Business, Small business, Technology

Getting to Know: Software-as-a-Service

Thinking about incorporating cloud computing into your business? It has a few variations, but Software-as-a-Service, or SaaS, has been the most popular of the three available options. It’s known for its ease and accessibility, and, according to Gartner, an information technology think tank, it’s expected to rake in more than $10 billion in revenue this year.

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Businesses can access applications, such as Quickbook and Oracle whenever they want, wherever they want using SaaS. They can do this on a pay-as-they-go subscription typically for a monthly fee. Providers deliver and manage the software applications that are accessed over the Internet.

SaaS allows a company to get more and pay less. It has a speedy implementation and its accessibility can help broaden the workforce. It reduces cost savings by limiting the need for specialized equipment, costly software, onsite data centers and servers. It also allows businesses to pay for what’s used with the option of cancelling the subscription.

Many companies, however, have worried about SaaS security risks, the availability of the service and the vendors’ size and maturity.

These concerns are easing, Sharon Mertz, research director at Gartner, indicated in a news release. “Initial concerns about security, response time and service availability have diminished for many organizations as SaaS business and computing models have matured and adoption has become more widespread. Usage and vendors’ on-demand ecosystems continue to evolve to provide additional business and technology services, more-vertical-specific functionality, and stronger communities of partners and buyers.”

Global companies have taken advantage of SaaS to help reduce complex tasks, such as accounting. However, small and midsized companies are adopting cloud computing more quickly, according to Compliance Week, a newsletter that provides information on corporate governance, risk and compliance. These companies don’t have a large IT infrastructure or the same security concerns as large companies.

Prior to 2000 organizations purchased copies of applications and installed them onto computers paying annual maintenance fees. Vendors wanted to reduce costs, hardware and maintenance issues, so in the past decade they came up with the idea of hosting applications and letting the companies access the software online. As SaaS took off, with the help of faster Internet connection speeds, it drew attention for fast implementations, low upfront costs and limited technology issues.

Now the use of SaaS, the way it’s sold and its perception have changed. “SaaS deployments are larger,” Gartner said. Also, social media and social software, such as Facebook and Twitter, are incorporating more SaaS solutions; and some businesses are encountering issues and challenges because more of them are using an assortment of SaaS applications from various vendors that were acquired or set up without help from IT.

Businesses can anticipate new SaaS-based product offerings. Cloud-hosted “big-data” analytics, e-discovery and the hosting of individual desktop systems are a few uncharted areas for SaaS eWeek cited.

However, use caution with suppliers that indicate they are “in the cloud.” Many are rebranding their hosting or application management or outsourcing capabilities as SaaS and this can cause confusion, Mertz claimed. “Hosting and application management are not synonymous with SaaS, nor do they necessarily comply with the definition of cloud computing,” she explained.

SaaS is a version of cloud computing known for its quick implementation. It can help expand a business and alleviate IT frustrations, and although security concerns still exist, vendors are at work fixing those issues and enhancing the system.

Photo credit: krishnan / (

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