Although SaaS is a very popular term, many people still don’t fully understand it. Regardless, we use these software solutions daily.

So, here’s an in-depth guide to this blossoming technology. By the end of this article, you should have a comprehensive understanding of SaaS and how it works.

TL; DR

• Software as a Service (SaaS) is a software delivery model that involves an application being offered as a product over the Internet for a subscription fee.
• SaaS differs from conventional software in many ways. For one, you don’t have to download SaaS applications or worry about the computing power needed to run them. Also, you can use them on any device you choose as long as you have your password and an internet connection.
• There are several types of SaaS applications; they can either be designed for businesses, e.g., Hubspot, or for individual use, e.g., Spotify. However, some SaaS products, like Google Workspace, can be used by both businesses and individuals.
• SaaS providers utilize various security measures, such as encryption and access control, to safeguard data. Additionally, they adhere to several data regulations to keep sensitive information secure.
• One of the advantages of SaaS, aside from cost-saving, accessibility, and scalability, is that it can integrate with other existing software applications you use through APIs — protocols that let software programs communicate.
• However, SaaS has some drawbacks, such as the occasional data breaches and vendor lock-ins, making migrating from one SaaS provider to another difficult.
• To choose a software provider, you have to consider many factors, in particular, functionality, pricing, and scalability, among other things.

What is SaaS?

SaaS, an acronym for Software as a Service, is a model that involves delivering applications as products over the internet. It’s quite similar to internet-enabled services such as email or social media, although different. Some examples of SaaS products include Slack, Google Docs, and Zoom.

To understand SaaS, you must note that it is a type of cloud computing, an internet delivery system. Cloud computing simply means that, as a user, you can access online resources, such as storage space, without having to manage them directly.

Think of it as owning an online safe. If you want to access stored files, all you have to do is open the safe. Only this time, your safe isn’t confined to one place; you can use it virtually anywhere with the password and internet connectivity.

How does SaaS work?

As aforementioned, SaaS is a type of cloud computing, so it utilizes a cloud delivery model.

This means that software providers host, maintain, and secure the applications you use on their servers. But not all software providers have the resources to do these. So, they may contract cloud providers to host their applications in their data centers.

How data is secured in SaaS

Data safety is very important in SaaS. So, SaaS companies combine several measures to ensure your data is safe and easily retrievable. These means include

• Encryption: Encryption works by scrambling your data when you’re uploading or using it and when it’s in storage. It ensures you’re the only one who can read and access your data. So, even if someone manages to hack your service provider’s firewall, they’ll have a hard time reading your info.

• Access Controls: SaaS providers prioritize access control protocols to ensure that only you can access your data. These protocols include passwords, two-factor authentication, and biometric authentication.

• Data backup and recovery: SaaS providers regularly back up your data on multiple channels to ensure you can still retrieve your data in worst-case data-loss scenarios.

• Compliance: SaaS providers must also follow specific and strict data regulations when handling your data. These rules differ depending on your location and the kind of information you store online.

  
  

  For instance, SaaS companies must comply with the General Data Protection Regulation’s (GDPR) rules when storing data for European citizens, and when handling credit card information, they have to follow Payment Card Industry Data Security Standards (PCI DSS).

How SaaS products communicate with your apps

This may sound sketchy, but SaaS products share your info with other web-based software you use. However, they do this with your permission to ensure a seamless flow with your other applications.

For instance, Calendly, a meeting-scheduling software, can share your events and appointments with your calendar app. Doing this saves you the stress of documenting them manually.

But how exactly do these SaaS products communicate with your other software? They use APIs or Application Programming Interfaces, which are a set of protocols that define how different software components should interact.

B2B vs B2C SaaS

Like other software models, SaaS is either offered on a business-to-customer (B2C) delivery system or a business-to-business (B2B) model. And these models differ in many ways.

B2B SaaS are software applications designed for other businesses, e.g., Hubspot, Salesforce, and Slack. These apps either have a wide range of functionality or only perform singular, complex functions like accounting, project management, or customer relationship management (CRM).

Furthermore, B2B applications are advertised differently from B2C SaaS products since they target only organizations, not individuals. They are also always offered on a subscription basis.

B2C SaaS, on the other hand, refers to software packages designed for individual customers. They usually have only one function, such as note-taking or task management.

While most of these products are offered on a subscription basis, they also have free versions with limited functionality. Some examples include Spotify, Canva, and Dropbox.

It’s important to note that some SaaS products, such as Google Workspace and Zoom, are universal, serving both individuals and businesses.

Why is SaaS Different from Conventional Software

There are several differences between SaaS applications and traditional on-premises software programs you install on your PC.

Firstly, you don’t have to worry about the computing requirements to run any SaaS application because software providers handle them. On the other hand, software applications on your PC require storage, maintenance, and updates, all handled by you, to function properly.

But while you can access most conventional software programs offline, it’s not the same with SaaS apps because they are delivered over the Internet.

