallel and the
maturation process not on the same pace in all its application categories. The
most popular SaaS platforms are in horizontal Saas products for ex: Salesforce,
Slack, Zenefits, Wrokday etc.
The current focus in education based SaaS platforms has entered a new phase
which is characterized by larger customer base, highly competitive landscape,
and category winners. Productivity tools such as calendar, team communication,
messaging, video conferencing, project management etc. are leading in the
horizontal SaaS, but it wont be surprising to see emerging categories in sales,
marketing, and finance with the messaging platform serving as a catalyst to the
industry. Vertical SaaS
Vertical SaaS: Software which is industry specific: such as, software for the
healthcare, real estate, agriculture or finance industries.
The current trends indicate that the growth potential of industries are agreeing
with SaaS technology and will increasingly become Sass-ified. Currently, the
legal industry is integrating SaaS and with the advantage of execution speed,
SaaS key components can be copied from other industries who successfully use
SaaS.
Vertical SaaS represents the most popular segment of the worldwide software
market with over a $114 billion in revenues. More and more SaaS products are
focusing on marketplace dynamics in their business model and this trend
continues in many industry specific (Vertical) players. Practo is a good example
in the booking marketplace segment. Users book appointment at the doctor
online and at the same time provides business tools to manage and optimize
these bookings. In 2017 the existing marketplace will offer more SaaS features to
their top sellers.
Industries where workforce mobility is crucial: such as construction, real-estate,
transport etc., are using mobile and app-based software platforms following the
vertical approach and VC dominate this segment with its current levels reaching
maturity.

Integration of SaaS in the computing world and how it shaped the new
enterprise scenery.
SaaS has come a long way since its inception about 16 years ago. Before its
popularity, end users had to install updates frequently; store data on servers
inside the premises; companies had to buy new software and hardware which
required expensive consultants and system engineers. ASPs (Application Service
Providers) with central computing/service companies existed for a long time.
Then came Salesforce in the year 1999 and began a trend of no software! The
change was not without criticism, though. People feared of losing their jobs and
companies were skeptical about storing their data on someone elses servers.
Today, SaaS has become essential for enterprises with components crucial for
success. Benefits such as speed, of both implementation and administration cost
which was an early advantage and maintenance, contributed as key drivers in
the massive growth in the SaaS model.
The early success of SaaS companies gave rise to more as a service verticals.
Following which a new computing landscape, as well as upscale security
solutions, aligned itself with the SaaS model. The benefit of security with security
as a service was easy then what it was in the past. With cloud and remote
servers providing state of the art security free of users hardware limitation,
adoption came without trading off with user experience and performance. Cloud-
based security as a service worked in alongside traditional systems and
protected the modern workforces, who rely upon SaaS applications and Wi-Fi
networks anywhere; anytime. Prior to when SaaS became the norm, accessing
corporate systems and data outside the office was very difficult; especially when
regarding data security. Security solutions remained focused on network
perimeter while the SaaS adoption happened with a massive migration to remote
computing gaining the enterprise space.
Enterprises soon realized that attackers could easily outpace the conventional
security technology and security as a service is a powerful defense against
modern threats with the advantage which original SaaS speed, lower cost, less
maintenance. According to industry experts cloud-based security services such
as secure email or web gateways, identity and access management (IAM),
security information and event management, remote vulnerability assessment
will have a market value of $ 4.13 billion in 2017.
Security as a service is an essential part in cloud technology protecting remote
workers. As the network security becomes more important with the regular
breach in conventional security technologies, it is another aspect of original SaaS
which categorically changed modern computing.

Elements to SaaS start-up success

The SaaS success story has been phenomenal but what are the elements which
make a SaaS start-up successful. According to the industry experts who studied
and tasted success share their insights.
1. Building relationships.

You have to find interesting ways to connect with your audience. You have
to build a team that is passionate and highly accountable. The company
logo, blog, and press releases will help you to build a brand, for a
successful SaaS start-up, it is important that you are accessible and
transparent. Respect, trust, and presence are priceless, for which markets
are hungry for.

2. Think more than Freemium model.

Success stories such as Dropbox and Evernote leads many SaaS adopters
for the freemium model and roll out their services for a quick response.
Freemium is a good way to test your product and early success, at times,
could be miss-leading. A better way is to find out what your customers
like, want and learn how to sell and deliver product efficiently. Focus on
 converting freemium users into paying customers sooner and offer free
components when your product is mature.

3. Concentrate on Retaining Customers.

Acquiring new customers is exciting; however, your reliable source of

revenue is by far are your current customers. Successful SaaS products
need a deeper understanding of client desires and behaviour. Client
retention and acquisition should be marketed separately and must never
mix as one. And if you cant do with other; always choose client retention.

4. Cyber security is a priority.

As we step into 2017, web security is going to be one of the biggest

challenges for a successful SaaS start-up. Sophisticated attacks are
becoming a norm. The cost of recuperating from a security break or
assault goes long ways past removing malicious code or securing
shortcomings that have been abused to devastate a business' popularity.
Sensitive customer information can be uncovered, which places
organizations at serious financial hazard for having their administrations
inaccessible. Cloud security administrations ensure the unwavering quality
and security that SaaS start-up requires conveying productive online
software services.

5. Know How to Monitor Performance

Ideal SaaS onboarding systems can't be made inside a vacuum. They
take a watchful mix of perception and re-assessment. Moreover,
enhancing the selection of SaaS, looks after these same strategies. You ought to
screen client execution amid the wake of training. This allows preparing
managers to give more nuanced support at whatever point issues emerge.
Observing software can incorporate databases and integration testing.

When introductory training ceases, you ought to assess regardless of whether

the initial training objectives were met. This signs you into what was fruitful in
the training program, and what could utilize some cleaning. Additionally,
criticism from the end client is imperative to get an overview on how well the
training program was received. In a perfect world, this observing and re-
assessment criticism circle should happen at regular intervals with a specific end
goal to enhance training proficiently.