What is SaaS? - A Quick Rundown

So what is SaaS?

SaaS stands for Software as a service. It's a software distribution model where a 3rd party provider hosts and develops an application, and makes it available to customers over the Internet. This erases the need for companies to install and run applications on their own computers/servers/data centers. The expense of hardware purchases, setup and maintenance becomes void. You also don't have to mess with software licensing, installation or support for physical software. Sounds pretty great right? Let's go into more detail about how it benefits your business.

Pay-As-You-Go Pricing

Since you don't need to purchase software to install and you don't have to support hardware systems, you can subscribe to SaaS. You can transition your regular costs into a recurring, flat operating expense. This allows for more consistent budgeting for your accounting. Most SaaS can be terminated at any time which will immediately stop those recurring costs.

Modular Approach to Services

Most SaaS has a thorough set of integrations. These integrations provide features-on-demand with access to Ecommerce, Accounting, Shipping, Payments, Labeling, Inventory and more for retailers. The more you want access to, the more you pay for. Removing services reduces the overall monthly costs. It's an important decision to make regarding the addition or trimming of services, but with SaaS it is as easy as unsubscribing and disconnecting that API integration.

Consistency in the Cloud

No need to purchase new software when there are new versions. Updates/Patches/Releases are handled server-side and the client is usually unaware until the release notes are presented. There's no need for in-house IT to keep everything updated on every major release. This also increases accessibility because SaaS apps are delivered over the Internet. You don't have to wonder whether the software is going to work for PC vs Mac etc. Users can access it from any Internet device from any location.

Security is Key

Clients are relying on the SaaS provider to keep it up and running, track and report all billing as well as facilitating a secure environment. All business data needs to be secured via SSL & Encryption. You run into the possibility for service disruptions, unwanted changes to service offerings, the possibility for security breaches or other issues. This is why it has become increasingly important to read and understand a SaaS host's service-level agreement. Make sure your SaaS provider enforces it and has a strong security policy as well as data redundancy with good backups!

Old Dog; New Tricks

On-demand software via ASP or "Application Service Providers" isn't new. There have been services that will host an instance of a desktop software on a virtual machine that you can log into from any location with a VPN. SaaS gives you all of that without the need for any software or hardware crutch. Simply head to a URL, login and access your app. This has come with the onset of APIs or "application programming interfaces". An an open API allows companies to program additional software which can connect to your SaaS as an integration. An example of this would be using an inventory management SaaS such as Order Time inventory and having a custom API call or procedure for inputting commission payouts into a sales order. With the advent of REST API which literally provides a uniform structure to making apps for web services, integrations for SaaS have been popping up monthly. Soon all of these web services will be interconnected!

Why run your own multi-tier piece of software and sink all of your time into patching and maintaining it?

SaaS is here to provide a quick and efficient route towards an interconnected business ecosystem.

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