Definition and Purpose

Software as a Service ("SaaS") is a cloud computing model in which software is provided and used over the internet. In return, this eliminates the need for user owned local servers or computers that must have software manually installed and maintained.

In the SaaS model, software is hosted and managed by a third party provider. Thus, it is typical that users pay a subscription fee instead of a one time purchase fee. Although the user does not own the software, they are also relieved of the burden of software management and troubleshooting. Overall, this has led to substantial growth for SaaS software, according to an article by Harvard Business Review.

Read some of the benefits and drawbacks of the SaaS model below:

Benefits of SaaS

• Rapid Deployment - Organizations can allow users to quickly use the software because of the minimal setup without the need for installation processes.
• Maintenance - The responsibility of updating and maintaining the software is left to the service provider, ensuring the latest features.
• Scalability - SaaS programs often advertise multiple solutions, allowing organizations to choose and adjust their solutions based on their needs.
• Accessibility - Because software is run on a third-party computer, the minimum requirements for the user are very low. This means that any compatible device with an internet connection can use the software.
  • This also enables remote work and collaboration within the organization.

Drawbacks of SaaS

• Dependency on a Third Party - It is most important to note that the user or organization does not own the software that they are paying for. As a result, there must be a high level of trust given to the service provider to only introduce changes to the software or subscription plan that are beneficial to the user.
• Dependency on Internet - SaaS software requires that the user have a stable internet connection, or else it can seriously impact performance and user experience.
• Long Term Cost - While SaaS programs offer lower upfront costs, recurring subscriptions fees may mean that in the future the total cost of subscription payments can cost more than the software license itself.
• Privacy Concerns - SaaS programs store user data on the provider's infrastructure, which may raise concerns about the privacy of this data. This is especially important for sensitive or confidential information.