Software as a service (SaaS) has taken the world by storm. Nearly every business uses some form of SaaS today, with companies using an average of 16 SaaS apps to assist in daily operations. Adoption of cloud-based software is only expected to grow: By 2025, 55% of large enterprises will implement an all-in cloud SaaS strategy.
Here’s everything you need to know about SaaS for your business.
What is a SaaS?
SaaS is a software licensing and distribution method that allows users to access data from any device with an internet connection. Generally, users aren’t required to install or update programs on their device as SaaS programs are accessed through a web browser in which users log into their account with their username and password. However, there are some cases in which companies provide both a web-based version and downloadable desktop version of their program, such as Spotify.
Most SaaS companies work with a cloud service provider that manages the program’s underlying infrastructure, including the data centers, security, servers, development tools, app software and app data. When working with a cloud service provider, your company owns its data, even though it is located on the service’s servers. Most contracts will denote your business’ ownership of the data and your right to retrieve it, including contingency plans if the vendor goes out of business and the ability to back up your data locally.
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SaaS is also scalable, meaning that you can typically adjust your billing plan based on your current need.
Pros and cons of SaaS
Pros:
- Accessibility: Since SaaS applications are accessed through a web browser, they can be accessed from any internet-enabled device, at any location, and with any operating system (from Windows/macOS to iOS/Android).
- Affordability: Because SaaS does not require software installation or the purchase of additional hardware, your upfront expenses will be significantly lower. While you still pay a recurring subscription fee, having this cost as a recurring expense can make budgeting easier and more predictable. SaaS is also scalable, meaning that you can typically adjust your billing plan based on your current need, so you pay for what you need and nothing more.
- Automatic updates: SaaS providers automatically perform updates and patch management, which reduces the workload of your in-house IT team, as well as costs associated with maintenance and repair.
- Data saving and storage: If you have on-premises hardware, you need a disaster recovery plan in case the hardware crashes, or if the data is otherwise lost or compromised. However, SaaS regularly saves data to the cloud, eliminating the need for backup data storage. This also allows users to switch between devices without losing their work.
Cons:
- Internet access: SaaS applications require an internet connection or high-speed phone network to function. While this is not typically an issue in-office, employees may have limited connectivity at home or on the go. Additionally, a power or internet outage can cut access altogether. To help mitigate this issue, some SaaS applications have an offline mode that offers basic functionality.
- Reliance on outside vendors: Since the SaaS provider is responsible for managing the hardware and software, your business must rely on them to keep everything running smoothly and securely. Providers may experience service disruptions or security breaches on their end, or they may change their service offerings. To prevent any issues from arising, businesses should read and understand the terms of their service agreement and make sure that they are enforced.
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Examples of SaaS applications
Companies all over the world now rely on SaaS solutions to keep their organization in business. These are just some examples of B2B SaaS applications that your company can implement to increase efficiency and productivity:
- Payment software: Not only can you collect payments from customers, but you can also collect customer data to gain insight into your business. Examples of payment SaaS applications include PayPal, Stripe and Square.
- Email marketing software: You can schedule emails, store contacts, and collect data on customer engagement. Examples of email marketing SaaS applications include Mailchimp and Constant Contact.
- Messaging software: Employees and customers alike can communicate through a messenger SaaS. Gmail, Slack and Microsoft Teams are examples of email and messaging SaaS applications.
- File sharing software: You can securely share files with both customers and employees through a file sharing SaaS. Examples of file sharing programs are Google Drive, Microsoft OneDrive and Dropbox Business.
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