What is SaaS? 10 FAQs About Software-as-a-Service

Software-as-a-Service (SaaS)—also known as cloud based software—is now mainstream. Almost half (48%) of respondents in Gartner's 2021 ... × Getadvice Research&Articles AllCategories ForVendors AboutUs Forfreesoftwareadvice,callusnow!855-998-8505 Research&Articles AllCategories ForVendors AboutUs Getadvice—it'sfree WhatisSaaS?10FAQsAboutSoftware-as-a-Service By:TaylorShortandLaurenSpiller onJanuary5,2022 Software-as-a-Service(SaaS)—alsoknownascloudbasedsoftware—isnowmainstream.Almosthalf(48%)ofrespondentsinGartner’s2021EmergingTechnologyProductLeaderSurveywhoareputtingfundstowarddataandanalyticsselectedcloudbasedsoftwareasoneoftheirtopthreeareasofemergingtechnologyinvestment. Andforgoodreason.Businessapplicationsdeliveredviaawebbrowserlackpainfulinstallationsorstrictcontracts,andarepaidforovertimeinsteadofallatonce.Thisusuallymakesthesystemsmoreflexibleandaffordableenoughforanybudget. YetmanyofthebusinessleaderswespeaktoeverydayatSoftwareAdvicestillhavequestionsaboutSaaSandwanttoknowwhyitcouldbeagoodchoicefortheircompany.Basedonthoseconversations,herearethetop10frequentlyaskedquestionsaboutSaaS. 1.WhatisSaaS? SaaSisamethodofsoftwaredeliverythatallowsdatatobeaccessedfromanydevicewithaninternetconnectionandawebbrowser.Inthisweb-basedmodel,softwarevendorshostandmaintaintheservers,databases,andthecodethatmakesupanapplication.   Thecloud-basedmodelissocommonnowthatmorethan60%ofsoftwareseekerswhocallSoftwareAdviceonlywantweb-basedproducts—lessthan2%specificallyaskforon-premisesoftware. Thetraditionalon-premisesoftwaredeliverymodeldiffersfromSaaSintwokeyways: SaaSdeploymentsdon’trequireextensivehardware,whichallowsbuyerstooutsourcemostoftheITresponsibilitiestypicallyrequiredtotroubleshootandmaintainthesoftwarein-house. SaaSsystemsaretypicallypaidwithinasubscriptionmodel,whereason-premisesoftwareisusuallypurchasedthroughaperpetuallicense,paidupfront. On-premiseuserscanalsopayupto20%peryearinmaintenanceandsupportfees.TheannualormonthlysubscriptionfeeforaSaaSsystemwilltypicallyincludethesoftwarelicensing,support,andmostotherfees. 2.SaaSversuson-premise:HowdoIchoose? Thefirststeptoansweringthisquestionistodeterminethecomplexityofyourbusiness.AnswerafewquestionsaboutyourbusinesstohelpyoudetermineifSaaSisthebestchoice: Howspecializedisyourbusinesscomparedtoothersinyourindustry? Dooff-the-shelfproductsofferthefunctionalityyouneed? Whatlevelofsoftwarecustomizationdoyouanticipateneeding? Anotherfactortoconsiderisyourbudget.Asmentionedabove,SaaSsubscriptionpaymentmodelshelpcompanieswithsmallerbudgetsspreadthetotalcostofownershipovertime,soevensmallbusinessescanadoptrobust,modernsoftware. It’snolongerthecasethatbuyershavetochoosebetweenflexibilityandfunctionality.Mostcloudbasedsoftwaretodaycanoffertheexactsameexperienceasanon-premiseinstallation. Thebiggerquestionisarounddataownership.Thevastmajorityofvendorsstillplacedatainthepossessionoftheenduser,butbesuretoreviewtheservicecontracttounderstandexactlyhowyourdatawillbeused. Afewindustriesareslowertoembracecloudsolutions(forexample,manymanufacturersstilloptforatraditionalERPdeployment),butwhensearchingfornewtechnology,thecloudisthenewdefault. 