Definitions: SaaS

Definition

SaaS stands for software as a service and basically means that a software vendor provides a business with licenses for an application to be used on demand for a specified time period. The customer may download the application to his or her own servers or computers or the software vendor can host the application. Either way, the application is generally available for use by the customer as needed until the end of the specified contract date.

Applications offered via SaaS allow more than one customer to use a shared data model, which is different than the application service provider (ASP) products. Also, software vendors who offer SaaS achieve greater efficiencies in the deployment and management of such software.

Software vendors provided on-demand products long before the term “software as a service” was coined. As early as 1999, companies were able to use applications in this way; however, in late 2000, the term had become popular and the acronym “SaaS” followed in 2001.

Business Applications

SaaS allows businesses to gain rights to applications and software for use without the costly need to purchase licenses for every device. Customers pay for each application on a per-user basis. This also allows small and medium sized companies to provide users with the same applications and tools that the larger businesses use.

Also, business users of SaaS applications do not need to download patches or upgrades to the software because the software vendor centrally performs such updates. This is attractive to many smaller businesses, because fewer internal IT staff are required to manage applications and upgrades for end-users.

But companies and enterprises of all sizes have begun embracing SaaS. Reports in 2009 have shown that nearly one third of retail companies use a form of SaaS for Web commerce.

Concerns

One of the main concerns about using SaaS is that since the applications are generally Web accessible, if Internet connectivity goes down, users cannot access the software. However, reliable Internet connectivity is more the norm these days, so many companies do not fear possible downtime with SaaS implementations.

Another concern with SaaS, though, is security. Companies such as Trend Micro and McAfee have begun to offer “security as a service” products to help companies provide the service in a more secure environment.

Other issues with SaaS involve implementation problems. In many organizations, SaaS may be implemented without the involvement or help of the IT staff. Also, system upgrades, API changes, and SaaS updates can all affect the SaaS implementation, and sometimes the cause of problems can be difficult to pinpoint.

Technical Details

When implementing SaaS architectures, each can be classified in one of the following four levels:

• Level 1—Ad-Hoc Custom where each customer hosts its own version of the application.
• Level 2—Configurable level provides flexibility via configurable metadata.
• Level 3—Configurable, Multi-Tenant-Efficiency provides a single program to serve all customers.
• Level 4—Scalable, Configurable, Multi-Tenant-Efficiency provides a multitier architecture to allow for scalability among servers.