Computer software for business

Software as a Service, also known as SaaS or on-demand software, is a way of delivering software applications over the internet. SaaS offers many benefits for businesses, mainly in terms of costs and flexibility. However, disadvantages of SaaS, such as lack of control, are considerable and should not be ignored.

What is Software as a Service (SaaS) and how does it work?

SaaS is a software delivery model where applications are:

• licensed on a subscription basis - usually monthly or annually
• hosted in the cloud - meaning the software is stored and managed online
• accessed via a browser over an internet connection

SaaS is an alternative to traditional on-premise software installations and is commonly used for:

• office and communication software
• payroll and accounting programs
• customer relationship management systems
• HR management software
• enterprise resource planning programs
• corporate performance management tools
• mobile applications

Advantages of SaaS

SaaS offers several benefits compared to traditional software models:

Lower up-front cost

SaaS is usually subscription-based and has no upfront licence fees, lowering initial costs. The provider manages the IT infrastructure, which reduces hardware and maintenance expenses.

Quick set up and deployment

SaaS application is already installed and configured in the cloud. This minimises common delays resulting from often lengthy traditional software deployment.

Easy upgrades

Providers handle hardware, software and security updates, so you don’t have to worry about managing upgrades.

Accessibility

You can access SaaS applications from any device with a browser and an internet connection, making it more convenient than traditional software.

Scalability

SaaS providers typically offer flexible subscription options, allowing you to adjust your subscription plan or number of users as your business needs change, without having to change hardware.

Disadvantages of SaaS

Despite its advantages, SaaS model also has some downsides:

Lack of control

With SaaS, control of the software lies with the provider. You may have to use the latest version without the option to defer upgrades or changes.

Security and data concerns

Managing access and protecting sensitive information is a major consideration around cloud and hosted services.

Limited range of applications

While SaaS is becoming more popular, there are still many applications that don't offer a hosted platform.

Connectivity requirement

Since SaaS model relies on internet access, a service outage can mean losing access to your software or data.

Performance

SaaS may sometimes run slower than on-premise software since it's hosted online, rather than your local machine.

For more information, see Software as a Service.