Cloud Computing vs SaaS – Why Is It The Future Of Technology
By now, most people are familiar with Cloud Computing and Cloud-based services, but SaaS may be a new term, as it is not as well known. Cloud computing and SaaS, or “software as a service,” are very similar, but there are some key differences. Cloud computing is a model where servers, networks, and data storage are all available via the internet rather than being maintained on site. SaaS is an example of cloud computing.
Software as a service, or SaaS, is an example of a cloud-based delivery system and one of the most common program access systems. Companies typically purchase access to products via SaaS by subscription, and sign-in to those systems requires internet access.
Generally speaking, all SaaS services are cloud-based. Still, not all cloud-based services are available via a SaaS or software-as-a-service system. SaaS systems are top-rated today because they are immediately functional, cost-effective, and require little maintenance. Keep reading to decide if a SaaS program is something you want to pursue.
What Are Cloud-based Services?
Cloud-based services are systems, programs, or data warehouses that store or maintain data in a virtual location, rather than on-site servers. The internet can be considered “the cloud.”
Individuals can use the cloud on a personal or business level for access and storage of services. For example, many people store their photos on a cloud service, such as Google Photos, rather than using up space on their smartphone.
Some cloud-based services allow users to maintain, develop, and update their data, systems, and programs but store them on the cloud rather than maintain their data via computer hardware.
Other cloud-based services, such as SaaS, are readily developed programs designed for immediate use, requiring no maintenance or updating by the end-user. They are accessed by subscription, but the end-user cannot make changes or updates. It is owned and maintained by a separate entity.
What Are Some Examples of SaaS?
The development of software-as-a-service marked a massive advance in technology for many companies. Under a SaaS system, complex in-house monitoring and maintenance is not required, while in the past, Information Technology (IT) teams in a business setting were required to:
- Maintain network servers on-sited
- Troubleshoot all network issues and problems
- Employ a full team of employees to monitor and maintain the system
- Install all system updates
- Oversee all activity across the network
Now, companies can simply purchase access to the computer system or program desired via the internet with a SaaS model. In contrast, the maintenance of the system and program is handled off-site by the program owner.
There are plenty of SaaS programs, but three very well-known programs are:
- Amazon Web Services
Users simply sign into these programs via the internet at the start of their workday. Consistent internet access is the only requirement for consistent service with SaaS programs.
Why are SaaS programs so Beneficial?
First, SaaS systems can be extremely cost-effective, particularly for small businesses. Maintaining on-site servers and computer networks can be a costly endeavor.
In addition to purchasing all of the related equipment and maintaining a space to house the server(s), businesses with on-site servers must employ a team to support the network. SaaS is a much simpler, cost-effective solution.
Secondly, from a business perspective, SaaS is straightforward! End users have immediate access to the critical systems as soon as the subscription is paid.
Nothing needs to be installed, maintained, or set up for end-users to access the system. They simply sign-on, and they are ready to go! With SaaS, end-users get access to the most recent software version because the entire system is a subscription, rather than an in-house installed software package.
The Evolution of SaaS
In actuality, SaaS systems have been around since the mid-1990s. Still, the popularity of the SaaS delivery system has evolved. The terms “cloud-based services” and software-as-a-service are relatively recent buzzwords. When the plans were initially deployed, many organizations were hesitant to jump on the cloud or SaaS bandwagon for various reasons.
Some business owners did not want to give up control and management of their systems and servers.
However, as many businesses have become more customer-centric over the years, SaaS programs have become more popular. With SaaS, clients have access to the latest and greatest in terms of technology and upgrades. SaaS delivery systems provide some excellent perks, such as:
- Plenty of cloud storage
- Access to a ton of analytics and reporting capabilities
- Customer-focused services, such as chatbots
It can provide organizations with more significant amounts of data, more than they could collect and analyze on their own, at a much lower cost.
