Software as a Service

SaaS

Purchasing, updating and maintaining up-to-date software can tie up valuable resources in companies. In order to save these resources, both large and small companies have long been relying on cloud-based SaaS solutions from various Software as a Service providers for many applications. 

In this article, we explain exactly how this form of provision works, what advantages it offers and what needs to be considered when integrating it into your own business processes.

In a Nutshell

  • With SaaS, applications are provided via cloud services
  • The services are usually billed on a subscription basis
  • Companies save costs for the purchase and maintenance of software
  • Simple scalability is a major strength of these services
  • Important trends in the SaaS field will be AI & machine learning

What is SaaS (Software as a Service)?

Software as a Service (SaaS for short) enables the use of an application that is provided via cloud computing. It is provided by the software provider and end users access these applications via the internet. Hosting means that no local installation is required for use, and maintenance is also eliminated.

This cloud-based provision model is now used by many companies of all sizes as well as by private end users. Well-known examples include MS Office 365 from Microsoft, file-sharing services such as Dropbox and CRM solutions such as Salesforce. Further variations of this concept include Infrastructure as a Service (IaaS) or Platform as a Service (PaaS).

Further Cloud Models: IaaS & PaaS

Infrastructure as a Service (IaaS)

Companies can use IaaS to access basic IT infrastructure such as servers, storage space and network capacity. These resources can then be used for their own applications as required. This type of model is particularly suitable for companies that require full control over their infrastructure without wanting to operate their own (physical) hardware.

 

Platform as a Service (PaaS)

PaaS is a model that is primarily aimed at application developers who can create, test and provide software in this environment. Typical components are runtime environments, databases and development tools. PaaS facilitates software development and therefore generally accelerates the development process as a whole.

How does Software as a Service Work?

In the SaaS delivery model, software providers host their applications on cloud servers. Private and commercial users have to pay a fee to access these applications. It is now very common for access to be provided as part of a subscription, usually on a flat-rate or usage-based basis, for example according to the scope of a software's functions.

A high-performance and multi-client-capable IT architecture on the part of the provider allows authorized users to access and use the software hosted by the provider once their user account has been successfully set up. Use is generally device-independent, as all computing processes are carried out by the SaaS provider.

In theory, companies can use as many Software as a Service solutions as they like, with the relevance of individual applications for the company workflow depending on the company and industry. Numerous providers also offer individual service level agreements (SLAs) for customers with special requirements.

Characteristics of SaaS

What are the characteristics of standard Software as a Service offerings on the market? We have summarized the most important features of such solutions here:

  • Provision via cloud without local installation
  • Use as a subscription service as required
  • High scalability according to type and scope of use
  • Easy access from anywhere, provided an internet connection is available
  • Automatic updates by the respective providers
  • Quickly ready for use without time-consuming setup 
  • Plannable costs through booking and billing as required

The SaaS model is often ideal for companies that want to use certain applications quickly, flexibly and at predictable conditions. In many cases, the flexibility of the model is also used to test various software solutions without having to purchase the corresponding licenses on a large scale.

Advantages of Software as a Service (SaaS) Models

The most important features of SaaS solutions are also the most important advantages of this model. In this section, we therefore take a closer look at the individual strengths and their significance for companies.

Predictable Costs

Where companies previously had to make considerable investments to create their own infrastructure on site (servers etc.) and to acquire the appropriate licenses, the SaaS model simplifies all these business decisions. 

Expensive investments with an uncertain ROI are no longer necessary with Software as a Service solutions - instead, a clearly plannable number of users use an application at fixed monthly/annual costs that can be calculated.

Flexible Access

As SaaS solutions are cloud-based, they can be used from anywhere and with almost any internet-enabled device. This makes it easier for employees and companies to implement flexible working time models - they can work in the office, from home or on the move. This is a decisive advantage, especially for international companies and employees who have to be very mobile in their jobs.

Quick Setup

SaaS models can be implemented within a few hours or days, as no time-consuming installation or configuration processes are required. Employees of a company or the respective users log in, create an account and can use the software immediately. 

This speed of implementation in their own business processes enables companies to react to new requirements or market changes at very short notice. At the same time, it allows errors to be corrected easily if the respective application does not meet the requirements.

