Software as a Service (SaaS) is a type of Cloud Computing. SaaS is a software distribution model in which applications are hosted by a vendor or service provider and made available to customers over a network, typically the Internet. SaaS is also known as "on-demand software". In SaaS, software and associated data are centrally hosted on the cloud. SaaS is typically accessed by users using a thin client via a web browser.
- SaaS is easier to buy
With pricing based on a monthly fee, SaaS allows organizations to access business functionality at a cost typically less than paying for licensed applications. Unlike traditional software which is conventionally sold as a perpetual license with an up-front cost (and often an optional ongoing support fee), SaaS providers generally price applications using a subscription fee, most commonly a monthly or an annual fee.
- Less Hardware Required with SaaS (Software as a Service)
As software is hosted remotely, organizations don't need to invest in additional hardware.
- Little or Low Maintenance Required with SaaS (Software as a Service)
Software as a Service removes the need for organizations to handle the installation, set-up and, often, daily upkeep and maintenance. Initial setup cost for SaaS is typically less than the equivalent enterprise software. SaaS vendors typically price their applications based on some usage parameters, such as the number of users using the application. So SaaS provides easier administration. SaaS does automatic updates and patch management.
- No Special Hardware or Software Versions Required
There are no compatibility issues using SaaS-based software. All users will have the same version of software and typically access it through a web browser. SaaS reduces IT support costs by outsourcing hardware and software maintenance and support to the SaaS provider.
As data is stored on the cloud, security may be an issue for some users. However, Cloud computing is typically just as, if not more, secure than in-house deployments. Learn more Cloud Security.
- Latency Issue
Because the data and application is stored in cloud at a variable distance from the end user, there is a possibility that there may be more latency while interacting with the application than a local deployment. So, SaaS model is not suitable for applications that demand response times in the milliseconds.
- Total Dependency on Internet
Relying on an Internet connection means that data is transferred to and from a SaaS firm at Internet speeds, rather than the potentially higher speeds of a firm’s internal network. Without an Internet connection, most SaaS applications are not usable or functionality is significant degraded.
- Switching between SaaS vendors is difficult
Switching SaaS vendors may involve the slow and difficult task of transferring very large data files over the Internet and then converting and importing them into another SaaS or locally installed application.