Software As A Service

Software as a Service is a software distribution model that differs from the licensing model. The software is not installed locally the user’s computer, instead you can use it via the Internet against payment.

How software as a service works

Software as a service (SaaS) is used when a service provider provides a software for use via the Internet. They run the necessary IT infrastructure, install and maintain the software on their own servers and handle any required updates.

Users don’t have to install the software on their computer. All you need is a computer or notebook with an installed web browser and Internet access in order to access the software. In return, you pay a usage-dependent fee. The software can only be used for the duration of the contract term. If the usage contract is terminated, you will no longer be able to access the software.

Software as a service application

One of the first and most popular implementations of software as a service was Salesforce.com. This is an Internet-based CRM solution, which is based on the principles of cloud computing. With a stock market value of more than 10 billion US dollars, the company is now one of the largest Internet companies in the world. In recent years, more and more software products have been converted into corresponding SaaS versions and are now available in different formats as a service. Examples of the use of software as a service in practice are:

  • Shop systems / e-commerce
  • Office solutions (word processing, spreadsheet, presentation, databases, etc.)
  • Newsletters / email marketing
  • Customer relationship management
  • Knowledge management
  • Voice over IP / communication
  • Project management / time-tracking
  • Billing / accounting
  • Online conferences

Software billing as a service

Unlike the licensing model, software as a service is not billed as a one-time fee. Instead, there are monthly usage fees until the end of the contract with this billing model. For many software products, a monthly fee is charged per user. In some cases, there are also inclusive charges, for example between five and ten persons are included per month. The rate can also depend on the range of functions used. In this case, if you opt for the cost-effective basic version with limited functionality, you will pay less than if you chose the full version.

In some industries, it has also been established to align the billing model with the number of transactions executed. In an accounting software, the monthly charges may depend on the number of transactions, but an online shop system may be billed for based on the monthly turnover or the number of orders. Another common model is called “Freemium.” In this case, you can use a free basic version, which can be expanded according to individual needs by premium features for a fee.

Benefits

By using Software as a Service, users benefit from the following advantages:

  • Faster start of use through simplified implementation
  • Improved mobility through use with mobile devices
  • Flexible billing models depending on usage intensity
  • Transparent costs
  • Low investment risk
  • Generally short notice periods
  • Focus on the company’s core business
  • Additional offers from the service provider (including training, regular function extensions, backups)
  • No IT infrastructure required

Disadvantages

Depending on the system, the user may be more or less dependent on the service provider. Because all data is stored on their servers, a company could be faced with severe trouble if they suddenly became unavailable. Even a small disturbance of the Internet connection could potentially paralyses the entire business. Added to this is the problem of data protection. Entrepreneurs or companies are themselves responsible for the protection of personal data, but can only control this conditionally if they are partially outsourcing handling such information to an external service provider.

Examples of companies using software as a service

Software as a service is considered to be a particularly attractive growth field similar to big data, data cloud computing. The number of companies that use SaaS is growing steadily and companies that offer this concept have growing sales.

Examples of the largest providers of SaaS solutions are:

  • Salesforce.com
  • SAP
  • Oracle
  • IBM

Currently, there is a strong concentration on certain market segments. While Oracle has taken over the Taleo cloud service, SAP integrated SuccessFactors, a cloud-based software to effectively utilize human resources. Some SaaS specialists also offer solutions for precisely defined business areas. This includes ERP systems, CRM services, and special cloud services. Software as a service is a field that is currently undergoing extensive development, but already offers tailor-made solutions for companies who want to use their resources differently and are looking for an alternative to licensing software. Famous users of SaaS solutions include Miele, Volkswagen, and Siemens.

Relevance to search engine optimization

Hardly any work is done with locally installed software in the field of search engine optimization. Most SEO tools used for on-site analysis, link building, domain analysis, social media activities or keyword research are provided by service providers free of charge or against a recurring fee. Software as a service is very recommendable in this sector, since local installations would lead to an increased need for updating due to the constant changes in search engine optimization.

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