What is Software as a Service (SaaS): A Beginner’s Guide
Editor’s note: published January 2022 and retained for reference. Webtales has since launched its own SaaS products, Watskart and Property CRM, built on the principles described here.
The software-as-a-service (SaaS) market was valued at $272 billion in 2021. What is SaaS, and why is it such a valuable field? Let’s explore.
Definition of SaaS
Software-as-a-service is a software licensing model. Software located on external servers is made accessible to users through web browsers, and users access its features on a subscription basis. Google Workspace, Netflix, Dropbox and Salesforce are common examples.
- Instead of installing software on their devices, users access applications over the internet.
- They connect to the application and log in with a unique username and password.
- They use the features either free (Gmail) or for a subscription fee (Netflix).
For developers, SaaS tools are easy to implement, update and debug. That’s why the model has countless business applications: file sharing, email, calendars, social media, customer relationship management.
More importantly, SaaS is cheap for end users. Why purchase multiple software licences for different devices when you can access your application from any device with an internet connection? The speed and ease of delivery make SaaS helpful for users and lucrative for companies.
The role of cloud computing in the rise of SaaS
In the past, even large companies could release only a limited number of software products a year, because updating them was time-consuming. Users had to download or purchase newer versions frequently, and install copies on every device. With SaaS:
- Users don’t need to install any software
- Users don’t update manually
- Users log in via a browser and always get the latest version
This convenience was made possible by cloud computing: delivering technology services, from storage to networking, over the internet. Developers store their SaaS tools on cloud systems, update them centrally, and every user receives the latest version on their next visit. These advances in production efficiency are compelling every industry to adopt SaaS.
The benefits of SaaS for vendors and users
Increased trust in the brand
SaaS tools don’t live on specific company servers, so companies don’t buy new hardware to add features; they buy extra cloud capacity at low cost. Upfront costs of implementing, updating and debugging are low, and the savings can go into customer retention and customer-friendly features. A growing online community of regular users boosts brand credibility.
Low cost of distribution
Software delivery used to be physical. With SaaS, developers use the cloud and users use the internet. Releasing updates is as easy as upgrading the program centrally. This is quicker and cheaper for developers.
Accessibility
You only need an internet connection. Users access tools from any location on any compatible device, and most SaaS is available pay-as-you-go: no hardware, no paying for unwanted features. Users have far more control than under traditional licensing.
Business efficiency
Many traditional tools have migrated to SaaS, including ERP systems. A SaaS ERP is far more collaboration-friendly because employees across locations and departments access it from anywhere: private email, automated sign-up for company data, shared document management, shared dashboards and calendars.
Investing in SaaS gives brands the ability to grow their own online communities. Users reward convenient solutions with loyalty. To learn more about SaaS development, see our Ruby on Rails development services or contact Webtales IT Solutions for a free consultation.
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