3.WhatisthehistoryofSaaS? Ina1961speechtoMITstudents,JohnMcCarthy,arenownedcomputerscientistthatwontheTuringawardforhisworkinartificialintelligence(AI),famouslysaid,“computationmaysomedaybeorganizedasapublicutility.”Inotherwords,theconceptofcloudcomputingbeganasasharedresourceofcomputingpower. Whiletheideahasbeenaroundforsometime,theweb-basedtechnologyrequiredtosupportSaaSmaturedinthelate1990s.That’swhencompaniessuchasSalesforce—whichwasfoundedspecificallytocreatecloudsoftware—beganofferingtraditionalenterprisesolutions,suchascustomerrelationshipmanagement(CRM),throughaSaaSmodel. Forecastshowingworldwidecloudservicesrevenuegrowththrough2025(inbillionsofUSD) Atfirst,theenterprisesoftwareworlddidn’ttakeSaaSseriously.ButthepastdecadehasshownrapidSaaSgrowthandadoptionwithanewsetofbusinessesusingsoftwareforthefirsttime(fullcontentavailabletoGartnerclients).Cloudadoptionisgrowingfarquickerthanothercloudtechnologysegments,suchasPlatform-(PaaS)orInfrastructure-as-a-Service(IaaS)products. 4.CanIcustomizeSaaSsoftware? Yes!Today’sweb-basedsoftwareisflexibleenoughtobemodifiedforspecificbusinessusesbutalsoindividualusers.Buyerscancustomizetheuserinterface(UI)tochangethelookandfeeloftheprogram,aswellasmodifyspecificareas,suchasdatafields,toalterwhatdataappears.Severalbusinessprocessfeaturescanalsobeturnedoffandonatwill. Userscanoftentweaktheirownpersonalworkspace,suchasadashboardortasklist,toshowonlytheinformationtheyneedtoseeandoptimizetheiruniqueworkstyle. Manycloud-basedsystemsallowuserstocustomizeapersonaldashboardtoviewallassignedtasksatonce,asshownhereinAsana Todaybothon-premiseandSaaSsystemscanbecustomizedfromtoptobottomforeachclient,butcloudbasedsoftwarestilloffersfarmoreagilityandflexibilityfortheaveragecompany. 5.WhoownsmySaaSdata? Inthevastmajorityofcases,youstillownyourdatainacloud-basedsystem.Mostservicelevelagreements(SLAs)confirmyourcompany’sownershipofyourdatalocatedonthevendor’sservers,aswellasyourrighttoretrievethedata. MostSaaScontractsalsohavebuilt-inandprepaidcontingenciesthatwillprovideaccesstoyourdataifthevendorgoesoutofbusiness(seebelow)andguaranteesthatyouownthatdata. Furthermore,mostSaaSvendorswillletyouexportyourdataandbackituplocallyanytimeyouwant.It’sveryunusualforanyvendortoinsistthattheyretainownershipofyourdata.Ifyounoticethisinaclause,don’tsignthedottedline.ThisSLAisanimportantandfairlycomplexdocumentthatshouldbescrutinizedwithyourstakeholdersbeforecommittingtopurchasinganewsolution. Inadditiontodataownership,besuretocarefullyreviewtheseaspectsofaSLA: Responsibilitiesofthesoftwarevendorforsupport,updates,orsecurity Yourresponsibilitiesasaclienttonotifythevendorofissuesinatimelymanner Guaranteesforservice,suchaslevelofuptimeandhowacustomercanrespondtopoorservice 