What is SaaS? A few things you should know about it

What does SaaS mean? 

SaaS or Software-as-a-Service is a cloud-based method of software delivery on a subscription basis also known as “on-demand software”. It means, instead of purchasing the software you subscribe and just log in from any compatible device on the internet. It can be anything from business apps, office software, or streaming services. Some popular SaaS apps are Slack, Office 365, Zoom, Shopify, Netflix and many more.

What’s the difference between SaaS and traditional software?

As said before, SaaS being cloud-based means you don’t need to buy it like traditional software, install it and then use it. It is all on the internet so you just log in and use it. The main differences are that on SaaS apps, multiple users can use it simultaneously, use it anywhere on any device and it only requires an internet connection. One of the main advantages of SaaS over traditional software is that you will always use the latest version without need to install software updates. You can read more about this subject on our blog to learn more.

What are the advantages and disadvantages of using SaaS?

Some of the advantages of using SaaS:

  • It’s cost-effective: When you buy and install entire software and IT support needed for it to work is negated, when you rent software from a third-party service provider. No up-front license fees are resulting in a lower initial cost.
  • Quick and easy: Because it is already installed on the cloud there is no need for the traditional installing process and it’s ready for use anywhere in the world and from any compatible device. All that is needed is an internet connection.
  • Easy upgrades: Hardware and software upgrades being dealt with by SaaS providers removes this process from your workload.
  • Data storage: Data is saved on the providers’ cloud storage regularly.
  • Scalability: Offering many subscription options means you can change your subscription as needed and if the business is growing you can buy additional access for new users.

There are also some disadvantages of using SaaS:

  • Loss of control: Because it is managed by the provider you don’t have the same control over the software as you would have if you use traditional software. For example, everyone uses the same version of the software, and it can’t differentiate between users.
  • Connection requirement: since its web delivery model without having a connection to the internet you can’t access software.
  • Security concerns: This is a big concern for companies because important company data is stored in the cloud,  so strict measures should be taken with sensitive information.
  • Slower performance: It may run at a slower speed because it’s hosted on the web and not on a local machine.
  • Customization: As a consumer you have very little impact in a way of customization of the app.

Pricing options

There are many options when it comes to pricing for SaaS. It varies between providers. It can depend on what the product gives. Most pricing options are monthly or annually but the price itself is different by what it gives you. So here are some of the pricing options:

  • Per-user pricing: it’s one of the most common pricing options. The price itself depends on the number of users you need.
  • Tiered user pricing: similar to per-user pricing it depends on the number of users, but the difference is that the number of users does not increase by one user, instead, it increases by a number like 5 or 10.
  • Per storage pricing: here price change depends on the amount of storage the cloud gives. For example, lower price for 15 Gb storage and higher for 30Gb storage.
  • Feature-based pricing: This too is one of the common pricing options. The price depends on the feature SaaS gives you, which means that the higher paid subscriptions give you more features.
  • Pay as you go: this is one of the simpler options because you pay as much as you use it.
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