What is Software-as-a-Service? And what does it mean? If the software is a service, what kind of service is it? Is software as a service a good thing or not? If software is not a service, what can it be, that is, what kind of product can it be?
This content is placed in the category of website design articles. But in this content, I am not going to talk about programming language or website design! Why? Because not only programming languages are important in web design. A website designer is a product designer. A web designer usually designs websites for businesses. So, it can be said that the designed website should sell or be designed to sell. Sometimes the specialty of a business is designing and selling a website, application or software.
So, website designers for web design and developers for application and software design need much more than programming languages. In order to succeed in web design, in addition to following the news of the technology world and knowing about programming languages and frameworks, he must also follow the news of the technology business world and market trends carefully. He should be aware of new approaches and philosophies, such as PWA, in website (product) design.
The prevailing approaches and currents in the design of any product, including digital product design, are important because they show the market need and what the employer (business) is looking for. That is, if a digital product such as a website or software is designed without considering the needs of the market (users), it will not be successful. Software as a service is one of the most important trends (models) in the design of software and web applications in recent years.
In this content, I discuss SaaS and its importance and answer the questions posed at the beginning.
Table of Contents
What is software as a service or SaaS?
Software as a Service is compared to Software as a Product or SaaP. Make no mistake, software as a service is still a product. The main difference between the two types of products is what the user buys and how to pay for it.
Software is designed and developed by different companies. The first Microsoft Office was just an idea. An idea developed using programming languages C#, C, JavaScript (JS), TypeScript (TS), Python, Ruby, etc. It means that Microsoft has spent a lot of money to make office software. And it still costs money, because the software must be updated regularly. So, Office belongs to Microsoft Company just as Benz cars belong to Benz automobile company.
The software manufacturing company issues a license for each software to show its ownership and to preserve the material and intellectual rights of the product in the market. It can also prevent its illegal reproduction and distribution. When the user buys the software, he actually buys the license (use) of the software along with a copy of it to install on his device. Also, when the manufacturer company updates the software version, the user pays less and buys the updates.
But a company may not want to sell the software license to the user and choose another model to design and supply the software to the users. A model in which the user buys the right to use the functions of the software monthly or annually instead of buying a software license and installing it on his device. The owner of the software gives the buyer a username and password, and every time he wants to use the software, he enters the site from the browser. Dropbox and Trello are two software that are offered and sold under the software-as-a-service model.
What are the advantages and disadvantages of SaaS?
What were the flaws of software as a commodity that forced companies to use another model? This question can be asked in another way: What are the advantages of SaaS that made software companies think of selling subscriptions instead?
Software as a service is so popular, practical and profitable that some businesses and startups specialize in designing and developing different types of SaaS. Some companies have also changed their products from software as a product to software as a service. First, we list the features and advantages as well as the disadvantages of the software offered as a service, and then their types.
Features and benefits of software as a service
- The software is not installed as a service on the user’s system or the company’s central server. Because that web application works with cloud space and cloud storage (Cloud Computing), it is usually stored and maintained on the server and database of the software manufacturer or another cloud server provider. The user only needs internet to access it. So, at any time and place and with any device, he can easily access the software through the browser.
- The manufacturer maintains, diagnoses and updates the SaaS itself. Therefore, the user does not need to do anything. Even the software does not occupy space on his device. If the user has a problem working with the software, it is enough to ask the support of the company to fix it. This advantage makes software as a service ideal for businesses (companies whose employees work with that software). Because the company does not need to pay a fee to fix the defects of the software that is installed on the company’s systems.
- Each user has the possibility to customize the software as a service according to their needs and budget. The developer of the software also provides the level of access that the user needs. Let me give an example. I have a small business and I use Trello software to manage the projects and tasks of my 15-person team. Trello has given me 4 choices (4 levels of access to functions and features of the software). And considering all the conditions, I chose the third option, the price of which is $10 per month or $10 per user.
Disadvantages of software as a service
Products that are offered with the software-as-a-service model are more affordable and flexible for individuals and businesses. But with all the benefits and significant market acceptance SaaS has shown, this product has its drawbacks. Among its most important disadvantages, the following can be mentioned:
- When the software is offered as a service, various technical problems may occur and prevent the user from accessing the site (software). Intermittent and slow internet speed, site down, server errors, hacker attacks on the site or server, etc. are among the problems that the user will not face if he buys the software as a product and installs it on his system.
- Securing the cloud space (cloud server) as well as the data that is stored in the cloud is one of the most important challenges of software that is offered as a service. For large companies that have several hundred employees who are users of those software and all the information related to the projects is stored in the web application, breaking into the site and stealing the stored information is a very serious threat.
- The user of the software as a service has no control over its updating. Any optimizations or updates are automatically applied to all subscribers to the product. A user may prefer the features that were in one version for various reasons. But he has no choice in this matter.
How many types of SaaS products are there?
The main expertise of some companies is designing, developing, hosting and maintaining products (software) that are offered as a service. Those businesses are called SaaS companies. Their customers are usually and primarily other businesses (B2B). Because businesses are looking for integrated platforms to manage different projects. Statistics show that the SaaS industry has a very good growth and profitability and will reach a value of $127 billion by the end of 2022. The tech giants Google and Microsoft both design and offer products as a service.
How many types of products do SaaS companies design? How many types of software are there as products and how are they classified? There are different categories of software that exist as a service in the market. For example, some grouped them by the criteria of goals and functions or how the software is priced. Next, the most common categories of SaaS products are explained.
- Packaged SaaS: This is a software product that provides the business with all the tools and solutions necessary to manage a specific process. The best example for this type is CRM or customer relationship management software.
- Collaborative SaaS: The software in this category is designed to help and facilitate teamwork and team member relationships. Google Docs is a web application that falls into this category. Trello is also a software as a group service.
- Technical SaaS: Software as a technical service provides a set of tools that business technical teams need to optimize development or manage technical processes. Cloudsponge is of this type. Cloudsponge is designed to help developers of e-commerce sites.
Where did the software-as-a-service model come from?
Now that it is clear what a software product as a service is and what types it has, it is better to briefly explain its history. Software as a service was born in the 90s. Of course, if cloud computing hadn’t been born in the 1960s, no company would have been able to offer software as a service.
Imagine not having to save anything on your computer (even videos and photos). Or you don’t need to use software or application or program, you must have your device with you. All you need is internet. Because you can access anything you want through the internet. That is, everything (sites and data) is stored in a space and not somewhere, which is accessed by the Internet, and this is the main idea of cloud computing and cloud services.
SaaS is also a subset of cloud services. Software as a service has another name: Cloud based Software. The first and largest company that launched the first cloud software in the world is called Salesforce. Salesforce produces nothing but SaaS products and is the first business in the cloud services industry to have $1 billion in revenue in 2009. This figure has reached 27 billion dollars in 2022.