Software as a service

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Software as a service (SaaS /sæs/ [1] ) is a software licensing and delivery model in which software is licensed on a subscription basis and is centrally hosted. [2] [3] It is sometimes referred to as "on-demand software", and was formerly referred to as "software plus services" by Microsoft. [4] SaaS applications are also known as on-demand software and Web-based/Web-hosted software. [5]

Contents

SaaS is considered to be part of cloud computing, along with infrastructure as a service (IaaS), platform as a service (PaaS), desktop as a service (DaaS), [6] managed software as a service (MSaaS), mobile backend as a service (MBaaS), datacenter as a service (DCaaS), and information technology management as a service (ITMaaS).

SaaS apps are typically accessed by users using a thin client, e.g. via a web browser. SaaS has become a common delivery model for many business applications, including office software, messaging software, payroll processing software, DBMS software, management software, CAD software, development software, gamification, virtualization, [7] accounting, collaboration, customer relationship management (CRM), management information systems (MIS), enterprise resource planning (ERP), invoicing, field service management, human resource management (HRM), talent acquisition, learning management systems, content management (CM), geographic information systems (GIS), and service desk management.

SaaS has been incorporated into the strategy of nearly all leading enterprise software companies. [8] [9] According to a Gartner estimate, SaaS sales in 2018 were expected to grow 23% to $72 billion. [10]

History

Centralized hosting of business applications dates back to the 1960s. Starting in that decade, IBM and other mainframe providers conducted a service bureau business, often referred to as time-sharing or utility computing. Such services included offering computing power and database storage to banks and other large organizations from their worldwide data centers. [11]

The expansion of the Internet during the 1990s brought about a new class of centralized computing, called application service providers (ASP). ASPs provided businesses with the service of hosting and managing specialized business applications, to reduce costs through central administration and the solution provider's specialization in a particular business application. Two of the world's pioneers and largest ASPs were USI, which was headquartered in the Washington, DC area, and Futurelink Corporation, headquartered in Irvine, California. [12]

Software as a Service essentially extends the idea of the ASP model. The term software as a service (SaaS), however, is commonly used in more specific settings:

The acronym first appeared in the goods and services description of a USPTO trademark, filed on September 23, 1985. [15] DbaaS (database as a service) has emerged as a sub-variety of SaaS, [16] and is a type of cloud database.

Distribution and pricing

The cloud (or SaaS) model has no physical need for indirect distribution because it is not distributed physically and is deployed almost instantaneously, thereby negating the need for traditional partners and middlemen. Unlike traditional software, which is conventionally sold as a perpetual license with an up-front cost (and an optional ongoing support fee), SaaS providers generally price applications using a subscription fee, most commonly a monthly fee or an annual fee. [17] Consequently, the initial setup cost for SaaS is typically lower than the equivalent enterprise software. SaaS vendors typically price their applications based on some usage parameters, such as the number of users using the application. However, because in a SaaS environment customers' data reside with the SaaS vendor, opportunities also exist to charge per transaction, event, or other units of value, such as the number of processors required. [18]

The relatively low cost for user provisioning (i.e., setting up a new customer) in a multitenant environment enables some SaaS vendors to offer applications using the freemium model. [18] In this model, a free service is made available with limited functionality or scope, and fees are charged for enhanced functionality or larger scope. [18]

A key driver of SaaS growth is SaaS vendors' ability to provide a price that is competitive with on-premises software. This is consistent with the traditional rationale for outsourcing IT systems, which involves applying economies of scale to application operation, i.e., an outside service provider may be able to offer better, cheaper, more reliable applications. [19]

Architecture

The vast majority of SaaS solutions are based on a multitenant architecture. With this model, a single version of the application, with a single configuration (hardware, network, operating system), is used for all customers ("tenants"). To support scalability, the application can be installed on multiple machines (called horizontal scaling). In some cases, a second version of the application is set up to offer a select group of customers access to pre-release versions of the applications (e.g., a beta version) for testing purposes. This is contrasted with traditional software, where multiple physical copies of the software — each potentially of a different version, with a potentially different configuration, and often customized — are installed across various customer sites. [20]