The Benefits of SaaS
Regardless of size, many companies choose to use software-as-a-service solutions for their business, rather than traditional in-house system management, due to some of the clear advantages of this type of delivery system. The benefits of a SaaS model are:
- Lower Up-front Cost – This is great for new businesses or smaller organizations that cannot afford large system expenses during start-up.
- Quick and Easy – Compared to a traditional system purchase where programs must be installed on each computer, the SaaS model is much faster. Each user is given the company’s SaaS key and simply accesses the applicable program via the cloud. The most current version of the program is ready to go.
- Accessibility – SaaS and cloud-based models are accessible directly from an internet browser. Users can access applicable programs from their home computer, at the office, or even using their cell phone on the go.
With the speed at which business is conducted these days, having instant access via the web is vital to remain competitive.
- No-fuss Upgrades – rather than installing updated versions of specific programs, SaaS services models handle all upgrades. Users will always have access to the most recent program release, and the service provider manages the updates.
- Flexibility – As the company grows, the system requirements and program availability can grow with the company. Subscription services can easily upgrade when a business succeeds, or new employees are hired.
The Disadvantages of SaaS
While SaaS services fit the bill for many organizations, there are still some disadvantages over traditional technology delivery systems. Here are some of the defined weaknesses of a SaaS system:
- Lack of Flexibility – Typically, SaaS systems provide an “out-of-the-box” solution. If a business needs change, the course or program cannot be adjusted or modified for individual client needs.
- Security – While cloud-based services certainly provide security measures to ensure client data integrity and proprietary information, clients are at the mercy of the program supplier. If they choose not to encrypt data, nothing can be done from a customer standpoint to increase overall security.
- System Limitations – As SaaS options continue to grow, this will be less and less of an issue.
- Connectivity – With SaaS programs, companies are entirely reliant on internet service connectivity. If internet service is down, spotty, or unavailable, the web-based programs are also inaccessible to employees. With traditional in-house program management, internet access is not as much of a concern.
- Performance – Web-based services and programs may not run as quickly or be as responsive as traditional on-site server-based systems. Users may experience lag time or freezing based on internet service and bandwidth available.
Working from Home with SaaS and Cloud-Based Services
Flexibility is essential for most organizations these days, as was seen with the Covid-19 crisis. Many organizations were forced to find alternative procedures for employees who were traditionally on-site workers.
With on-site Information Technology (IT) program management, working from home can cause some complications. While VPNs and other processes exist to allow work-from-home solutions, cloud-based programs can be securely accessed anywhere without any additional steps or intervention.
As the business landscape continues to change and evolve, many workers are beginning to demand more flexibility in their day-to-day work lives. As such, the work from home business model continues to evolve and grow.
This places a higher demand for the ease and simplicity of cloud-based SaaS program accessibility. Companies continue to work to meet their employees’ needs.
Some Common SaaS Myths
As mentioned earlier, cloud computing and SaaS services are not new; however, SaaS business solutions have increased dramatically in the last few years. Even so, there are still some misconceptions about SaaS, even as its popularity grows.
- Myth: SaaS programs are less secure. From a business perspective, clients are at the mercy of the product to provide adequate security. There is no reason to believe that cloud-based services are less secure than on-site servers. From a client’s perspective, it may be challenging to give up control of managing security. Still, as a general rule, the security measures available for cloud computers are equivalent to on-site server security management.
- Myth: SaaS programs offer one solution. While it is true that SaaS services are an out-of-the-box program, they are just as robust as on-site managed programs. Most SaaS programs provide a dashboard of tools that companies can choose from to fit their business needs. While on-site IT cannot make changes to the SaaS tools, most companies offer various solutions to clients based on industry.
- Myth: IT professionals are anti-SaaS. Like any new technology, it may take some time to embrace the changes. As such, many IT professionals have been wary of SaaS solutions before they began working with them.
IT staff with experience working with SaaS solutions have found that managing an organization’s technical needs is more manageable with SaaS solutions on board. Many maintenance tasks are the cloud-based provider’s responsibility, allowing IT teams to use resources elsewhere.
