Software as a service (SaaS) offers a different approach to installing and maintaining software.
Instead of relying on standalone installations, it takes a centralized approach using the internet and a web browser as the user interface. The program and its data reside in the cloud instead of an on-site server.
SaaS has moved into several applications, such as payroll and customer relationship management (CRM). Instead of a one-time cost, SaaS uses a subscription fee model to support its continued development and expansion.
SaaS solutions can be horizontal or vertical. Horizontal solutions are used by a wide range of industries because they address the business needs of more than one customer. CRMs and project management platforms are good examples of horizontal SaaS solutions.
Vertical SaaS solutions are industry specific. These products fulfill specific niches, such as electronic health record software or tracking programs for the delivery industry.
SaaS continues to evolve. For example, platform as a service solutions recognize the need for not just one, but several applications for an enterprise. Infrastructure as a service offers pay-as-you-go solutions to fit the needs of various industries.
SaaS has developed to include mobile applications and collaboration efforts. It is a $145.5 billion industry with no end of growth in sight. It has successfully changed the landscape of personal and business software, providing 70% of their software needs.
Brief history of software as a service
The traditional approach to computer software was the client-service model. Customers paid upfront for the software that was installed on a server and delivered to thin clients — computers that store resources on a centralized server versus a hard drive and connect to other systems via the cloud. It was an ideal solution for enterprises and became the new normal for application service providers. FutureLink Corporation and USI took over the reins from early pioneers of this technology, such as IBM.
As the internet grew and developed, the limitations of application service providers became apparent. It was labor-intensive to install the software on servers and thin clients, especially for enterprise solutions.
How SaaS applications work
The software delivery model of SaaS applications expands on the architecture of traditional software by using cloud computing as its engine. Instead of running software installed on an on-premises computer, users access it through a web browser with an internet connection. This removes the compatibility issue of different operating systems.
SaaS applications maintain the programs and house the data on the provider’s servers. Multiple users can access the application, whether they’re running Microsoft Office, a CRM like Salesforce, or a communication platform such as Slack.
Basics of SaaS architecture
The SaaS model is effective because of its ability to meld with different solutions and fill the needs of various industries. With its multi-tenant architecture, a single hub controls its network of tenants or users and manages the software at one point. That increases its efficiency, security, and usability.
Many businesses face similar challenges and require software for the same tasks, such as payroll and human resources. That’s where the horizontal scaling possible with SaaS applications comes into play. These platforms offer solutions that can fulfill these needs, regardless of the industry. Customization options make them pertinent and relevant.
On the other hand, many industries have specific needs and security challenges, such as health care, hospitality, and education. Vertical scaling addresses the requirements that these organizations may have that don’t pertain to others.
Advantages of SaaS versus on-premise solutions
SaaS applications offer many advantages over traditional software. Perhaps its greatest benefits are its customization and accessibility options. A service provider can create a bespoke user interface that matches the needs of the client. It can also manage security often at a higher level than organizations can, particularly those without dedicated IT departments.
Security
Consider these cybersecurity facts: Over half of businesses allow all employees access to over 1,000 sensitive documents. Compounding the threat is that nearly 40% of staff have nonexpiring passwords. SaaS applications can manage these situations better by updating access and privileges to reduce these cybersecurity threats.
That’s great for small business owners without the funds or resources to take these essential steps.
Updating is also essential for protecting sensitive data from security breaches. Performing these tasks with traditional software is tedious and labor-intensive. SaaS providers can handle patches and update with new features more frequently and seamlessly to keep networks safer against potential threats. Failure to keep their software current was the cause for about 60% of cyberattacks in 2019.
SaaS applications can manage these tasks through a central system with nothing required of the end user.
Accessibility
SaaS applications make vital enterprise software accessible on both Macs and PCs as long as the user has an internet connection. Going through a web browser makes the application available to anyone with the necessary permissions. There’s no additional software to install.
SaaS solutions can customize an application to fit the access needs of their clients to manage the workflow more efficiently.
Software as a service providers offer another feature that most traditional software can’t: They can aggregate the user data to identify bottlenecks in any business application and find ways to streamline the process. For example, if database forms are collecting redundant data, redesigning the user interface can remove this step for optimal efficiency and better workflow management.
SaaS software evolves quicker with the changing needs of an organization.
Cost savings
Most SaaS vendors use a subscription pricing model. Because the applications are web-based, there is no need for costly hardware purchases. The upfront costs for small businesses and freelancers are reduced dramatically, making SaaS solutions more affordable. Subscription pricing also allows these organizations and individuals access to more robust cloud applications customized for their needs.
The flexibility and scalability of SaaS applications is another major selling point because they can grow and evolve with the organization. That feature alone offers a significant advantage for startups by providing lower upfront costs. It also allows for accelerated feature delivery to match their changing needs and better enterprise resource planning.
SaaS solutions can also save companies time and money with collaboration tools that can increase productivity and facilitate communication. Project management can move quicker through the hierarchy of sign-offs and approvals.