Although an exception rather than the norm, some SaaS solutions do not use multitenancy, or use other mechanisms—such as virtualization—to cost-effectively manage a large number of customers in place of multitenancy. [21] Whether multitenancy is a necessary component for software as a service is debatable. [22]

Characteristics

Although not all software-as-a-service applications share all traits, the characteristics below are common among many SaaS applications:

Configuration and customization

SaaS applications similarly support what is traditionally known as application configuration. In other words, like traditional enterprise software, a single customer can alter the set of configuration options (a.k.a. parameters) that affect its functionality and look-and-feel. Each customer may have its own settings (or: parameter values) for the configuration options. The application can be customized to the degree it was designed for based on a set of predefined configuration options.[ citation needed ]

For example, to support customers' common need to change an application's look-and-feel so that the application appears to be having the customer's brand (or—if so desired—co-branded), many SaaS applications let customers provide (through a self-service interface or by working with application provider staff) a custom logo and sometimes a set of custom colors. The customer cannot, however, change the page layout unless such an option was designed for.[ citation needed ]

Accelerated feature delivery

SaaS applications are often updated more frequently than traditional software, [23] in many cases on a weekly or monthly basis. This is enabled by several factors:

Accelerated feature delivery is further enabled by agile software development methodologies. [24] Such methodologies, which have evolved in the mid-1990s, provide a set of software development tools and practices to support frequent software releases.

Open integration protocols

Because SaaS applications cannot access a company's internal systems (databases or internal services), they predominantly offer integration protocols and application programming interfaces (APIs) that operate over a wide area network. [25]

The ubiquity of SaaS applications and other Internet services and the standardization of their API technology has spawned the development of mashups, which are lightweight applications that combine data, presentation, and functionality from multiple services, creating a compound service. Mashups further differentiate SaaS applications from on-premises software as the latter cannot be easily integrated outside a company's firewall.

Collaborative (and "social") functionality

Inspired by the success of social networking services and other so-called web 2.0 functionality, many SaaS applications offer features that let their users collaborate and share information.

For example, many project management applications delivered in the SaaS model offer—in addition to traditional project planning functionality—collaboration features letting users comment on tasks and plans and share documents within and outside an organization. Several other SaaS applications let users vote on and offer new feature ideas.

Although some collaboration-related functionality is also integrated into on-premises software, (implicit or explicit) collaboration between users or different customers is only possible with centrally hosted software.

OpenSaas

OpenSaaS refers to software as a service (SaaS) based on open source code. Similar to SaaS applications, Open SaaS is a web-based application that is hosted, supported and maintained by a service provider. While the roadmap for Open SaaS applications is defined by its community of users, upgrades and product enhancements are managed by a central provider. The term was coined in 2011 by Dries Buytaert, creator of the Drupal content management framework. [26]

Andrew Hoppin, a former Chief Information Officer for the New York State Senate, has been a vocal advocate of OpenSaaS for government, calling it "the future of government innovation." He points to WordPress and Why Unified as a successful example of an OpenSaaS software delivery model that gives customers "the best of both worlds, and more options. The fact that it is open source means that they can start building their websites by self-hosting WordPress and customizing their website to their heart’s content. Concurrently, the fact that WordPress is SaaS means that they don’t have to manage the website at all -- they can simply pay WordPress.com to host it." [27]

Adoption drivers

Several important changes to the software market and technology landscape have facilitated the acceptance and growth of SaaS solutions:

Adoption challenges

Some limitations slow down the acceptance of SaaS and prohibit it from being used in some cases:

The standard model also has limitations:

Healthcare applications

According to a survey by HIMSS Analytics, 83% of US IT healthcare organizations are now using cloud services with 9.3% planning to, whereas 67% of IT healthcare organizations are currently running SaaS-based applications. [35]

