Software as a service (SaaS) is a software distribution model in which a third-party provider hosts applications and makes them available to customers over the Internet. SaaS is one of three main categories of cloud computing, alongside infrastructure as a service (IaaS) and platform as a service (PaaS).

SaaS removes the need for organizations to install and run applications on their own computers or in their own data centers. This eliminates the expense of hardware acquisition, provisioning and maintenance, as well as software licensing, installation and support. This allows organization to utilize the cloud model or method for computing.

SaaS - Software As A ServiceOther benefits of the SaaS model include:

  • Flexible payments: Rather than purchasing software to install, or additional hardware to support it, customers subscribe to a SaaS offering. Generally, they pay for this service on a monthly basis using a pay-as-you-go model. Transitioning costs to a recurring operating expense allows many businesses to exercise better and more predictable budgeting. Users can also terminate SaaS offerings at any time to stop those recurring costs.
  • Scalable usage: Cloud services like SaaS offer high scalability, which gives customers the option to access more, or fewer, services or features on-demand.
  • Automatic updates: Rather than purchasing new software, customers can rely on a SaaS provider to automatically perform updates and patch management. This further reduces the burden on in-house IT staff.
  • Accessibility and persistence: Since SaaS applications are delivered over the Internet, users can access them from any Internet-enabled device and location.

SaaS is closely related to the ASP (application service provider) and on demand computing software delivery models. The hosted application management model of SaaS is similar to ASP: the provider hosts the customer’s software and delivers it to approved end users over the internet. In the software on demand SaaS model, the provider gives customers network-based access to a single copy of an application that the provider created specifically for SaaS distribution. The application’s source code is the same for all customers and when new features are functionalities are rolled out, they are rolled out to all customers. Depending upon the service level agreement (SLA), the customer’s data for each model may be stored locally, in the cloud or both locally and in the cloud.

Organizations can integrate SaaS applications with other software using application programming interfaces (APIs). For example, a business can write its own software tools and then use the SaaS provider’s APIs to integrate those tools with the SaaS offering.

SaaS applications for fundamental business technologies include:

  • Email
  • Sales Management
  • Customer Relationship Management (CRM)
  • Financial Management
  • Human Resource Management
  • Billing and Collaboration

When talking about software as a service (SaaS) and cloud computing, people tend to use the two terms interchangeably. Although the two technologies are related, they are not the same. SaaS is a type of cloud computing.

SaaS History

During the 1960s, SaaS was referred to as a “time sharing system.” In this model, multiple terminals (keyboards and monitors lacking CPUs) were connected to a mainframe or mini-computer, which hosted applications and data. When the cost of desktop computers dropped, workers had their own PC that hosted applications locally, while critical data was still hosted on a central server. As bandwidth costs decreased, the SaaS model for software deployment returned as a cost-effective solution.

SaaS has made its way back to the head of the class over the years – examples include Google Docs, Yahoo! Mail and SurveyMonkey. These are all SaaS technologies that are less costly than installing and maintaining applications on numerous desktops across an enterprise, making it an attractive solution for many organizations.

Similar Benefits

SaaS and cloud computing offer similar benefits to users.

  1. They don’t require painstaking installations or constant maintenance because they don’t reside on the user’s machine or an organization’s server.
  2. IT staff don’t need to occupy your computer every 6 months to update your software or make sure you have the latest patch for a certain application.
  3. Maintenance issues are taken care of on the “server side”.
  4. Both SaaS and cloud computing are offered on subscription basis and can be accessed instantly – from anywhere a user has an Internet connection.

SaaS and the cloud provide an alternative to maintaining and updating software for each employee in the company. Instead, a company’s technology resources and staff can focus their attention elsewhere, a very attractive option for firms wanting their IT staff performing research and development or critical support functions.

How The Cloud Works - Cloud and SaaS Computing

Differences: Functionality and Data Security

The National Institute of Standards and Technology’s (NIST) defines cloud computing as “a model for enabling ubiquitous, convenient, on-demand network access to a shared pool of configurable computing resources (e.g., networks, servers, storage, applications, and services) that can be rapidly provisioned and released with minimal management effort or service provider interaction.”

From a historical perspective, SaaS has led to the development of cloud computing, which is essentially a larger platform and is where SaaS resides. SaaS “sits in the cloud.” So cloud computing offers additional services other than just SaaS. Another critical difference between SaaS and the cloud is that with SaaS, all the data resides with the service provider. More often than not, the benefits of SaaS outweigh concerns of data ownership and security. As an example, many people use a free email service that controls and stores all our data for us. Although we might want to know the company’s privacy policies, many of us will continue to use the service and feel relatively comfortable doing so.

With the cloud, you have more control. Although the servers are not local, you manage the data and software and can make backups and store data in the cloud. And you can move the data out of the cloud environment to your own local repositories – anything you would normally do with a bank of local servers.

Saas and Cloud Career Example

Cloud Technology Architect

Position Overview:

A Cloud Technology Architect in Microsoft Dynamics AX, with a background in finance, implementation management and the skills required to lead a team to deliver solutions as promised, with no surprises.

With a passion for solving business problems, you bring an analytical mindset and a dedication to quality to every part of your work. Your people skills allow you to both motivate your team and instill trust in the minds of our clients. You have a vested interest in using the latest technologies, and are constantly seeking to expand your knowledge base and stay ahead of the curve.

Cloud Technology Architect Compensation: $100-150/yr base, bonus range from $25-55k/yr and excellent benefits. Realistic opportunity to earn equity stake in organization within 18-24 months.

Unique differentiation of organization:

  1. They are very focused on cross training across the various products. Don’t ever feel like you are working in a stagnant product – always opportunity to stay current with the latest technologies as a cloud technology architect.
  2. Average overnight travel expectation at 20%. 30% is extreme for Functional Consultants, even less for Cloud Technology Architect. Easy to keep employees happy with a more balanced work/life balance.
  3. They boast a client retention rate in excess of 95%. This is enabled in part because they have a completely separate support organization staffed with employees that prefer working with existing customers vs. handling new implementations.
  4. Realistic promotion opportunity within the organization. Very defined levels (Associate, Sr. Associate, Manager, Sr. Manager, Director, Vice President/Equity stakeholder) that allows individuals to advance every couple of years.
  5. Continued education & certification programs in place and encouraged throughout organization

Key Objectives & Responsibilities for a Cloud Technology Architect:

Work collaboratively with team members to complete projects, and to develop consulting professionalism to be able to work directly with clients on solutions.

Execute thorough technical requirements gathering in support of solution design activities. Maintain good working knowledge of current infrastructure and future trends for cloud technology and SaaS.

Hands on Azure cloud experience – familiarity designing, implementing, configuring, supporting the following

  • Azure AD
  • Azure SQL
  • Azure Remote App
  • Azure IaaS offerings (virtual machines)
  • Azure networking, site-to-site VPNs and Expressroute
  • Azure PaaS web apps
  • Azure Service Bus
  • Other Azure offerings

Provides sales support assisting with demo prep, understands project scope for creating estimates, account management responsibility to retain client relationships and identify new opportunities, adhere to methodology framework and follow project management standards.

Desired certifications and proficiency in Microsoft Azure Solutions.

Cloud Technology Architect Time Management: 10% sales support, 70% project execution, 10% practice management, 10% content creation.