Software as a service (SaaS) is a software
distribution model in which a third-party provider hosts applications and makes them
available to customers over the Internet. SaaS is closely related to the application
service provider (ASP) and
on demand computing software delivery models.
Depending upon the service level agreement
(SLA), the customer’s data for each model may be stored locally, in the cloud or both
locally and in the cloud. There are SaaS applications for fundamental business
technologies, such as email,
sales management, customer relationship management(CRM), financial management, human
resource management (HRM),
billing and collaboration.
Advantages
SaaS removes the need for organizations to
install and run applications on their own computers or in their own data centers. Other
benefits of the SaaS model include:
- Flexible payments
- Scalable usage
- Automatic updates
- Accessibility and persistence
Disadvantages
SaaS also poses some potential disadvantages.
Businesses must rely on outside vendors to provide the software, keep that software up
and running, track and report accurate billing and facilitate a secure environment for
the business' data.
Issues can arise when providers experience service disruptions, impose unwanted changes
to service offerings, or experience a
security breach, all of which can have a profound effect on the customers' ability to
use SaaS offerings. To proactively mitigate
these issues, customers should understand their SaaS provider's service-level agreement,
and make sure it is enforced.