SaaS: Everything You Need to Know About Software As a Service

SaaS: Everything You Need to Know About Software As a Service

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You’ve probably used cloud computing, and some SaaS in your personal or professional routine and are familiar with some tools related to this technology.
 
As the trend is for these solutions to grow and gain even more market share, we decided to prepare a very complete article to better explain what Software as a Service (SaaS) is, its benefits, the differences between other models, the infrastructure required and other issues.

What is SaaS?

SaaS is the acronym for Software as a Service.

In this model, the system is not marketed as a product, but as a service, as the name suggests.

Thus, no program is installed on your equipment and applications are used over the internet.
 
There are free versions (like Gmail) and paid versions (like Office 365), which cater to personal and professional routines.

This means that companies can now count on management systems in the cloud and on a customized solution, according to the needs of the business.

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Once the purchase is made, the software can be used from anywhere, at any time, using various gadgets — computers, notebooks, tablets, and smartphones, for example — as long as you have internet access.

In addition, it is worth remembering that, in this way, the customer pays for the subscription of the service offered (access) and not for a product, which eliminates the cost of acquiring licenses.
 
Therefore, we can say that a SaaS solution meets the most varied objectives, from a simple use as a personal email to the possibility of managing a company’s operations, such as ERP systems (which allow integrated management), CRM (oriented for customer management).

Among the main examples of the available and most popular SaaS, we can mention:

1. Dropbox;
2. Google Drive;
3. Salesforce;
4. Google Analytics;
5. Zendesk;
6. Netflix;
7. Paypal.

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Advantages of SaaS

Companies that provide SaaS solutions have gained more and more prominence, mainly due to the benefits they provide for companies of different niches and sizes.

In the following topics, we will talk more about these advantages.

1. Cost reduction

As with SaaS, the contracting party does not have to pay for a purchased license, paying only for a monthly subscription or for the services they actually use, the cost of investing in technology becomes lower.

In addition, the amounts paid are predictable, which helps to improve the financial planning in the medium and long term as well.

2. No need to rely on a complex infrastructure

The system is hosted in the cloud, and this allows the need for infrastructure to be reduced considerably.

In other words, this technology eliminates the investment in servers, maintenance, and direct IT staff, among other resources that would be necessary to ensure the proper functioning of the tools.
 
Thus, it is possible to save space and money, while the worry related to updates, backups, hardware, and other points passes to the service provider.

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3. Focus on core business

When you hire SaaS and stop worrying about activities related to infrastructure, attention and investments can be directed towards the core business of the company, increasing the chances of results being more satisfactory.

4. Remote access

As the system is hosted in the cloud, it can be accessed anytime, from anywhere.

This is especially important in cases where you are dealing with external teams or with professionals who work while traveling.

Thus, by having access to a computer and the internet, the company gains in mobility and provides greater practicality and agility in the execution of tasks.

5. Ease of upgrade

Updates and improvements are the responsibility of the supplier company, and the main advantage of this is that it is not necessary to download any application — or even a new installation.

Upgrades are done in the cloud, without harm to operations.

What is the difference between SaaS, IaaS, PaaS, and HaaS?

In addition to SaaS, there are other acronyms that also involve making technological resources available as a service through cloud computing.

We will explain each of them in the following topics.

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1. SaaS-Software as a Service

As we know so far, SaaS is a model of software sold as a service and is not tied to the acquisition of licenses.

Payment can be made through subscriptions or according to the services that are actually used.

Because it is a more flexible model, it is possible to acquire and control the necessary functionalities better, and this is one of the reasons why the system costs less for the company.

A good example of this is the packages or plans offered, from the simplest to the most complete – each one of them seeking to meet the different demands of different businesses, with the price varying from one to the other.

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The main features of SaaS

1. Access to the software is entirely via the internet;
2. Corrections and updates are made by the system vendor;
3. Possibility of external integrations through APIs, or Application Programming Interface;
4. Pay-per-use, not per-license;
5. Centralized application management.

2. IaaS-Infrastructure as a Service

IaaS was formerly known as HaaS—or Hardware as a Service.

In it, instead of your company’s needing to invest in the acquisition of infrastructure items, such as routers, servers, and racks, among others, the contracting is done through services, with virtual servers.
 
Here, the charge is made considering the use of certain points, such as the number of contracted virtual servers, the amount of data stored, the amount of data trafficked, among others. An excellent example of this model is IBM.
 
