SaaS stands for software as a service and some also like to call it “software on demand”. It is the method of providing software applications over the Internet for a small monthly fee. SaaS makes even the most advanced software and business applications available to small and mid-sized businesses. Companies all over the world are reported to have reduced their software applications cost by as much as 80% after making a switch to the SaaS model.
How does this become possible?
As mentioned above software applications under this category are accessed and used over the Internet. You don’t need to purchase a license fee and install the software copy locally. You just need a contemporary browser and you’re ready to go. You don’t need high-configuration hardware and you don’t need IT professionals to take care of your hardware/software infrastructure. You don’t even have to purchase multiple licenses if you want 50 employees to use the application.
All you need to do is contact the company that provides solutions based on the SaaS model, subscribe for the services you would like to utilize, pay for them, log into your account, and start using the application — it is as simple as that. Can you ever imagine implementing, let us say, a payroll system or an inventory management system with such an ease? You can literally decide to act upon your IT requirements and have the system running in as little as 30 minutes.
When your running your business applications in-house there are many one-time as well as recurring costs such as
- License fee for the copies of the software you use
- Compatible hardware for the software
- Ongoing maintenance of software and hardware
- Regular backups
- Security measures
- Personnel to take care of your IT infrastructure
- The space that you require for your IT infrastructure
- The power that you use to run your hardware
- Routine upgrades
All these costs are immediately eliminated the moment you decide to adopt the SaaS model for your business. Even laptops and computers with no hard drives can manage large scale enterprise level database applications as easily as checking your e-mail. All you need is an Internet connection and a contemporary browser.
SaaS provides you just those software modules that you need. The problem with conventional way of getting softer is that you get hundreds of features that you may never use particularly for your business but you are nonetheless paying for them because they are a part of the package after all. With the SaaS way of using applications you can scale up or scale down according to your individual needs and you can do that at any time. Suppose in a typical business application there are 40 commonly used functions and you require only 15. You can just subscribe to those 15 functions/modules and avoid paying money for the remaining 25. Similarly, at any time you can decide that instead of 40, only 10 employees need to use the application and then pay your monthly subscription fee accordingly.
With SaaS you are never stuck with the package you initially bought. It is totally flexible and customizable and it provides you all the features you need to run a successful business no matter what is its size.