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Software as a Service (SaaS) - What is it and what are its advantages?

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Estimated reading time: 6 minutes

You've probably wondered about Software as a Service (SaaS) - what is it and what are its advantages?

In today's world, where words like digital transformation and Industry 4.0 are the order of the day, people are starting to be familiar with or want to know about the different ways in which their companies can make use of these technologies. People are starting to be familiar with or want to know about the different ways in which their companies can make use of these technologies.

An important family to know and use are the technologies as a service: infrastructure (IaaS), platform (PaaS), desktop (DaaS), datacenter (DCaaS) and of course, Software (SaaS). 

What is SaaS? 

Software as a service, or SaaS for short, is a type of software licensing and delivery. On your computer you usually have a specific application (software) that you use, in the past this software was always installed on a local server in your company and web services were configured to access this server and run your application on your computer. Now, the difference is that SaaS uses the internet to give you access to this software.

Not everything that is a subscription is SaaS, only what is delivered to you by a tool that is delivered through a web interface or a mobile app. It's new because in the past you had to buy physical servers and install them locally for it to work.

The customer typically pays for its use through monthly and/or annual subscriptions, which allow the customer to make use of the software and its support for as long as the subscription is valid.

Typically, software as a service is supported by cloud infrastructure, so all you need to access it is an internet connection and your browser.

Why prefer Software as a Service (SaaS)?

Software as a service has for both end-consumers and organisations great advantages over software purchased and used in the traditional way. That is, installed on the customer's own infrastructure and with perpetual payment for its use. Here are 9 reasons why SaaS is preferred and the advantages of SaaS:

OPEX vs CAPEX:

By having a business model that is considered as a rent, its payment becomes an operating expense (OPEX) and not a capital expense (CAPEX), which allows it to be fully tax deductible in the year it is used and paid and does not cause depreciation. You use the tool to deliver value to your company, which becomes an operating expense and allows you to be more tax efficient.

2. VALUE FOR MONEY

Instead of having thousands of dollars to invest in servers, operating system licensing, software configurations, one can pay a lower value each month for and not have to spend a mountain of money today, making the company's working capital more efficient. This allows the monthly or annual values paid for the use of the software to be increasingly lower and more flexible for the customers who make use of them.

3. MASSIFICATION IN ITS USE:

Because of the technology involved, SaaS solutions have significantly lower costs vs. traditional developments. Therefore, they allow small and medium-sized companies to access robust technology without making large investments of money or specialised equipment to do so.

4. IMPLEMENTATION TIMES:

Software-as-a-Service implementation times are much shorter than traditional software, as they are usually ready to be used by the customer today, including the physical infrastructure that supports them. They do not require infrastructure purchases, import lead times, or installation of additional hardware, software and configurations. Although in some cases customisation or parameterisation time is required for each individual customer, it will never be as long as developing or installing custom software from scratch in your own company.

You also reduce the risk that the project will not deliver the expected results, that it will not be successful, because buying servers, installing them, configuring the solution and spending a long time implementing it means that you are responsible for the success or failure of the project. When contracting a SaaS, the onus is on the provider, because if the implementation is not simple, not easy to use and does not deliver the expected value, you can stop the subscription and look for someone who offers a similar solution without the significant upfront investment by doing an in-house implementation.

5. MAINTENANCE, UPGRADES AND NEW VERSIONS:

In SaaS solutions, the costs and maintenance tasks are assumed in their entirety by the solution provider. Offering not only a reduction in costs of these activities versus if you had to perform them in your own company, with your own infrastructure and staff. But they guarantee high availability, in its stable and functional version for you to simply use. 

Likewise, in the software-as-a-service modality, its manufacturers are constantly making improvements, updates and releasing new versions, which are included in the subscription price. This generates less costs, downtime and human resources than the traditional model, in which upgrade packages usually have to be purchased, installed and specialised services have to be purchased or paid for.

Icon Datup BigData as a Service Platform
6. SCALABILITY AND INTEGRATION:

Given the cloud environment that SaaS solutions support, it is possible for SaaS solutions to grow in capacity dynamically only when required. By making use of increasingly better and optimised resources offered by cloud providers. They can also be integrated with other software or applications more quickly than with on-premise infrastructures.

7. REDUCTION OF PROCUREMENT RISKS:

When SaaS solutions are used, the risk of acquisition and depreciation of the software is eliminated, since if the client is not satisfied with the solution, in many cases they can ask for their money back or simply cancel the subscription and no longer use it. Also, if changes are required in the software plans that are being managed, these are allowed, allowing the company to expand or reduce capacity, according to their needs and specific situations.

8.DECREASE OF TIME IN LEARNING CURVES :

SaaS tends to have a lower learning curve than traditional software, making adoption within client teams much easier. Similarly, the fact that solutions can be used more quickly and without involving development or implementation by teams means that companies can focus on their core business and not be distracted by support activities that diminish their concentration and productivity.

9. EASE OF USE

As mentioned before, SaaS solutions are usually turnkey solutions, which allows the customer to access them only by using an Internet connection. Additionally, in order to maintain this facility, the different providers make use of best practices for their development, guaranteeing the use of industry standards and updating them in their new versions or updates.

We hope you are encouraged to learn more about solutions as a service, and above all to try them out. There are infinite applications and solutions in this modality, ready for you to use them within your company and take advantage of their benefits.

We invite you to learn more about our Supply Chain solutions. If you have any questions or want to know more about how we transform data into savings, please do not hesitate to contact us.

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