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What Is SaaS? 10 FAQs about Software as a Service

Software as a Service, also known as SaaS, has taken the business world by storm since the onset of the novel coronavirus pandemic. However, SaaS is constantly evolving and advancing, with new tools and apps emerging all the time. It can be a challenge to stay up to date, so to lend a hand we’re breaking down the most common – and important – questions asked by SaaS rookies and veterans alike.

7 min read

Tatiana Ogurtsovskaia

Tatiana Ogurtsovskaia

Dec 08, 2021

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What Is SaaS? 10 FAQs about Software as a Service

SaaS tools and programs offer extreme flexibility and efficient scalability for business applications at small, midsize, and even enterprise companies.

Savvy companies looking to keep a leg up on the competition have been increasingly adapting their business and workforce to digitized models and leveraging emerging technology to improve profitability, productivity, and customer experiences.

Experts project the influx of new businesses seeking to modernize their operations and optimize their workflow with SaaS subscriptions will propel a staggering 21.7% growth rate in SaaS in 2022.

Advantages of SaaS

SaaS offers a variety of benefits to businesses of all sizes and industries. SaaS applications offer convenient operational management, seamless scalability, and secure data storage. Wide platform compatibility is another significant advantage of SaaS applications, especially with the dramatic rise in remote working arrangements.

SaaS tools also offer serious bang-for-your-buck, being both more cost-effective and powerful than most traditional business applications. Google Apps, Salesforce, Dropbox, MailChimp, ZenDesk, DocuSign, Slack, and Hubspot are all examples of popular SaaS solutions.

Top 10 FAQs about Software as a Service

1. What is SaaS?

SaaS is a popular form of software delivery that allows companies to enjoy unmatched application performance, better data security, and access to powerful servers without expensive hardware investments or increased maintenance costs.

SaaS companies are unique because they host and maintain their own servers, databases, and code. Unlike traditional software programs, this allows SaaS providers to efficiently manage their applications from a central location, without on-site visits or ongoing on-premise IT support.

SaaS applications are generally licensed on a subscription or pay-as-you-go model. This model has proven highly popular because it provides smaller companies access to cutting-edge software without cost-prohibitive upfront investments.

2. How long has SaaS been around?

The idea of computational power as a public utility has been around since at least the early 1960s. Unfortunately for early proponents, it took over thirty years for computer science and technology to catch up to the lofty goal of harnessing the power of shared servers, databases, and computers to push the bounds of digital possibilities.

SaaS finally made a splash in the late 1990s with the founding of Salesforce, which created a customer relationship management (CRM) platform that was the first SaaS solution to achieve rapid, sustained, and significant growth.

Salesforce continued to dominate the SaaS landscape until a new wave of SaaS companies began to gain traction in the 2010s.

Since then, the SaaS market has exploded with new players and consumer bases. Industry giants like Microsoft and Adobe have thrown their hats in the SaaS ring, alongside a plethora of smaller, more specialized SaaS companies and providers.

SaaS applications have also expanded tremendously in the last ten years, creating new opportunities for previously tech-averse companies to take advantage of the vast possibilities offered by SaaS solutions.

3. How does SaaS help businesses?

SaaS applications and tools hold a variety of advantages compared to traditional on-premises solutions. Some of these include:

Platform Accessibility - As companies around the globe continue to transition to work-from-home and hybrid word models, platform versatility has grown increasingly crucial for smooth business operations. SaaS solutions can be used across a variety of platforms, including Windows, Mac, Android, and Linux.

Seamless Updates - Updating SaaS programs falls squarely on the shoulders of SaaS providers. Their teams of expert data scientists and programmers work around the clock to eliminate bugs, improve user interfacing, and optimize software efficiency at their central headquarters. From there, they can securely upload security and version updates to millions of devices hosting their software.

Ease of Use - The best SaaS tools are designed to be implemented with minimal ramp time and used by consumers with little to no technical experience.

