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Defining Cloud Computing – Part 3: SaaS

February 11th, 2009

Software as a Service (SaaS)

SaaS is currently the most popular type of cloud computing. Yahoo email, Google apps, zoho, and various other packages like CRM are all instances of SaaS. Application Service Providers (ASP) were the first SaaS providers. ASP was its own buzzword back in the late 1990s and early 2000s.

One of the aspects of SaaS is multi-tenancy or the ability for many customers to share the same service but maintain their own data securely. CRM is the predominant paid SaaS offering but email is, by far, the predominant free SaaS offering.

Any software that is offered over the internet, that runs remotely (where the location is unimportant and unrelated to the user), is a SaaS offering. With SaaS, a user has no need to worry about installation or upgrades. Of course, that also means the user has no control over versioning (or bug fixes).

The majority of SaaS offering are either free (think web mail) or per seat subscriptions (like online collaboration and CRM). SaaS may also be offered as a subscription for access and then charge fees for extras like additional storage.

SaaS vendors typically offer multiple levels of access (usually as subscriptions) and functionality. Many offer free trials or a free tier for trying out the software. If you are going to buy into a SaaS offering, first verify that the vendor actually does have paying customers and is stable (relatively to the rest of the internet companies).

It is not unknown that a SaaS vendor will go out of business, sometimes with little or no advance notice, and cause businesses a significant customer impact and/or data loss.

That’s not to scare you away from SaaS. The benefits far out weigh the downsides as long you perform due diligence when selecting your provider. In today’s market, for example, there is really no reason for an SMB to host their own CRM or email. You can outsource that to a SaaS provider for far less (when you subtract out the administrative overhead) of hosting it yourself.

LewisC

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