As in the case of SaaS, payment can be made through subscriptions or by the service used (pay-per-use).

That is, if in one month your company uses 5 servers and in the following month it needs to use only 3, the value paid will also decrease, as the need has reduced.

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Key features of IaaS:

1. Cost may vary according to use (depending on the contract signed);
2. Infrastructure is contracted as a service, not as a product;
3. High scalability.

IaaS Ratings

IaaS has 3 distinct classifications, they are:

2.1. Public cloud

In this case, the infrastructure is made available through internet access with shared resources.

2.2. Private Cloud

It has the same characteristics as the public cloud.

However, the environment is a private network, which is normally located in the company’s own datacenter.

In this case, only the organization’s servers have access to them, ensuring a higher level of privacy and security.

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2.3. Hybrid cloud

Hybrid cloud is a combination of public and private clouds, providing the best of both.

3. PaaS — Platform as a Service

This model is like a middle ground between SaaS and IaaS and provides a cloud environment that enables the development and deployment of simple applications as well as more complex enterprise software.

The necessary resources can be purchased through a cloud-hosted service provider and accessed via the internet.
 
As in the case of IaaS, Platform as a Service provides infrastructure, such as servers, networks, and storage, but also provides tools aimed at development, BI (Business Intelligence), and database management systems, among others.

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The purpose of this model is to fully support the application, from the build phase to periodic updates.

It avoids the expense of purchasing licenses, in addition to other resources.

In this way, the company is responsible for managing the services and applications, and the contracted provider manages the rest.
 
Ultimately, PaaS provides a flexible platform, but, at the same time, robust enough for organizations to develop their own applications based on language, framework, or any other technology.

In addition, it allows the use of a suitable infrastructure for the applications.

Microsoft Azure is an excellent example of how this type of service works.

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Key features of PaaS

1. Offers scalability at all stages of development;
2. Integration with databases and web services;
3. Integrated security;
4. Favorable environment for test development routines and implementation of the developed solutions.

At the end of the day, we can say that the differences between SaaS and PaaS are small.

To summarize, in the first case, applications are provided in the cloud, while, in the second, the platform on which applications will be developed and made available in the cloud is provided.

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Considering some basic criteria, we will better explain the scope of the models in each of these aspects:

1. Datacenter physical plant: IaaS, PaaS and SaaS;
2. Network security: IaaS, PaaS and SaaS;
3. Servers and data storage: IaaS, PaaS and SaaS;
4. Operating systems: PaaS and SaaS;
5. Development, database and analysis tools: PaaS and SaaS;
6. Hosted applications: SaaS.

How do you know if your software is a product or a service?

Software as a Service provides some technology that is paid for on a regular basis—which can be monthly, annually, or other forms of payment. SaaP (Software as a Product) is sold through the purchase of a license and, in some cases, there is still a fixed price.
 
The main difference between the two situations is precisely the license, which is considered a product.

From the point of view of the Internal Revenue Service, in SaaS, the contracting party pays only a fee, resulting from the use of the software, which makes it a service.

Differences from the legal point of view

When payment is made through fees, monthly fees, or any other way that guarantees the use of the software, commercialization is considered a service and, due to this, the differentiation between SaaS and SaaP is reflected in the collection of taxes.
 
Thus, SaaS, as a service, is subject to the Tax on Services of Any Nature (ISS).

The rate of this tax, according to the law, cannot exceed 5% of the invoice value.
 
On the other hand, the SaaP is charged the Tax on the Circulation of Goods and Services, a rate that can reach up to 18% depending on the state.
 
Thus, it can be said that, from the supplier’s point of view, offering software as a service is more advantageous than as a product.

However, it is necessary to pay attention to how the contract is signed, so that the collection is adequate and the company is not subject to fines and other sanctions.

From the contractor’s point of view, this difference is reflected in the price of the contracted system, which ends up being lower in SaaS.

This is a factor that further contributes to the technology becoming more accessible to small and medium-sized companies — while in traditional systems, due to the high cost, implementation is more restricted to large organizations, due to budget issues.
 
Another point that can help in differentiating between products and services is to assess the level of customization adopted in the sales that are made.

If the software is offered according to the specific needs of each customer and the supplier is responsible for the hardware structure (which guarantees the system’s operation), it is very likely that it is a SaaS.

What do you need to know to work with SaaS?

