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October 11, 2022updated 20 Jan 2024 3:33am

What is SaaS?

From Google to Grammarly, SaaS is being adopted by many. Its benefits are saving the buyers time and money.

By Silvia Pellegrino

SaaS, which stands for Software as a Service, is one of the ways to deliver and use cloud-based applications over the Internet. Some of the most common examples are emails and office tools.

Instead of downloading software on a desktop PC, these applications can be accessed via an internet browser like Google Chrome, Firefox or Microsoft Edge. This significantly reduces the complexity and number of steps to take to access a service.

Software as a service (SaaS)
Image: Shutterstock

How does SaaS work?

Thanks to SaaS, software can be delivered and accessed from any device with an internet connection and a web browser. This is why such software is sometimes referred to as web-based.

Users can deploy SaaS in one of three different ways. The first is via private cloud, which is when cloud software is built on infrastructure that exists for exclusive use by a single organisation. The second is via the public cloud, which is cloud services offered, and usually hosted, by a third provider. And the last possibility is via a hybrid cloud, which exists in an organisation that uses both public and private cloud systems in their IT estate. 

The concept of SaaS was born in 1961 during a speech to MIT students. John McCarthy, a computer scientist famous for his work in AI, said: “computation may someday be organised as a public utility.” This preceded the concept of cloud computing as a shared resource of computing power.

However, it took about 30 years for the idea of web-based technology to come to life, as it completely matured only in the late 1990s.

What are the benefits of SaaS?

One major benefit of SaaS deployments is that they do not require a lot of hardware, which reduces the IT burden compared to traditional software.

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Another factor is that SaaS systems are always paid within a subscription model, while usual software has to be purchased through a licence, usually upfront. This can be but isn’t always a benefit, as long-term licenses can be better suited for some users. On-premises users also often have to pay up to 20% per year in either maintenance or extra fees, while a SaaS system has all of these expenses included.

The main advantage of SaaS is accessibility, as users are able to access it from any internet browser 24/7, no extra operational management is needed, data is regularly saved in the cloud and SaaS providers invest heavily in security technology.

Not only does SaaS usually come with a lower cost for purchase and maintenance, but it also saves the users time. The application is already installed and configured, and it would only take a couple of hours of installation to be able to use it on the cloud.

What are the major SaaS companies?

There are hundreds of SaaS companies, some more known than others. However, the major names are Adobe, Microsoft, Dropbox and Google.

From programming tools to products for creatives, all these companies have different characteristics. Google, for instance, has a SaaS platform that offers many cloud services such as document creation, website analytics, spreadsheets and emails. 

Dropbox is a cloud storage service designed to store files and access them across different devices. It also allows its users to share files with others. 

One of the biggest and most successful enterprises, Salesforce, is also a SaaS platform. The latter gives users the ability to collaborate with both other members of their team and customers. Salesforce is a customer relationship management (CRM) platform, and it helps businesses to keep track of customers and their relationship history with the company. 

Other names are Shopify, Zendesk and Zoom, which also sync up with popular calendars so that planned calls will appear on the participant’s schedule. In addition, cloud computing platforms like Oracle are SaaS companies too.

Most SaaS companies provide their services either via web browsers, cloud services or mobile applications.

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