Software-as-a-Service (SaaS) is a cloud-based software application that users access via the internet. With this platform, users no longer have to purchase expensive software nor download them to their desktop, laptop, or computer network after a costly one-time purchase. The software application could be anything from a gaming software to a business application.
The WHYs of Saas
A software subscription offers a number of advantages and some disadvantages as well. The advantages include on-demand accessibility even for smaller companies, lowering the cost of software, reduced time to install or configure programs, and applications. Cloud-based software does not take up space in the hard drive.
One strong benefit of using software-as-a-service is the ability to run a program on any operating system. It doesn’t matter if a user has a Mac, Linux, or Windows on his computer or is using Android or iOS on a smartphone, the application will still run and remain accessible. A software subscription is very versatile.
Today’s applications also need regular updates and patches. That’s another key advantage of an SaaS subscription – because they run in the cloud, a provider can update an application internally without adversely affecting businesses that subscribe to the software service. Traditional softwares require on-site installations and testing for updates and patches.
A SaaS subscription avoids the pitfalls of numerous testing and tedious updates that slow down the flow of business. It also reduces the need to hire a full-time IT or software engineer since a software service provides all the necessary updates and testing remotely. On-site software programs are vulnerable to attack and require constant monitoring and security by an in-house IT staff.
Another advantage of a software subscription is hardware, or the lack of it. By subscribing to a service, the cost of software is greatly diminished because companies no longer have to buy the program, they don’t need to invest in hardware, network switches or additional servers. Now, even small companies can afford to have the software applications they need to run a business efficiently.
A SaaS subscription is also scalable, a flexible plan can be customized depending on the number of users in a company. A package can be reduced or expanded without the need to buy more software or shelving hardware that are no longer needed. Traditionally, a new software would have to be purchased when a software application is needed on another computer.
The only disadvantage of this product-as-a-service is that it requires an internet connection to function but the increasing availability of broadband and hi-speed networks such as 5G make this less of an issue. Moreover, some providers offer software-as-a-service with an offline alternative that allows basic functionality without an internet connection.
The WHOs of Saas
Salesforce has the largest software subscription client base with 2.5 million users. The company makes $3.8 billion in revenue, charging $125 per user or $1500 per month. Salesforce was a pioneer in the SaaS industry having offered software as a service 15 years ago. It is a leader in CRM, a technology for managing a company’s relationships and interactions with customers and potential clients.
Oracle has about 400,000 customers, including all 100 companies of the Fortune 100 plus 300,000 medium-sized companies. They sell cloud-based applications instead of commodity hardware. They work with the public and retail sectors and recently provided sales reps on the go with voice recognition in their mobile sales app. They also have a pay-as-you-go software service.
Adobe has 2.3 million subscribers to their Creative Cloud and more than 2/3 of Fortune 50 companies use Adobe Marketing Cloud that include 17 of the top 20 Internet retailers, 10 top commercial banks, 5 of the topmost media companies and 5 of the best carmakers. Adobe’s cloud service caters to graphic designers, video editors, web developers, and photographers.
Microsoft is estimated to have 630 million users and has its SaaS apps installed in over a billion devices worldwide. Microsoft Office runs in the cloud and earns $1 billion per annum, with the Office software license operating in countless offices worldwide. With so many products across numerous categories in such a decentralized way, managing all its subscriptions is Microsoft’s main challenge.
CA Technologies’ subscription plans are used by over half of the Global Fortune 500, the 20 top global banks and the largest 25 state agencies. The company provides IT management customized to the user’s personality rather than a sophisticated technical app. It doesn’t require users to know code and updates spontaneously. Its simple software application targets small companies new to SaaS.
SAP has over 260,000 customers in 188 countries. Their client base consist of medium to large-scale businesses. SAP’s Business ByDesign is a software-as-a-service with a complete integrated suite that can run an entire business – its sales, financials, customer service, human resources, and supply chain. Their software service is ideal for manufacturing, professional services, and wholesale distribution.
Cobweb has 150,000 subscribers in 6,000 international businesses. Cobweb claims to be Europe’s largest provider of SaaS cloud solutions for business. Its mission is to put cloud-based communication in the hands of all businesses in Europe. Their flagship software service, Hybrid Lync, combined with Microsoft Office, intends to lower costs of calls and conferencing.
Mulesoft’s software as a service is used by more than 150,000 developers, over 3,200 companies in production and 35% of the Global 500. They provide an extensively used platform for connecting SaaS and business applications in the cloud and on-site. Walmart, MasterCard, Nokia, Nestle, Honeywell and DHL subscribe to their software services.
Akamai’s software subscription provides users with media content, cloud storage, distribution of data, transcoding services for video content, digital rights enforcement, and real-time analytics. Akamai has 160,000 servers in 95 countries with over 1,200 networks. One out of every three Global 500 companies subscribe to Akamai’s software-as-a-service.
Intuit has 4 million people subscribing to their software applications that provide fund management that help companies stay on top of their finances and save time with accounting tasks. Intuit developed a financial and tax preparation software called TurboTax. The company does not target large corporation but rather small businesses or individuals.
Software-as-a-service is one of 3 main categories of cloud computing in conjunction with Infrastructure-as-a-service (IaaS) and Platform-as-a-service (PaaS). SaaS providers usually price applications via a software subscription fee, like a monthly or an annual fee. The initial cost for a SaaS subscription is typically lower than the equivalent enterprise software.