What is SaaS?
Software as a Service (SaaS) is a cloud-based software model that delivers applications to end-users through an internet browser. SaaS vendors host services and applications for customers to access on-demand. With a SaaS offering, you do not have to think about how the service is maintained or how the underlying infrastructure is managed; you only need to think about how you will use the software. Another typical aspect of a SaaS model is pricing that's paid on a subscription or pay-as-you-use model, instead of purchasing all functionality at once in one big chunk A common example of a SaaS application is web-based email, where you can send and receive emails without having to manage feature additions to the email product or maintain the servers and operating systems that the email program is running on.
Why is SaaS important?
SaaS is important because it gives businesses access to powerful software that would previously have been too expensive or energy-intensive to run from on-premises environments. The SaaS provider manages the hardware, the software tools, and the application in its own data center or cloud environment. You can access the software directly from the browser or mobile application. The subscription-based model of SaaS also means you can scale your use of software up or down as your business needs it. We give some benefits of SaaS below.
You can access your SaaS from any device with an internet connection. Under more traditional software models, you could only access business applications from the workstations on which they were installed. This accessibility is increasingly in-demand because of hybrid and home working models.
Lower upfront costs
SaaS vendors typically offer a subscription-based model that reduces upfront costs of traditional software such as licenses, installation, or infrastructure management. There is also no need to invest in additional computing resources to run the software, as the vendor manages everything on its servers.
Reduced ongoing costs
As the SaaS model charges a standard fee, you can confidently plan how much your software services will cost per annum. Ongoing maintenance is overseen by your SaaS providers and covered by your subscription. You'll also avoid paying for increased server capacity if you need to scale up your SaaS solution.
SaaS eliminates the installation and configuration associated with on-premises software, meaning you can roll out software across your business as soon as your enterprise subscription begins.
SaaS allows you to easily add more services or storage to your subscription as needed without incurring the costs of upgrading your infrastructure. The scalability of SaaS is perfect for businesses that are growing quickly, as they can add new features and users when it suits them.
SaaS providers invest heavily in rigorous cybersecurity protocols and disaster recovery capabilities. Many SaaS providers promise 99% or even 99.9% uptime, meaning all you need in order to work is a reliable internet connection.
Software vendors regularly make incremental updates and security patches to their software. Updates can be set to deploy automatically without the need for IT support.
You can integrate SaaS applications with other platforms and systems using APIs. You can customize the software to suit your particular requirements without infrastructure costs.
Real-time data and analytics
SaaS applications often collect data regarding usage and performance, and can offer insights in real-time.
How does SaaS work?
Software as a Service works through a cloud delivery model. SaaS vendors commonly host applications and data on their own servers and databases, or utilize the servers of a third-party cloud provider. SaaS vendors also manage platforms, operating systems, and middleware.
Once a subscription to a SaaS solution is signed, the provider grants the customer access to the application through web browser user registration and login. SaaS vendors usually adopt a multi-tenant model, meaning a single version of the SaaS solution will be hosted on the vendor's servers and provided to individual subscribers.
Service level agreement
A service level agreement (SLA) is a legal contract that sets the terms and conditions of using the SaaS product. It covers what your vendor offers and service expectations such as uptime, security, support, and automatic updates, while also outlining your responsibilities as a client. For example, most businesses need to own their data regardless of where their information is held. A standard SLA will confirm in writing that your company retains ownership of its data and your right to retrieve it at any time. In the vast majority of cases, you can download your data and back it up locally at any point.
What are some commonly used SaaS applications?
There are several commonly used types of SaaS applications, including:
- Customer Relationship Management (CRM)
- Enterprise Resource Planning (ERP)
- Email marketing software
- Accounting software
- Human resources software
- Security software
- Collaboration tools like Amazon Chime
- Document editing services like Amazon WorkDocs
- Communication software
- Contact Center software like Amazon Connect
How does SaaS compare with other cloud services models?
SaaS is one of three main models for cloud computing, alongside Platform as a Service (PaaS) and Infrastructure as a Service (IaaS).
Platform as a Service
Platform as a Service provides hardware and software infrastructure for constructing and maintaining applications typically through APIs. Cloud providers host hardware and software development tools in their data centers. With PaaS, you can build, test, run, and scale applications faster and at a lower cost.
SaaS vs. PaaS
Whereas SaaS is used to do specific tasks, PaaS gives you access to managed infrastructure for application development. As a comparison between AWS products, Amazon Chime is an online SaaS service that lets you talk, chat, and place business calls in your organization. On the other hand, Amazon Chime SDK is a PaaS platform that supports the development of real-time communication features.
Infrastructure as a Service
Infrastructure as a Service (IaaS) provides services for networking, computers (virtually or physically), and data storage. Using IaaS delivers the highest level of flexibility and management control over your IT resources, and is similar to existing IT resources.
SaaS vs. IaaS
SaaS offers the most comprehensive third-party software and maintenance choice, whereas IaaS only supplies and maintains core components such as servers or storage. IaaS is considered a favorable option if you want maximum control of your environment, while SaaS is preferable if you're looking for ease of use.
The following table breaks down how much of your own IT infrastructure you must oversee and maintain if you own your own IT or run one of IaaS, PaaS, or SaaS.
- Yellow cells indicate what you manage
- Green cells indicate what the cloud service provider or vendor manages
What are some examples of SaaS use cases on AWS?
SaaS applications are built and run on cloud infrastructure. Several leading enterprises use AWS to build SaaS applications. They include:
U.S. multinational IT services organization BMC Software worked with AWS to develop a SaaS version of Control-M. One of its longest-standing offerings, Control-M simplifies application and data workflow orchestration. BMC enlisted the expertise of AWS SaaS Factory to provide insight into developing the SaaS solution. AWS also offered advice that optimized costs while improving business agility and operational efficiencies.
CyberArk's Identity Security Platform helps businesses to solve challenges caused by remote working, such as remote access management, administration rights, and security credentials. Working with the AWS SaaS Factory team, CyberArk built new shared services for its platform. CyberArk was able to validate and accelerate SaaS development by building centralized, cloud-native shared services for all of its SaaS solutions and reduced its time to market by 30%.
AWS Advanced Technology partner Cohesity released its Data Management as a Service (DMaaS) on AWS to radically simplify data management. Cohesity worked closely with several AWS teams, including AWS SaaS Factory, to design, implement, and launch its product. As a result, it reported a 50% acceleration in time to market.
Why should I choose AWS to build SaaS?
AWS offers many platforms you can use to build custom SaaS applications and third-party SaaS solutions. You can access a number of tools and resources to drive your SaaS transformation. Build your organizational, operational, and technical capabilities with AWS best practices and SaaS expertise. AWS Partners can access expert SaaS resources with AWS SaaS Factory to help at every stage of the SaaS journey.
With AWS SaaS, you can achieve:
- 30-50% reduced development time for MVP
- 70% increase in gross profit margins
- 69-77% reduced time to launch in new markets
- 41% increase in operating margins
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