Future SaaS Trends
- Vertical Business Solutions. Traditionally, SaaS services have provided horizontal solutions. Meaning answers were based on broad business functions, such as Sales, with services like Salesforce.
Each company that uses Salesforce is provided the same solution without any significant customization. This out-of-the-box type program solution will meet the basic needs of sales teams across many industries.
As SaaS becomes more commonplace, customers are demanding vertical solutions that provide program specifications based on industry to meet client needs better. For example, in a vertical solution, companies that sell insurance will be provided with a different product than companies that sell cars.
SaaS companies are beginning to provide solutions customized to the industry, rather than one-size-fits-all software programs.
- Moving from SaaS to PaaS solutions. Current software-as-a-solution products will start giving way to platform-as-a-solution products. This will allow customers much more flexibility in their programs. It will also enable organizations to use specific apps to add to their original work to meet their company needs.
For example, a CRM solution for call center management may have an out-of-the-box program for call answering. Still, it will have an add-on feature for email responses. This allows for greater customization, so individual organizations ultimately have a product that mirrors their requirements.
- Unbundling Services. Again, in terms of out-of-the-box solutions, SaaS products are typically provided to clients with the full range of platform capabilities. But what happens when companies don’t need the full range of services? They end up paying more than necessary and using less of the program.
SaaS providers are beginning to offer more of an ala carte menu of options. Companies can select the features they want and leave out the parts they don’t need to manage their business. This allows for greater flexibility in programs and pricing as well as greater customer satisfaction.
- Emerging Micro-SaaS Businesses. With a vast amount of SaaS products providing broad-based solutions, an emerging niche is micro-SaaS companies. These companies are not offering full CRM or Accounting solutions. Still, they are providing small add-on services compatible with the main SaaS product.
These micro-SaaS products are great solutions for clients who may not have all of their needs met through their current SaaS provider. It allows for greater customization based on the specific needs of the client. This is similar to PaaS; however, the micro-SaaS companies typically focus on small, individual add-ons, not various app solutions.
Growth Within Cloud Computing and SaaS Industry
The cloud computing industry has grown steadily over the past decade. Currently, estimates for 2020 indicate that the global market cloud computing industry will exceed $330 billion. Most companies are now using cloud computing to manage a portion of their business, with some estimates as high as 89%. With more companies moving toward cloud-based and SaaS business models, this number will only increase over the coming years. The top reason for moving toward cloud-based solutions is the ability to access systems from anywhere.
Within the cloud-based business, the SaaS model is the largest percentage of a business. Currently, more than 75% of cloud-based companies are using a product that is considered a SaaS. PaaS products and other cloud computing solutions are also making headway. However, SaaS programs will continue to represent the bulk of cloud computing programs in the next year.
Who are the SaaS Leaders of Today?
The SaaS marketplace has grown tremendously over the past 20 years, with explosive growth in the past decade. These are the industry leaders today:
- Salesforce – One of the pioneers of the CRM cloud model. They have expanded into other areas, including social media and analytics.
- Microsoft – With the Microsoft365 program, Microsoft continues to be a SaaS leader. They now offer a Sharepoint service as well as an on-demand SQL server database.
- Amazon Web Services – They’re not just for shopping. Amazon is offering companies a platform to build their own SaaS and also acts as a reseller of SaaS products from third-party vendors.
- Google G-Suite – Google offers customers an enhanced version of their current free services, with the entire menu of Google options with expanded technology and services available.
- Slack – Slack offers cloud-based customer service solutions that focus on managing stock, purchases, and overseeing billing and shipping products.
SaaS is Becoming the Industry Standard
There is no doubt that the future of business lies in Cloud computing, SaaS solutions, and emerging products, such as PaaS offerings.
As businesses continue to change and grow, cloud-based services with anywhere, anytime access, quickly become the gold standard for companies around the world. They will continue to grow exponentially over the next decade.