Data escrow

Software as a service data escrow is the process of keeping a copy of critical software-as-a-service application data with an independent third party. Similar to source code escrow, where critical software source code is stored with an independent third party, SaaS data escrow applies the same logic to the data within a SaaS application. It allows companies to protect and insure all the data that resides within SaaS applications, protecting against data loss. [36]

There are many and varied reasons for considering SaaS data escrow including concerns about vendor bankruptcy, [37] [38] unplanned service outages, and potential data loss or corruption. Many businesses either ensure that they are complying with their data governance standards or try to enhance their reporting and business analytics against their SaaS data. Research conducted by Clearpace Software Ltd. into the growth of SaaS showed that 85 percent of the participants wanted to take a copy of their SaaS data. A third of these participants wanted a daily copy. [39]

Criticism

One notable criticism of SaaS comes from Richard Stallman of the Free Software Foundation, who refers to it as Service as a Software Substitute (SaaSS). [40] He considers the use of SaaSS to be a violation of the principles of free software. [41] According to Stallman:

With SaaSS, the users do not have even the executable file that does their computing: it is on someone else's server, where the users can't see or touch it. Thus it is impossible for them to ascertain what it really does, and impossible to change it.

See also

Related Research Articles

An application service provider (ASP) is a business providing computer-based services to customers over a network; such as access to a particular software application using a standard protocol.

The term "software multitenancy" refers to a software architecture in which a single instance of software runs on a server and serves multiple tenants. Systems designed in such manner are often called shared. A tenant is a group of users who share a common access with specific privileges to the software instance. With a multitenant architecture, a software application is designed to provide every tenant a dedicated share of the instance - including its data, configuration, user management, tenant individual functionality and non-functional properties. Multitenancy contrasts with multi-instance architectures, where separate software instances operate on behalf of different tenants.

Appointment scheduling software or meeting scheduling tools allows businesses and professionals to manage appointments and bookings. This type of software is also known as appointment booking software and online booking software.

A virtual appliance is a pre-configured virtual machine image, ready to run on a hypervisor; virtual appliances are a subset of the broader class of software appliances. Installation of a software appliance on a virtual machine and packaging that into an image creates a virtual appliance. Like software appliances, virtual appliances are intended to eliminate the installation, configuration and maintenance costs associated with running complex stacks of software.

On-premises software

On-premises software is installed and runs on computers on the premises of the person or organization using the software, rather than at a remote facility such as a server farm or cloud. On-premises software is sometimes referred to as "shrinkwrap" software, and off-premises software is commonly called "software as a service" ("SaaS") or "cloud computing".

Platform as a service (PaaS) or application platform as a service (aPaaS) or platform-based service is a category of cloud computing services that allows customers to provision, instantiate, run, and manage a modular bundle comprising a computing platform and one or more applications, without the complexity of building and maintaining the infrastructure typically associated with developing and launching the application(s); and to allow developers to create, develop, and package such software bundles.

Cloud computing Form of Internet-based computing that shares processing resources and data

Cloud computing is the on-demand availability of computer system resources, especially data storage and computing power, without direct active management by the user. The term is generally used to describe data centers available to many users over the Internet. Large clouds, predominant today, often have functions distributed over multiple locations from central servers. If the connection to the user is relatively close, it may be designated an edge server.

Acumatica, founded in 2008, is a technology provider that develops cloud- and browser-based enterprise resource planning (ERP) software for small and medium-sized businesses (SMBs). The company is headquartered in Bellevue, WA.

Network intelligence (NI) is a technology that builds on the concepts and capabilities of Deep Packet Inspection (DPI), Packet Capture and Business Intelligence (BI). It examines, in real time, IP data packets that cross communications networks by identifying the protocols used and extracting packet content and metadata for rapid analysis of data relationships and communications patterns. Also, sometimes referred to as Network Acceleration or piracy.

Kaavo is a cloud computing management company. Kaavo was founded in November 2007 in the U.S. Kaavo pioneered top-down application-centric management of cloud infrastructure across public, private, and hybrid clouds.

