Unraveling SaaS

Earlier this week, I was fortunate to be teamed up as an official blogger/social media evangelist for EMERGEOUT conclave, the annual event organized by NASSCOM at N. Delhi. The theme was – The Future of Software as a Service and Cloud Computing. Dr. Sridhar Vembu, CEO - Zoho Corp. delivered the keynote wherein he shared his insights on how and why shall cloud computing change the way we do businesses.

The advent of internet (more importantly broadband), and its extensive use in day to day life gave birth to the concept called Cloud computing. Cloud computing can be described as a dynamic way of computing over the internet where the resources are virtual to the user. This concept is a boon for many Small and Medium-sized Businesses (SMBs), for the reason that they are able to avail software and hardware services without actually having to buy or maintain the entire setup.

We shall have a look towards Software as a Service model which is a part of cloud computing technology.

What is S-a-a-S?

S-a-a-S is a software deployment model focusing on providing licensed services of an application to a customer as per demand. SaaS vendors make the application available to the customers over the internet which can be accessed through a web browser, ruling out the need to install a physical instance of the application on the customers PC.

Today, SaaS is a phenomenon existing throughout various market verticals. Predominantly used in the technological industry, SaaS has also spread its roots into other market verticals such as - Financial services, Media, Government amongst various others.

Here is a play out of the ticks and crosses of SaaS;

3 advantages of a S-a-a-S subscription

Cost effective – A lot of startups and SMBs face a problem of coming up with the implementation costs by buying a complete licensed application, which by itself would bulk up the expenditures. SaaS helps them with it’s pay-as-you-use and use-as-much-you-need approach, hence reducing the setup and maintenance costs. This also trickles down to the fact that the company would have a faster on-boarding and access to the latest technology. If at any point the company decides a change in focus or direction, there is always the flexibility of terminating the service from the vendor or upgrading the current plan.

Multi-tenant Architecture – It’s like a multi-story housing society which houses studio appartments for students and the top floor has a penthouse for one who’s graduated to house himself in! They all however enjoy the common resources alike - lifts, water supply, broadband connection and more! As a distinct feature of SaaS, there is a single underlying application code, which is made accessible to any number of customers with each one able to apply a desired customization to meet specific requirements, without making any changes to the base code of the application. This architecture also ensures a single update to the application to reflect across all the customers.

Easy to maintain – Local installation of an application would require a dedicated IT team maintaining the application, adding to the capital investments. This would be taken care of by the vendor providing the service for monthly monetary benefits.

Grey areas of S-a-a-S

SaaS does not always fit the bill with all types of business needs. The cost-effectiveness of SaaS may have to be revisited in such situations.

Integration issues – Businesses today require a lot of inputs from various sources which typically range over multiple applications. This means integration of multiple applications sufficing different business needs. SaaS may fall short in such conditions as the model is fairly inclined towards isolated working of applications.

Security – There has always been a hype about implementing SaaS in context with the reason that it results in confidential company data to be exposed to the vendor. There would be a mutual company code which forbids the vendor from revealing data to any outsider. But there is a need to monitor the channel of communication through which the application is accessed over the internet, and also implementation of data encryption adds to the ballooning of costs incurred.

Pricing – SaaS vendors charge the customers based on the type of services requested on a monthly or quarterly basis reducing the initial cost burden to a large extent. But in the long run this turns out to be a costly affair. And constant developments and customizations would only add to the costs.

It is clear that SaaS being helpful to many SMB’s is still not every business player’s cup of tea. Having said that, with more and more businesses adopting the outsourcing model, SaaS would come across as an attractive prospect. But like any other business decision careful analysis is required before implementing SaaS to determine the productive values that could be derived through it.