You have probably heard the phrase Software as a Service (SaaS), and you may have even tried out some basic SaaS applications, such as online word processors and spreadsheets, or free email accounts. You may be wondering if this new technology is useful from a business point-of-view and if SaaS is relevant to a small business owner or if it is strictly a big business enterprise service.
Software as a Service has been through a series of incarnations since its first appearance in the late ‘90s. Known then as application service providers (ASPs), the first companies to offer software via the web tried to emulate complex desktop applications by adapting desktop programs to a hosted model, resulting in large, complex software that would load or run very slowly via a web connection. SaaS requires more bandwidth than the dialup connections that most businesses were using at that time. As a result, most ASPs failed, and the ASP model became associated with some of the over-hyped claims of the dot-com days.
SaaS Revolution
Today, even the smallest businesses have a cable or DSL connection and satellites now offer fast wireless connectivity. SaaS designers have also written software that is specifically designed for Web delivery, resulting in an improved user experience. There are many advantages to using SaaS applications:
• Customers can access their data from any computer or mobile device with an Internet connection.
• Desktop clients aren’t necessary because accounts are accessed via the Web.
• Data is housed in secure data centers with expandable capacities.
Small businesses can take advantage of SaaS applications for collaboration or sales force automation. For example, an office administrator can easily schedule meetings for busy executives with shared calendars, and online file repositories enable employees to access and maintain up-to-date documents or contracts from any location.
The current crop of SaaS applications now function at higher speeds because of breakthrough technologies, such as Asynchronous JavaScript and XML (AJAX). These technologies enable automatic changes to content without requiring the full Web page to reload, allowing users to rapidly move between different areas of the application and assuring fast page loads. The result is software that operates much like familiar desktop software and provides similar functionality. For example, the improved interactivity and usability of the applications make it easy to conduct real-time actions, such as drag and drop, grab and scroll and grab and zoom.
Breaking Out of the Box
There is a significant difference between SaaS and traditional “boxed” software and how they are offered to customers, which can impact a customer’s bottom line. Software companies that sell boxed software must conduct regular upgrades to remain viable and to meet the latest system requirements. Customers are also usually locked into long-term contracts that require them to stay with a software provider and conduct a variety of upgrades over the life of the contract.
SaaS vendors, however, earn their revenue by charging a subscription fee, usually a monthly, per user charge. Keeping the customers happy keeps their revenue flowing. If customers are dissatisfied, they can quickly end their subscription. As a result, SaaS providers must constantly improve their products and provide these upgrades at little to no cost to the subscriber. With SaaS, costs are lower, more predictable and include support and service, giving smaller businesses access to applications that once required large investments in hardware, software and IT staff that only large businesses could afford.
Enjoy the Peace-of-Mind
The most common concerns about using SaaS for critical business functions, such as communication and finance, are security and reliability. Businesses cannot afford to lose access to their data, let alone lose the data altogether. The reality is – for small businesses in particular – company data is generally safer in a SaaS application than it is in an office. SaaS providers use extremely secure Tier I data centers to operate their applications and store customer data, and they have extensive back-up protocols that function 24 hours a day. SaaS customers can enjoy piece-of-mind knowing that their data is protected, readily available and accessible at any time.
SaaS proponents see a day – in the not too distant future – when businesses, regardless of size, are more mobile and less dependent on access to specific computers loaded with costly software. Many small businesses are freeing themselves from the limitations of boxed software, and it is this liberation that defines the SaaS revolution.