In computing, data as a service, or DaaS, is a term used to describe cloud-based software tools used for working with data, such as managing data in a data warehouse or analyzing data with business intelligence. It is enabled by software as a service (SaaS). Like all "as a service" (aaS) technology, DaaS builds on the concept that its data product can be provided to the user on demand, regardless of geographic or organizational separation between provider and consumer. Service-oriented architecture (SOA), and the widespread use of API, has rendered the platform on which the data resides as irrelevant.

Customer data management (CDM) is the ways in which businesses keep track of their customer information and survey their customer base in order to obtain feedback. CDM embraces a range of software or cloud computing applications designed to give large organizations rapid and efficient access to customer data. Surveys and data can be centrally located and widely accessible within a company, as opposed to being warehoused in separate departments. CDM encompasses the collection, analysis, organizing, reporting and sharing of customer information throughout an organization. Businesses need a thorough understanding of their customers’ needs if they are to retain and increase their customer base. Efficient CDM solutions provide companies with the ability to deal instantly with customer issues and obtain immediate feedback. As a result, customer retention and customer satisfaction can show marked improvement. According to a study by Aberdeen Group inc.: "Above-average and best-in-class companies... attain greater than 20% annual improvement in retention rates, revenues, data accuracy and partner/customer satisfaction rates."

IBM cloud computing is a set of cloud computing services for business offered by the information technology company IBM. IBM Cloud includes infrastructure as a service (IaaS), software as a service (SaaS) and platform as a service (PaaS) offered through public, private and hybrid cloud delivery models, in addition to the components that make up those clouds.

Cloud computing architecture

Cloud computing architecture refers to the components and subcomponents required for cloud computing. These components typically consist of a front end platform ,back end platforms, a cloud based delivery, and a network. Combined, these components make up cloud computing architecture.

HP Cloud

HP Cloud was a set of cloud computing services available from Hewlett-Packard (HP) that offered public cloud, private cloud, hybrid cloud, managed private cloud, and other cloud services. It was the combination of the previous HP Converged Cloud business unit and HP Cloud Services, which is the OpenStack technology-based public cloud. It is used by enterprise organizations so they can combine public cloud services with their own internal IT resources to create hybrid clouds, or a mix of different cloud computing environments made up of private and public clouds.

Cloud-based integration is a form of systems integration business delivered as a cloud computing service that addresses data, process, service-oriented architecture (SOA) and application integration.

Cloud computing has become a social phenomenon used by most people every day. As with every important social phenomenon there are issues that limit its widespread adoption. In the present scenario, cloud computing is seen as a fast developing area that can instantly supply extensible services by using internet with the help of hardware and software virtualization. The biggest advantage of cloud computing is flexible lease and release of resources as per the requirement of the user. Other benefits encompass betterment in efficiency, compensating the costs in operations. It curtails down the high prices of hardware and software Although, there are numerous benefits of adopting the latest cloud technology still there are privacy issues involved in cloud computing because in the cloud at any time the data can outbreak the service provider and the information is deleted purposely. There are security issues of various kinds related with cloud computing falling into two broader categories: First, the issues related to the cloud security that the cloud providers face. Secondly, the issues related to the cloud security that the customers experience

Cloud management is the management of cloud computing products and services.

IBM Application Performance Management is an offering that enables IT operations and DevOps and personnel to detect, isolate and diagnose problems in their hybrid cloud development and production environments. The solution is part of the IBM IT Service Management portfolio, which is a key component of IBM Cloud solutions. The offering provides capabilities such as End User Management (EUM), Application Discovery, Application Diagnostics, Transaction profiling and IT Operations Analytics. IBM Application Performance Management solutions are available in both SaaS (software-as-a-service), hybrid and on-premises delivery models. IBM Application Performance Management was a part of IBM Tivoli brand until 2013.

Secure Access Service Edge (SASE) is a term coined by analyst firm Gartner, SASE simplifies wide-area networking (WAN) and security by delivering both as a cloud service directly to the source of connection rather than the enterprise data center. Security is based around identity, real-time context and enterprise security and compliance policies. An identity may be attached to anything from a person/user to a device, branch office, cloud service, application, IoT system, or an edge computing location.

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