The unseen cost savings come through added security with timely backups to prevent data loss in the aftermath of a cybersecurity breach. The price tag of these attacks is staggering, in a 2012 study, over 60% of small businesses failed within six months as a result. SaaS vendors can provide the IT support that 75% of these organizations don’t have.
Examples of SaaS applications
The capabilities of SaaS applications are limited only by the imagination and are endlessly customizable. You can see the benefits of cloud computing services in both horizontal and vertical SaaS offerings. Here are a few examples.
Streak as a complete business solution
Streak helps users create the perfect process for managing human resources, sales, and project management in one easy-to-use solution. Its strength rests with its customized pipelines that users can configure to manage their unique workflow and boost productivity. The interface integrates with Google Workspace, making it even more user-friendly.
Companies can create a branded user experience. Streak provides access through its Chrome extension and mobile access through both Android and iOS.
Many SaaS vendors use a freemium distribution model to offer these services to freelancers and small business owners. They typically limit the number of users and functionality for these no-cost or low-cost pricing plans.
Streak offers a freemium deal that is surprisingly robust. Individual users on the free plan can access the core CRM offerings. While Streak offers advanced functionality with team email sharing and shared pipelines, those features are limited to the paid plans.
Fast: a solution for cart abandonment
In the pandemic, we saw a dramatic rise in ecommerce. However, the age-old problem of lost sales through cart abandonment still exists. That’s where the SaaS application Fast comes to the rescue. Its goal is to create a user-friendly shopping experience with the simplest checkout, as complicated checkouts are one of the leading reasons users leave without hitting Buy Now.
Fast ticks off all the boxes when it comes to cart abandonment. It integrates one-click checkout into an ecommerce site to simplify the process. Buyers don’t have to create an account to purchase anything. They even provide a zero fraud guarantee that is sure to build trust and foster loyalty with customers. It’s an excellent example of SaaS managing cybersecurity.
Fast is free for buyers while sellers pay a competitive transaction fee. It integrates with both the BigCommerce and WooCommerce platforms, and stores can use the Fast API for custom storefronts. The SaaS vendor takes its mission to heart with an interface that makes it easy for new users to create an account and start selling.
Kraftful for the Internet of Things
Kraftful takes SaaS to the next level by capturing the explosion of Internet of Things (IoT) devices in the marketplace. Experts estimate the IoT industry’s growth will surge to 75 billion devices by 2025. This SaaS provider works with hardware companies to create smart device apps to increase their functionality and usability to drive sales.
Kraftful works with cloud services, iOS, and Android platforms to deliver a complete solution. They don’t stop with creating an app — they also focus on the user experience through analytics to help developers improve their products through interaction data. That service can allow companies to understand their users and lead the way toward improved products.
Kraftful also focuses on the back-end side of integrating with operating system updates to ensure a seamless and secure user experience. They offer no code solutions, which can help developers get their apps to market faster and save on upgrade costs.
GitBook: knowledge in one place
All organizations accumulate tons of documents over time. Unfortunately, many of these files are stale, and those stale files affect over 50% of businesses. That’s where an SaaS provider such as GitBook can help clear the clutter. The software provides a central hub for team members to collaborate. It’s a resource that anyone in the organization can access since it’s hosted in the cloud.
Many organizations struggle with lost files and the subsequent lost productivity. GitBook solves that problem by helping businesses create a central workspace that is easy to search with the ability to store different versions of files. Teams can create private or public spaces to store documents, and they can invite collaborators and set individual permissions for added security.
GitBook tackles a common problem and offers an affordable solution. The user interface requires no coding and supports markdown. Code snippets and shortcuts streamline the editing process. It also syncs with GitHub. In a nod to developers, GitBook offers a free plan for open-source projects, which they tout as free forever. The company also takes a page from sellers by not requiring a credit card.
Getaround keeps you moving
Getaround is a unique example of how SaaS technology is moving to make everyone’s life easier, even when it comes to getting a car. Unlike the other examples we’ve considered, this one is a mobile-based solution. The mobile app allows users to tap into a network of shared cars to get their ride when they need it and for how long they want it.
Getaround is also a car-sharing entrepreneur platform for individuals who have several vehicles to rent. It optimizes the user experience with 24/7 support, driver screening, and insurance coverage. It’s equally friendly for drivers with iOS and Android integration. Users can browse and select the type of vehicle they want from the pool of available rides.
Getaround has come a long way from its start in 2009 to become a global brand — and it’s environmentally friendly, too. Its model helps reduce greenhouse gas emissions by optimizing the shared vehicles’ use. Getaround identified a need and fulfilled it with a robust SaaS solution.
SaaS applications are everywhere
SaaS applications open a whole new world of opportunities for individuals and businesses alike. They allow developers and entrepreneurs to identify a need and offer solutions that can save time and money. They streamline ecommerce and put knowledge at the forefront.
Developers are just scratching the surface of the possibilities of what SaaS can do and the niches it can fill. That makes these SaaS applications more relevant in a changing world. It’s no wonder that experts forecast continued double-digit growth for the SaaS industry.
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