6.Ismydatasafeinthecloud? Softwareprovidersknowclientsarewaryofcloudsecurityandworkhardtoprovehowsafedataisintheirservers.ManySaaSprovidersutilizehighlysecurepubliccloudservicestodeployandstoretheirsoftwareinstancesanddata. Formostcompanies,dataisatmoreriskin-house,wherethere’slessbudgetdedicatedtoITsecurityandwhereemployeesorotherscouldunintentionallyleakdataorintroducegapsinsecurity.Infact,Gartnerpredictsthatthrough2023atleast99%ofcloudsecurityfailureswillbetheuser’sfault(fullcontentavailabletoGartnerclients). ThedebatearoundcloudsecurityforERPsystemsrageson,butitrepresentsoneofthelastsoftwaresegmentsthatexperiencessignificantsecurityfailures.Instead,carelessemployees,insufficientremoteworksecurity,andprogrammingbugsrankedamongthetopsecuritythreatsfacedbyU.S.businesses,accordingto90ITsecuritymanagerswhorespondedtoour2021DataSecuritySurvey. Top3securityvulnerabilitiesfacedbyU.S.businesses,accordingtoITsecuritymanagers Intruth,datasecurityisindependentofwhethertheserverissittingrightnexttoyouorinadifferentcity.SaaSvendorsareabletoinvestmuchmoreinsecurity,backups,andmaintenancethananysmalltomidsizeenterprise. 7.Whatifmyvendorgoesoutofbusiness? Softwarevendorscomeandgoallthetime—whetherthroughindustryconsolidationorbusinessfailure.Thedata,however,istypicallyyourstokeep. MostSaaSvendorsprepaytheirdatacenterhostingcompanyto“keepthelightson.”ThisprepaidfeeismeanttosafeguardcompaniestoensuretheirdataisaccessibleintheeventsomethingshouldhappenwiththeSaaSvendor. Lookforafewthingsaboutthevendorsonyourshortlist: HowlonghastheSaaScompanybeeninbusiness? Aretheygrowingincustomersand/oremployees? Dotheyhaveatechnologyroadmap? TheimportantthinghereistomakesureyourSLAhasaclausethatexplicitlystatesthatyoucanexportyourdatafromyourserviceprovider,whichisstandardtoday.Thisclauseshouldalsoincludehowoftenandinwhatformatyoumayaccessyourdata.It’scommonforSLAstoalsostipulatethatthevendorwillhelpmigrateyourdataforanappropriatefee. 8.Whataretheinternetandoperatingsystem(OS)limitations? TheprimarydownsideofSaaSisthatitreliesonagoodinternetconnection.Butunlessyourbusinessresidesinaremotelocation,yourconnectionwillbemorethansufficienttoutilizetoday’sSaaSsystems. Whilemanybelieveon-premisesystemstobemorereliable,nosystemisfullyimmunetodowntime.On-premisesoftwareissubjecttoelectricaloutages,hardwarefailures,andarangeofotherrisks.Asasafeguard,someSaaSvendorshavedeveloped“offline”functionalitythatallowspeopletokeepworkingintheeventthattheinternetdoesgodown.Onceasolidconnectionisavailableagain,allthedataissyncedtothesystem. Beyondtheinternetconnection,somebuyersworryaboutcompatibilitywithdifferentoperatingsystems.It’sunlikelyyou’llneedtoconsiderOScompatibility—mostaredeliveredviawebbrowsersandarefullyOSagnostic.Atthemost,youmayneedtodownloadadifferentwebbrowserthatwillworkbestforyourSaaSsystem. 