As it is a relatively new technology, software hosted in the cloud can still generate some distrust in managers.

In addition to the advantages that SaaS can provide for the company, we will clarify other points about the system in the following topics.

How to choose the best solution?

Before implementing a system in the cloud, it is necessary to know your business well and what its needs are.

In addition, intensive work with the HR team is also required to address the resistance to change that employees may present.
 
In order to choose a suitable application, it is necessary to know if the offered solution fits the business requirements and work processes. Identify the key processes and which flows need to be addressed by the system implementation.

Meet the suppliers

Try to get a quote from at least 3 suppliers.

This helps you identify which solution best fits your business needs.

In addition, market research, references from other customers, and knowing the developer company well are some of the points that should be taken into account.

Identify the possibility of personalization

Knowing your business, it is very likely that when negotiating for software, you will identify the customization needs, so that the features really meet your working methods.

See if the provider allows the modification of some parameters and allows the customization of some functions and the users’ access level.

See what kind of support the vendor offers

This is one of the most important aspects, as it deals with the supplier’s attitude when the system fails.

The support provided must be explicit in the contract and must contain information on how to deal with the most routine situations, such as a simple call to a major unforeseen event.

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Therefore, some questions must be agreed upon, such as:

1. Is the support is in U.S. territory?
2. How will the call be answered?
3. What is the average response time?
4. What is the problem identification and solution model?

How to acquire and implement?

Once the service provider is chosen and the solution is contracted, implementation is simple.

In many cases, access is immediate and made by logging in with a username and password.

What is actually paid by the company?

Only the service that was contracted, that is, the plan-which can be monthly, half-yearly, or annually, among others – agreed with the provider.

Furthermore, all other technical aspects, such as support and updating, are the responsibility of the supplier.

Will the data be safe?

This is one of the main concerns related to SaaS, mainly because the system is hosted in the cloud and access is via the internet.

However, service providers guarantee data security, which is mainly done through encryption.
 
In addition, there is still the issue of access through username and password, and the supplier is responsible for backing up the information.

The great advantage of this is that this work is no longer done by your IT team, which can focus on other more strategic issues.

If the company grows, does it need to change systems?

Many solutions available on the market offer scalability.

This means that, as your business grows, the system has the flexibility to adapt to greater demands and even to upgrade and provide new functionality—which can happen when you go from a basic plan to a master, for example.

Is there any guarantee of software availability?

Despite the possibility of unforeseen events occurring in any operation, the risk of the system being down exists, but your company will always be protected in these situations when an SLA agreement is signed—the service level agreement.
 
This means that if the supplier commits to delivering a high SLA, it is a sign that the software is stable, transmitting greater reliability to the service.

Can access and security levels be adopted?

Yes, this is especially important when there is a clear definition of information security, that is, each hierarchical level receives a type of access.

In addition, departments and branches will also have access as defined by the IT team.

Where is the data stored?

There is a possibility that the servers are in your country or located abroad.

The Internet Law does not determine that data must be stored in your country, but mentions that, regardless of where the server is, it must comply with your country’s laws.
 
This law also requires records to be kept for at least one year, if the courts request the information.

If your company’s field of activity has specific legislation, the ideal is to consult the legal department to find out about any obligations when choosing the application.

What infrastructure is needed?

From the provider’s point of view, there is a responsibility to manage the hardware infrastructure — such as servers, platforms, and applications — and ensure the availability of the contractor’s software and data.
 
From the customer’s point of view, the only infrastructure needed to implement the system is the use of computers and access to a quality internet service.

This is one of the reasons why this model is called Software as a Service, since several services are aggregated in order to simplify the routine of the contractors as much as possible.

Thus, the user does not pay more to acquire the tool, and the cost and implementation time are reduced when compared to traditional systems.

As we can see, Software as a Service is a system model that is hosted in the cloud.

Due to several factors, the acquisition cost has become lower, allowing several businesses to have the opportunity to automate their routines and take advantage of the benefits that investment in technology brings to the organization.

Due to the lower cost and the other qualities that SaaS offers, it can be said that the trend is for companies to increasingly adhere to this technology, adhering to digital transformation.

From the developers’ point of view, it is a promising option, with the possibility of closing several deals.

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Conclusion

Well, that’s it. We’ve got to the end of our article: SaaS – Everything You Need to Know About Software As a Service.

We hope that you enjoyed reading this article and got some helpful advice from it.

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