Software-as-a-Service: Concepts, Advantages & Disadvantages

Blog /cloud-series-part-6

In my last post I talked about the concepts, advantages and disadvantages of Infrastructure-as-a-Service (IaaS) as a cloud service model.  I promised that my next post would cover Software-as-a-Service or SaaS, which is perhaps the most commonly understood cloud technology. SaaS enables the user to use the provider’s commercially available applications running on a cloud infrastructure. Think: sales and marketing automation software from Salesforce.com. SaaS transforms software costs from a capital expenditure to an operating expenditure, eliminating the need to purchase software licenses, given its monthly fee.

SaaS applications are accessible from various client devices through a thin client interface (such as a Web browser) and increasingly through mobile applications. SaaS applications have a distributed architecture, so they remain available to end users when needed via the Web, even during an event that could have disrupted service to a non-SaaS application.

Small to mid-size enterprises typically use SaaS products for commercial software suites such as customer relationship management (CRM), enterprise resource planning (ERP), supply chain management (SCM), human capital management (HCM), IT service management (ITSM), and office productivity. SaaS enables enterprises to obtain the use of such commercially available software on demand in return for a monthly fee, typically based on the number of users. Validating the market for SaaS products is the rapid pace at which large enterprise companies and public sector agencies have been embracing SaaS offerings in recent years.

SaaS products can save costs in several ways. For example, rather than purchase expensive software, some of which remain idle at any given time, and depreciate the cost of the licenses over time, organizations can pay for the use of software on demand. Also, savings can come from the need for less hardware and, in some instances, in-house personnel because service, support, and upgrades are usually part of the agreement. Existing IT personnel can concentrate on other mission-critical areas. SaaS enhances both speed and flexibility since deploying software becomes instantaneous.

The biggest challenge associated with SaaS is that one problem can impact all users and that the enterprise is dependent on a third party. That means that the service provider is now a significant part of any disaster recovery plan and that a service disruption can cripple an organization in the delivery of its product or service. It is critical that companies carefully scrutinize a provider’s service levels. Moreover, the disruption or loss of service as a result of the provider may create legal liabilities for an organization.

Stay tuned for my next post where I will define Platform-as-a-Service (PaaS) and highlight it's advantages and disadvantages.

- Ryan Reed, Cloud Evangelist

Post Date: 10/30/2014

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