9.SaaSversuscloud:What’sthebigdifference? Thecloudreferstoasetofincrediblycomplexinfrastructuretechnologies.Atafundamentallevel,it’sacollectionofcomputers,servers,anddatabasesthatareconnectedtogetherinawaythatuserscanleaseaccesstosharetheircombinedpower.Thecomputingpowerisscalablesothatbuyerscandynamicallyincreaseordecreasetheamountofcomputingpowertheylease. Workfront,aSaaS-onlyworkmanagementtool,allowsuserstocollaboratewithanywebbrowser Thecloudcanrefertoanythingthat’shostedremotelyanddeliveredviatheinternet.Whileallcloudprogramsarerunbyunderlyingsoftware,SaaSrefersspecificallytobusinesssoftwareapplicationsthataredeliveredviathecloud. Giventhewidespreadgrowthofcloudaccessibility,it’seasier,faster,andlessexpensiveforSaaSdeveloperstorolloutapplicationsascomparedtotraditionalsoftwaredevelopment.Today,nearlyeverytypeofcorebusinessfunction—fromhumanresourcestoenterpriseresourceplanning—isavailableviaSaaSproviders. 10.Whatisaprivatecloud? Aprivatecloudtakesalloftheinfrastructuretechnologythatrunsapubliccloudandstoresiton-premise.Usersachievethesamefunctionalityandabilitytoaccesstheirdatathroughawebbrowser.However,insteadofsharingthecomputingpowerwiththegeneralpublic,thecomputingpowerissharedamongusersatonecompany. Contrarytothequicklygrowingpubliccloudmodel(fullcontentavailabletoGartnerclients),aprivatecloudrequiresanITdepartmenttoperformmaintenanceandupkeep.Establishingyourownprivatecloudcanbecostlyandrequiresaninvestmentintheinfrastructurerequiredtodevelopandmaintainacloudenvironment. Privatecloudsalsorequirelargeorcomplexprojectstogenerateareturnoninvestment.Forlargeenterprisesthatdon’twanttoputtheirinformationinapubliclyaccessedcloud,itisanattractiveoption. Readyforthecloud?Here’showtogetstarted Youcanmakesureyourbusinessisreadyforcloudmigrationbyreviewingthesefrequentlyaskedquestionswithimportantstakeholders.Ifeveryoneunderstandshowthetechnologyworks,youcanthendeterminethemosteffectivetypeofdeploymentforyourspecificneeds. Herearesomeotherresourcesthatwillbehelpfulinyoursoftwareadoptionjourney: SaveMoneyonSoftwareWithThesePurchaseSecrets CloudERPvs.On-PremiseERP TheUltimateSoftwareVendorEvaluationGuide ShouldYouBuildorBuySoftware? Ormaybeyou’dpreferahelpinghand—youcanchatwithoneoneofourknowledgeableadvisorstogetafreeshortlistofproductsthatbestfityourneeds.Orsetupanappointmentforafreephoneconsultationwhenitworksbestforyou. Methodology SoftwareAdvice2021DataSecuritySurvey SoftwareAdvice’s2021DataSecuritySurveywasconductedfromAugust20toAugust24among973respondentstolearnmoreaboutdatasecurityatU.S.businesses.Respondentswerescreenedforfull-timeemploymentand90identifiedastheirorganization’sITsecuritymanager. Note:Theapplicationsselectedinthisarticleareexamplestoshowafeatureincontextandarenotintendedasendorsementsorrecommendations.Theyhavebeenobtainedfromsourcesbelievedtobereliableatthetimeofpublication. Learnmoreaboutthesoftwarebuyingprocess ReadNow Youmayalsolike: TheUltimateSoftwareVendorEvaluationGuideSaveMoneyonSoftwareWithThesePurchaseSecretsCloudERPvs.On-PremiseERP Youmayalsolike: TheUltimateSoftwareVendorEvaluationGuide SaveMoneyonSoftwareWithThesePurchaseSecrets CloudERPvs.On-PremiseERP Learnmoreaboutthesoftwarebuyingprocess ReadNow AboutUs Careers ForVendors Research&Articles AllCategories AboutUs Careers ForVendors Research&Articles AllCategories     ©2006-2022SoftwareAdvice,Inc.  TermsPrivacyPolicyCommunityGuidelinesGeneralVendorTermsGDMContentPolicyGDMContentPolicyFAQs ShareThis Facebook LinkedIn Twitter