What Is SaaS Business Model?
SaaS stands for Software as a Service that allows users to have their own version of the software without owning it.
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Software As A Service (SaaS) is commonly known as cloud-based software. Today, Software as a Service is widely used by individuals and organizations across the world.
According to Gartner, Inc., SaaS solutions were estimated to raise $85 billion in 2019. In 2020, they are estimated to generate $105 billion - $20 billion more than the last year.
But why is the SaaS market gaining such enormous profits? Why are they so popular? What features are helping it to gain such traction? You will find answers to all these questions here.
This article will cover the following topics:
- What is Software As A Service?
- What are the salient features of SaaS applications?
- How can SaaS applications benefit your business?
- How can you move an existing application to the SaaS model?
Let us begin by understanding the meaning of "Software As A Service."
What Is Software As A Service?
Software As A Service refers to delivering software over the internet. It is a cloud-based service that allows you to access your data from anywhere if you have a web browser and an internet connection.
Gartner, Inc. defines Software As A Service as " A software that is owned, delivered and managed remotely by one or more providers. The provider delivers software based on one set of common code and data definitions that is consumed in a one-to-many model by all contracted customers at any time on a pay-for-use basis or as a subscription-based on use metrics."
A software sanctioned with the Software As A Service business model is known as a SaaS Application. These applications don't have to be installed on your computer as they are hosted in the cloud.
Some common examples of SaaS Applications are Google Apps, Microsoft Office 365, Amazon Web Services, Slack, and Dropbox.
What are the Salient Features of SaaS Applications?
SaaS applications have various features that are attracting more and more users towards them. These features make SaaS applications a preferable choice for many people.
The salient features of SaaS Applications are listed below:
Users of SaaS applications subscribe to the software instead of purchasing it. This eliminates the task of software installation as users have a ready-to-use application in their hands.
You can pay a fee monthly or annually and use these applications.
As it is a subscription-based model, it saves your time and energy because you don't have to deal with the potential installation bugs. You can start using the application the moment you set up your username and password.
There is no need for the user to be present at the workplace to get access to data.
SaaS applications are deployed over the internet, which means that the user can work from any place, as long as s/he has a web browser and an internet connection.
This feature of SaaS Applications is one of the main reasons behind SaaS application users' rapid increase.
As a user, you don't have to worry about the regular software updates.
The SaaS applications are centralized, which implies that the software is deployed at a single data center. The host is responsible for managing the updates and other technical aspects of the software.
You receive a readily functioning software and you don't face any delays because you don't have to handle its complex technicalities.
Many SaaS applications offer the option to share and collaborate information on their application.
For example, many project management SaaS applications allow you to comment on the plans and share documents with people within and outside your organization.
This feature allows users to work cooperatively on projects. This feature may or may not be available in your onsite software.
Offer Application Programming Interfaces (APIs)
Application Programming Interfaces are computing interfaces that facilitate interactions between different software. They act as an intermediary to allow communication between multiple technical products or services.
The use of Application Programming Interfaces with SaaS makes it possible to integrate different software.
SaaS applications cannot access your firm's internal databases and systems. Hence, they offer integration protocols and application programming interfaces that function over a vast network. It will assist you in integrating all your future application purchases easily.
How Can SaaS Applications Benefit Your Business?
Here is a list of all the ways SaaS applications can benefit your business:
Scalability allows you to manage a large amount of data efficiently. Hence, it is essential to have scalable solutions for your business.
SaaS applications are easily scalable because they are deployed in a cloud-based environment. It can easily be integrated with similar software by enabling a new SaaS offering. Hence, there is no need to purchase other software for this purpose.
SaaS applications are readily available for use. Hence, they eliminate significant costs like:
- Initial software purchase costs
- Installation costs
- Maintenance costs
- Upgradation Costs
- Hardware Installation costs
By subscribing, you pay a monthly or yearly fee and conveniently use the application.
Quick Set-Up and Easy to Use
Saas applications are readily available for use. It is already configured. Hence, it is quickly set-up and saves you the time of software installation.
SaaS applications can be accessed and used by various devices with internet connectivity. You can easily use the application from your mobile phone also. These applications offer great user interfaces and friendly user experiences, making them very easy to use.
Some SaaS applications also guide their first-time users around the app.
For example, Google Drive offers you a step-by-step guide when you first use the application, telling you every feature's purpose by using suitable pop-up messages.
You are a user of the SaaS application. Hence, you are not concerned with the glitches and tedious tasks of setting up upgrades.
The host or the vendor offers you the updates which run smoothly and hardly take a few minutes to complete.
Some SaaS applications may also offer the option of upgrading the software in the background without disturbing your ongoing work on it.
Enhanced Performance and Time Management
Cloud-based solutions take a lot less time to set up as compared to onsite software. Hence, you save a lot of time and resources that you would have spent setting up the software and dealing with its aspects.
You have access to features that are already set up and running. Hence, it allows you to manage your time better and invest your resources in other business areas.
Almost all SaaS applications allow customization to a certain extent. This feature allows you to set up your software or user interface according to your preferences and ease. Hence, your performance enhances as you don't have to deal with the issues of learning your way around new software.
How Can You Move an Existing Application To the SaaS Model?
You can move your existing application to the SaaS model by following the steps listed below:
Analyze Your Environment
The first step is to analyze your present infrastructure and find out what you don't want to carry forward.
Determine each application's status and find out if it is cloud-friendly or not, as sometimes the effort of moving a non-cloud-friendly application can be more than the output itself.
Also, find out the relationships between your applications. Analyzing these relationships will help you to find out the applications that should not be upgraded or moved without each other. It also introduces the possibility of merging applications.
After this, examine the infrastructure of the application, including
- storage required
- data generated
- expected Service Level Agreement (SLA)
Also, calculate and evaluate the hidden costs and financial requirements.
Choose the Cloud Environment
It is essential to choose what kind of cloud environment you require to move your application.
There are three types of clouds —
- Public Cloud
- The public cloud is similar to a regular off-site server, based on a pay-per-use model.
- Private Cloud
- The private cloud offers you a single occupant solution, which is easy to control and is specific to your firm. However, it includes maintenance costs and also requires internal IT expertise.
- The Hybrid Mix
- The hybrid mix is a mixture of private and public clouds, which can handle different workloads.
Select the Right Cloud Provider
It is essential to select the required architecture. It would help if you chose a provider that meets all your requirements. Some factors you should consider while choosing the right cloud provider:
- Storage Requirements
- Computing Power
- Load balancing needs
- Database replication
- Quick customer service
- Better feedback
- Assured SLA
Perform Required Refactoring
Before migrating, ensure that your applications would work as effectively on the cloud as possible. This purpose may require refactoring.
Refactoring implies that you may have to restructure your applications for better resource utilization of the cloud-based environment.
It will also help you to save your cloud servicing expenditures.
The demand for SaaS applications is increasing rapidly. With the range of benefits, it offers, more and more people are willing to shift to SaaS solutions. By following the steps explained above, you can also migrate your existing application to SaaS.
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