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Software as a service (SaaS)


What is SaaS?

The acronym SaaS stands for software as a service and is defined as a software licensing and delivery method in which software is accessed online, rather than installed in a device. In SaaS models all the software and applicable data are hosted on the provider’s servers, meaning the provider is responsible for managing the security, availability, updates and performance of the applications.

Software as a service is most typically offered on a subscription basis, which requires users to have a login name and password, as well as a valid monthly or annual payment plan. SaaS solutions may also be referred to as hosted software, on-demand software and web-based software.

Common examples of SaaS

SaaS applications are used for both personal and corporate purposes, and most people interact with some form of software as a service on a daily basis. From Google apps such as Gmail to Amazon Web Services, and Microsoft Office 365, these are all common examples of frequently used software applications. Netflix is another great example that hosts subscription based videos on-demand enabling users to watch content on any device with internet access. Many SaaS applications work on a freemium model which allows customers to test out the product for a free for a limited time before purchasing.

Types of SaaS

Today there are many SaaS options available across all industries, both in B2C and B2B models. It is also worth noting that many applications are cross-functional products, which can serve multiple purposes. Here are some of the most common types of SaaS applications:

  • Web hosting and eCommerce: Simply put, this type of SaaS allows both private and corporate users to build an online presence. This can be anything from a blog or a business website to a message board or an online store. In the case of eCommerce web hosting, websites are able to operate online stores with specialized features such as payment gateways, shopping carts and any other business needs in order to sell products online. Wix is an example of a cloud-based web hosting platform that enables users to create websites.

  • Customer relationship management (CRM): Customer relationship management applications enable businesses to organize and maintain interactions with current and potential customers. CRMs can help with a wide range of customer-oriented activities including sales, marketing, customer service and analytics. Some CRM SaaS examples include Salesforce, Salesmate and Zoho.

  • Human resources (HR): There are many aspects of human resources that go beyond hiring, such as compensation, training, development, health, and communication with employees and prospective candidates. BambooHR, Gusto and Skillsoft are all examples of HR software as a service.

  • Communication and collaboration: Communicating and sharing projects has become much easier with things like instant messaging, file sharing, and collaborative platforms. This is especially important as more people are working remotely or from home. An excellent example of both a collaborative and communicative SaaS is Slack.

  • Project management: Business across all industries are using SaaS solutions to manage their projects, thus streamlining processes and making it much clearer and efficient for teams. Things like scheduling, file sharing, reporting, communicating, task management and visual mapping are all parts of this type of software. Examples of project management SaaS include, Asana, Jira and Trello.

  • Enterprise resource planning (ERP): This type of SaaS is used in industries such as healthcare, manufacturing, construction and hospitality, and serves to centralize and automate back office processes within an organization. Specific business functions such as sales, accounting, production and procurement can all be managed from one place. Some ERP SaaS examples include NetSuite and Sage.

  • Digital signature services (DSS): Digital signature services are an essential part of online business with paperwork such as contracts and invoices. DSS software enables secure document signing for diverse purposes for both personal and professional use. Some examples include DocuSign and HelloSign.

  • Payment Solutions: In the world of online shopping, safe and secure payment solutions are a vital part of the process. SaaS applications include things like accepting payments via credit cards, bank transfers, recurring payments, coupons and rewards. Examples of SaaS payment solutions include Venmo and Swipe.

  • Data Storage: SaaS applications for data storage can help store and share large documents, files, and images. Products like Dropbox, Google Drive and iCloud are all examples of data storage SaaS products.

  • Accounting: SaaS accounting has drastically changed the way small and large businesses can operate by empowering them to manage finances in a new way. For example, cloud-based accounting software enables small businesses to be more hands on with their finances, often eliminating the need for an accountant. Examples of accounting SaaS include QuickBooks and FreshBooks which can pay bills, manage accounting books, send out invoices, and complete payroll.


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The advantages of SaaS

  • Increased accessibility: Since the software does not need to be installed or downloaded, SaaS can be accessed from any device and any location, as long as there is internet connection.

  • Automatic updates: In terms of efficiency, there is no need for users to worry about updating software which can be time-consuming and costly. While software owners still need to be concerned with running updates, SaaS allows for automatic updates which streamlines the process and means the most up-to-date software version is used, improving overall service.

  • Reliability and security: Because SaaS applications operate in the cloud, they have a better and more consistent uptime. Also, since they are hosted in data centers, they often have IT personnel monitoring their performance and protecting them.

  • Cost-effective: Using software as a service eliminates upfront licensing fees, as well as the need for paid upgrades or maintenance. Since SaaS is used on a subscription basis, this can remove large expenses (such as dedicated hardware), and make it more beneficial for individuals and small businesses.

The disadvantages of SaaS

  • Decreased accessibility: In the same way it is advantageous, using SaaS apps can actually have a negative impact on accessibility. In case of a bad internet connection or no access at all, applications are no longer functional.

  • Security: Similarly, security can become an issue since applications are used on personal devices and may use unprotected Wi-Fi to connect. This can lead to privacy issues of sensitive information.

  • Data breaches: Since all information is stored on the cloud, there can be data breaches of personal information. For example, users may be vulnerable to cyberattacks or privacy violations.

  • Functionality and performance: Due to the fact that SaaS applications operate in the cloud, there can be slower speeds and performance issues on individual devices.

How to get started with SaaS

To get started with SaaS, you'll need to choose a SaaS provider and sign up for a subscription. After you've signed up, you'll be able to access the software through a web browser or a mobile app.

Here are a few tips to keep in mind when choosing an SaaS provider:

  • Make sure to choose a provider that offers the features and functionality that you need. What works for another company, might not work with you. Be sure to check what it does and how, and ask questions if need be before deciding.

  • Read reviews from other users to get an idea of the pros and cons of each provider. Make sure the reviewer has actually used the product they're reviewing.

  • Compare prices from different providers to find the best deal. Always aim to go for the best your budget can afford.

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