4. How can SaaS solutions save companies money?

Hosting, maintenance, and security are all included in SaaS applications, reducing in-house costs for users. The subscription-based model of SaaS applications and tools also presents a lower barrier of entry for small and mid-sized companies interested in modern software solutions.

SaaS applications also save companies money with reduced management costs.

Early iterations of business software were notoriously demanding. They required extensive on-site architecture and a dedicated team of talented IT professionals to manually manage programs and applications that were vital to business operations.

This was an error-prone and time-intensive process that required extensive resources and led to harmful downtime. SaaS solutions are entirely managed by their providers, eliminating the need for in-house solutions and significantly reducing the likelihood of unexpected software failures or downtime.

5. Is SaaS secure?

Contrary to popular misconceptions, SaaS solutions are typically more secure than traditional on-premise options.

PCI security compliance is a standard benchmark for reputable SaaS companies, and many take security precautions even further out of an abundance of caution and desire to stay competitive.

In fact, Gartner, the world’s leading IT research and advisory company, predicts that in 2022 95% of cloud security breaches will be due to user error. SaaS security has also advanced to the point of widespread public confidence, with 99% of organizations forecast to adopt one or more SaaS solutions by the end of 2021.

6. Is SaaS popular?

Successful companies have fought to stay on the cutting-edge of software technology since the late 1990s. And the tech boom has only steadily gained steam since then. Between 2015 and 2021, the average number of SaaS business applications used around the world grew an impressive 14x, or nearly 1,300%.

This exponential growth has resulted in the average organization employing over 110 SaaS solutions in its daily operations. Globally, businesses are forecast to invest over $480 billion in new and ongoing SaaS solutions in 2022.

7. Is SaaS customizable?

SaaS has become increasingly flexible, allowing modifications not only for unique business functions but also individual preferences and performance.

Leading SaaS solutions to allow user interface and dashboard customization as well as function settings that allow consumers to customize their software programs to their unique needs without additional coding or programming.

8. Who owns SaaS data?

Reputable SaaS providers will never seek to take ownership over any of your data stored on their servers. A standard service level agreement should reaffirm the customer’s ownership of their data as well as customers’ right to export their data and create local back-ups at their discretion.

However, not all service level agreements are made equal. Companies should be sure to carefully read all agreements before signing to ensure their rights of ownership are protected. SaaS providers should also have a contingency plan in place in the event of closure. This plan should clearly outline how customer data will be preserved, exported, and transferred to the original owners should their service shut down.

9. Is there a difference between SaaS and the cloud?

SaaS could be considered a subset of the Cloud.

The Cloud is a complex infrastructure of ultra-powerful servers, computers, and databases. The resulting computational power is then leased to consumers according to their unique requirements. The idea of scalable computational power was attractive to companies of all sizes, which led to the rapid development of the Cloud we know today.

The Cloud also allows applications, tools, and other software programs to be remotely hosted and delivered via an internet connection. This feature was pivotal to the expansion of SaaS solutions and providers. Software companies could suddenly deliver, install, manage, and improve their software from a single, central location without expensive hardware and other on-premise equipment.

10. How can I learn more about Saas?

SaaS is a rapidly growing field, with new innovations that optimize workflows to increase growth and profitability hitting the market almost daily.

To maintain a competitive edge, it’s important for business executives and leaders to stay up-to-date on the best practices, strategies, and solutions in their field. If your company is interested in modernizing operations with SaaS solutions, or if you’re a SaaS veteran looking to learn more, check out our resource center.

Conclusion

SaaS offers a new model for companies of all sizes to leverage powerful software in their daily operations. SaaS solutions reduce expenses, increase data security, and provide unmatched convenience and ease-to-use to your employees.

Combined with extensive customization options, wide platform compatibility, and consistent improvements and upgrades, it’s safe to say SaaS solutions are the future of modern business tools. If you’re interested in learning more about SaaS, reach out to one of our experts.

Inperium is a leading technology company that was founded with a mission to provide innovative and user-optimized software solutions. We believe software should be a joy to use and design our solutions to support the consistent growth of our clients while simultaneously improving workflows and enhancing employee productivity and experiences.

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