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Software as a service became prevalent with the ubiquity of the Internet, which shifted software vendors' focus from selling packaged software and support to providing online services and usage-based subscriptions. Today, some of the largest and oldest software companies, such as Adobe, Microsoft and Oracle, use software as a service subscriptions to generate a significant portion of their revenue.
However, before deployment, organizations should weigh software as a service (SaaS) pros and cons and determine how they will affect the current IT landscape, which probably includes a mix of owned and hosted data center hardware.
What is SaaS and how does it affect IT?
SaaS -- considered one of the three major categories of cloud computing, alongside infrastructure as a service and platform as a service -- is the software equivalent of renting instead of buying. Like the landlord of an apartment, the SaaS provider takes care of necessary repairs, such as upgrades and operating the infrastructure, as well as routine maintenance like security patches and performance tuning. The SaaS user is responsible for the "interior decorating" and operations, including software customization, adding users and controlling security privileges. Just like renters, SaaS users have little to no say over the fundamental design and construction of the infrastructure or software platform.
For IT organizations, the fundamental tradeoff with SaaS is convenience versus control. The quick setup of an administrative account and billing information is all it takes to deliver ready-to-use software. This is in stark contrast to the traditional application delivery process, in which IT purchases, installs and operates servers, storage and even the data center facility to host enterprise software. IT also has to buy, install, configure and manage the application itself.
SaaS pros and cons
Although the inherent qualities of SaaS and the contrast to traditional packaged software are relatively simple, the implications for IT touch almost every corner of the organization, including operations, budgets, employee skill requirements and relationships between IT users and lines of business. SaaS shifts IT's primary role from operations to facilitation. While that translates to a smaller capital budget and likely lower headcount, it allows IT to move up the value chain and focus on building business-specific applications, software customizations or add-ons. It also frees up resources for new development projects. However, weighing SaaS pros and cons requires a deeper look at what it can do for IT.
The SaaS operating model provides key benefits to IT organizations, including:
- Outsourcing and eliminating routine IT activities which provide no differentiating value to the organization, such as the delivery of commodity services.
- Reduced time between making a purchasing decision and deriving actual business value from software. With Saas, this is measured in days, not months. Likewise, IT can deploy new features without a lengthy upgrade project. Instant service delivery and the low cost of entry make SaaS the most convenient way to prototype and test new software.
- Users can access SaaS applications anywhere they have an Internet connection, without requiring additional network security design and dedicated enterprise virtual private networks.
But despite these benefits, SaaS isn't without its drawbacks. These include:
- The remote availability of SaaS applications can impede organizations without robust, scalable wide area networks to major locations. Network bottlenecks become particularly acute for applications that move a lot of data, like databases, data warehouses, technical computing and video processing.
- Since SaaS is hosted on remote, shared systems, its performance varies depending on users' activity and the provider's network and ability to dynamically scale capacity in response to rapid growth or temporary load spikes.
- SaaS users have no control over operational details, including infrastructure backup, disaster recovery and security policies. This has traditionally been the biggest hang-up for most IT organizations, although the rapid growth and maturation of cloud infrastructure mitigates most of these concerns. Most cloud operators provide greater security and reliability than the average enterprise deployment.
- SaaS users have limited to no control over application specifics, such as versions, supported features and optional add-ins. This can make it difficult to integrate SaaS products with existing on-premises applications and data sources, or with other SaaS products. For example, it might be difficult to connect an online customer relationship management (CRM) product with a SaaS email and collaboration system.
With such a wide breadth of characteristics across cloud computing models, every organization must choose wisely, depending on its needs. While some cloud models are useful for custom app development and IT productivity, others work well for flexible infrastructure. Learn about all three services before committing to one.
SaaS examples and implications for IT
SaaS examples prove the technology can be a powerful tool for IT organizations to increase efficiency, reduce expenditures and shift focus to strategic, revenue-generating opportunities.
SaaS is best suited for commodity apps like email, group collaboration, file sharing, office productivity and expense reporting. SaaS also works well for established back-office categories like CRM, HR and project or budget tracking that require limited or easy customization. It also allows IT to evaluate, test and prototype new apps and services, especially if the target customers are remote and use a mobile device.
SaaS isn't optimal for new applications that require or replace existing applications with a high level of customization. These include back-office functions that pull data from many different databases or that feed information to numerous internal systems. Although it's possible to build complex data collection and transformation chains using SaaS apps, it adds complexity and mitigates some of the SaaS cost and convenience advantages. Examining the SaaS pros and cons is an integral step to make the right choice for IT.
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