What is SaaS?
Software as a service (or SaaS) is a way of delivering applications over the Internet—as a service. Instead of installing and maintaining software, you simply access it via the Internet, freeing yourself from complex software and hardware management.
SaaS applications are sometimes called Web-based software, on-demand software, or hosted software. Whatever the name, SaaS applications run on a SaaS provider’s servers. The provider manages access to the application, including security, availability, and performance.
SaaS: The Payoff
SaaS customers have no hardware or software to buy, install, maintain, or update. Access to applications is easy: You just need an Internet connection.
A good way to understand the SaaS model is by thinking of a bank, which protects the privacy of each customer while providing service that is reliable and secure—on a massive scale. A bank’s customers all use the same financial systems and technology without worrying about anyone accessing their personal information without authorization.
A “bank” meets the key characteristics of the SaaS model:
A multitenant architecture, in which all users and applications share a single, common infrastructure and code base that is centrally maintained. Because SaaS vendor clients are all on the same infrastructure and code base, vendors can innovate more quickly and save the valuable development time previously spent on maintaining numerous versions of outdated code.
Improved access to data from any networked device while making it easier to manage privileges, monitor data use, and ensure everyone sees the same information at the same time.
SaaS Harnesses the Consumer Web
Anyone familiar with Amazon.com or My Yahoo! will be familiar with the Web interface of typical SaaS applications. With the SaaS model, you can customize with point-and-click ease, making the weeks or months it takes to update traditional business software seem hopelessly old fashioned.
Organizations are now developing SaaS integration platforms (or SIPs) for building additional SaaS applications. The consulting firm Saugatuck Technology calls this the “third wave” in software adoption: when SaaS moves beyond standalone software functionality to become a platform for mission-critical applications.