Getting to Know technology: Software as a Service

Thanks to the public cloud, which has amassed around $150 billion in annual revenues, the software as a service model has grown tremendously. In fact, it’s grown by approximately 20 percent a year for the past five years. The public cloud currently houses over a third of all applications used worldwide, making it a significant contributor to the success of software as a service (SaaS). Has your organization begun to take advantage of this phenomenon?

What is SaaS?
SaaS is a software that is accessed through the Internet. This is often provided through a service provider, a developer of the software or a third party authorized to sell or distribute it under certain conditions. The user can use the software as indicated in the service level agreement for a monthly fee. The cloud provider is responsible for hosting, management, maintenance, development, and security of the application, making it both an attractive and hands-off approach for businesses.

The Benefits of SaaS
A change from on-premise software hosting delivers three distinct benefits for your business. They are the following:

• Eliminating hardware costs: Since you pay the developer per month for the use of their software, you don’t have to host the hardware on your infrastructure at all. This frees up a lot of extra capital that could be better spent elsewhere.
• Eliminating management costs: Businesses don’t have to manage or maintain the system, making for a significant cost reduction.
• Enabling remote accessibility: Any device can access a SaaS application through the Internet, allowing for access anywhere with available bandwidth.

Issues with SaaS
Nothing is perfect, even though it seems SaaS provides perhaps the biggest edge you can think of for a software solution. Some organizations must adhere to compliance regulations, which can in-turn affect cloud-based deployment of specific data or functionality. Since most cloud-based SaaS offerings are deployed through the public cloud, users’ applications are accessed using shared resources, which might rub some organizations the wrong way. Here are some of the major problems created by SaaS:

• Potential downtime: Any solution hosted in an online environment runs the risk of downtime. Since downtime is so expensive, you need to monitor how much downtime your organization actually suffers from when using SaaS to make sure it’s actually turning a profit for you rather than becoming a cost.
• Cost: If you’re paying a developer for monthly access to a web-based service, there’s a good chance that it will ultimately cost your business more in the long run than buying it outright. While there is a big benefit to smaller monthly payments compared to purchasing the license, when you’re considering multiple subscriptions to services, it can quickly grow overwhelming.
• Data security: Since your organization doesn’t play a role in hosting cloud services, you’ll never know just how secure your data actually is. This might make you question how reliable these services actually are.

Overall, software as a service can be a great value for your organization… if it’s managed properly. If the public cloud scares you, there is always the option to work with a third-party MSP who can host your services privately on their own server. Directive can help you with this. To learn more, reach out to us at 607.433.2200.