However, this also means you can use SaaS applications on different devices without installing them. So if you’re out with your friends, and a work emergency comes up, you can easily use your friend’s PC even if they don’t have the SaaS application installed.

Whereas with conventional software, you must buy, download and customize the application to your specifications on every new device.

Types of SaaS Solutions

SaaS products exist in different categories. One way to classify them is by separating them into horizontal SaaS or vertical SaaS.

Horizontal SaaS solutions are universal because you can use them across multiple industries; they include email marketing or accounting software. On the other hand, Vertical SaaS refers to solutions that can only be used in a certain industry, e.g. Vetcove, a SaaS product used in veterinary medicine.

SaaS solutions can also be categorized into packaged, collaborative, and management and enabling tools.

• Packaged software: Packaged software refers to SaaS solutions ready-made to handle specific functions. They are designed for functions such as accounting, customer relationship management (CRM), or project management, among others.
• Collaborative software: Collaborative SaaS products are designed with teamwork in mind. These SaaS products offer real-time communication, document sharing, and live editing features. Some examples include Slack, Google Docs, and Asana.
• Management and Enabling tools: Management and enabling tools help organizations manage their IT infrastructure with monitoring, backup and recovery, and security. Amazon Web Services (AWS), Microsoft Azure, and Google Cloud Platform are some examples of such tools.

SaaS applications also serve various functions, including customer relationship management (CRM), accounting, project management, and content management.

Benefits of SaaS

Using SaaS eliminates the hassle of purchasing, installing, and maintaining conventional software programs. It also has other benefits, which include the following.

Cost savings

You don’t have to worry about the storage space and computing power required to run SaaS apps. Hence, you don’t have to purchase and maintain extra hardware other than your PC, reducing operational costs.

Also, budgeting is more predictable with SaaS models, so you know exactly how much to pay for your software service every time. You can also choose to unsubscribe whenever there is no need for those services.

Scalability

You can upgrade to a higher subscription tier to unlock more benefits when using a SaaS product. These benefits can range from higher storage capacity to more user accounts. You can also downgrade to a lower tier with only the necessary features to save costs.

Accessibility and mobility

Unlike conventional software, you can access SaaS products with just an internet connection and a computer anywhere in the world.

Furthermore, because software is hosted on the cloud, you can switch devices without losing access to your files.

Upgrades and maintenance

You don’t have to worry about software maintenance and updates when using SaaS products since the software providers handle them. So, things like updates, bug fixes, and security patches, among others, are not your problem. This also helps you eliminate the cost and hassle of having in-house IT teams.

Integration with other applications

With APIs, SaaS applications can seamlessly integrate with your other software programs and SaaS products you use, especially those from the same provider. This helps you streamline your workflow and avoid unnecessary duplication.

Risks and Challenges of SaaS

As beneficial as SaaS programs are, they also come with risks and challenges. Let’s take a look at some of them below.

Security and data privacy concerns

Although most software providers follow strict data privacy regulations, there’s still the risk of losing your information to hackers. Luckily, while SaaS data breaches occur, they are rare.

Customization limitations

Most SaaS applications do not offer varied customization features, as they are often provided in one-size-fits-all solutions. So, it can be challenging for individuals and businesses with peculiar needs to configure SaaS products to their specifications.

While some SaaS products offer APIs to enable customization, it requires additional resources and technical support, increasing operational costs.

Data migration challenges

Vendor lock-in, a situation where SaaS brands make switching to another provider or platform difficult or costly, is a common problem.

Without APIs, moving to another SaaS platform means downloading and uploading your data to your new provider. And if you use SaaS products for your business, this may mean migrating terabytes of data.

Choosing the Right SaaS Product

Choosing the right SaaS provider can be difficult in a highly varied pool of options. So, here are some useful tips to consider

• Features and functionality: Choose a software provider with features that align with your requirements. For instance, if you run a marketing agency that manages social media accounts for multiple clients, you should look for a SaaS provider that offers features like social media scheduling, content creation tools, and analytics reporting.
• Pricing: It’s best to pick a SaaS provider whose pricing plans fit your budget. Compare similar products and pick the software solution that offers the best value for money.
• Scalability: Only some SaaS products have a wide range of vertical scalability. So, it’s best to keep your options limited to providers that can easily scale up or down with the needs of your business.
• Security and Compliance: As data breaches are no joke, you should consider the software provider’s security measures and compliance certifications, especially if you handle sensitive data.
• Integration: Choose a software solution that can integrate with your existing systems and workflows, saving you time and making your workflow productive.
• Support: Evaluate your options to see which SaaS product has the best customer support. As SaaS issues can be very technical, you must ensure you can easily access help when needed.

Conclusion

SaaS is the now and future of software applications. In this article, we’ve explored how it works, its types, and the benefits and challenges facing SaaS adoption. Armed with this information, you can make the right decision when choosing your software providers.