Simple Scalability

As companies' requirements grow, suitable SaaS solutions simply grow with them. Additional licenses or capacities can usually be easily added. This is often of particular interest to both established large corporations and up-and-coming start-ups.

Additional resources are usually available within a short period of time - the purchase of expensive server hardware is no longer necessary and is therefore no longer a limiting factor for growth. Existing structures are simply virtualized as part of a cloud migration.

Automatic Updates

In addition to the direct costs for hardware, licenses or upgrades, Software as a Service models can also reduce administrative expenses.This is because the responsibility for updating software versions lies with the SaaS provider. 

All updates and maintenance work are carried out automatically without companies having to worry about it. This not only saves time and resources, but also reduces the risk of potential security gaps due to outdated software. 

SaaS vs. On-Premise Solution - Important Differences

For the sake of simplicity, many companies choose to obtain SaaS applications of all kinds from external providers using cloud computing. An alternative to this is to provide the desired services via a company's own cloud instead of via SaaS providers. However, this alternative form of provision poses a number of challenges compared to traditional Software as a Service solutions.

Provision and Configuration

SaaS

The software is hosted in the cloud and provided via the internet. Users access it as required via browsers or apps.

On Premise

The software is installed and operated directly on a company's servers and computers. The company takes care of maintenance and administration.

Infrastructure and Hardware

SaaS

As the SaaS provider provides the entire IT infrastructure, end users and company employees only need suitable end devices to access applications and data.

On Premise

Companies need their own servers, network technology and storage solutions. The hardware must be purchased, operated and continuously maintained.

Costs of Use

SaaS

As a rule, use is subscription-based (monthly/annual fees). These easily plannable costs cover the expenses for use, maintenance, updates and support on the part of the Software as a Service provider.

On Premise

Depending on how many employees are to use certain applications, one-off license costs are incurred. There are also ongoing costs for maintenance, updates and possibly additional IT staff to look after the hardware.

Maintenance & Updates

SaaS

The provider of the respective service takes care of updates, patches and maintenance. Users of the respective application therefore always have access to the latest available version.

On Premise

Updates and maintenance must be carried out internally. Companies decide for themselves when and whether to implement updates for certain software solutions.

Scalability of the Software

SaaS

Most SaaS applications are very flexible and easily scalable. Users and companies alike can expand or reduce resources (e.g. user licenses or storage) as required.

On Premise

If companies want to scale their own cloud solutions, this may require the additional purchase of server hardware and other equipment. This is usually associated with considerable investment costs.

Data Security

SaaS

Data is stored in the cloud, which offers advantages in terms of reliability. However, security is heavily dependent on the provider.

On Premise

Data remains locally in the company, which enables complete control. This explicitly high level of control can be very important for companies in selected industries.

 

In a direct comparison, it becomes clear that purchasing ready-made SaaS solutions from well-known providers involves significantly less effort than setting up a company's own cloud for software services - both financially and administratively.

For this reason, we also offer our GFOS software as an SaaS model for our customers. Please contact us for more information about our GFOS knownCloud and our services.

How SaaS is Shaping and Changing the IT Infrastructure

The steadily growing importance of the Software as a Service model - as well as IaaS and PaaS - now offers companies considerably more freedom when deciding how they want to design their own IT infrastructure today and in the future. 

In addition to pure on-premise or cloud approaches, companies have the option of integrating practically any type of application as a pure service into or onto their own systems - at a reasonable cost, without specialized hardware and with minimal lead time.

The Future of the SaaS Model

Software as a Service solutions are now increasingly integrating machine learning models and AI functionalities. This expands both the core functions of the original application and the overall adaptability of the software. 

Thanks to greater networking and more intensive integration of customer-specific data, customer- and industry-specific SaaS solutions can be developed in the future, which companies can then use themselves for highly specific purposes. 

This level of customizability will be particularly relevant for large companies, some of which have very granular application scenarios. In the future, these can also be automated to a large extent with the help of such intelligent Software as a Service solutions, which in turn means additional efficiency gains.

Call us at

+49 . 201 • 61 30 00

Contact us at

To the contact form

Call us at

DE: +49 . 201 • 61 30 00

CH: +41 . 41 • 544 66 00

Contact us at

To the contact form

Back to top