SaaS: The Definitive Guide to Software as a Service


Software as a Service is an online service that allows users to access software applications remotely. It has become so popular, it’s used by every business imaginable, from huge corporations like IBM and Microsoft to small businesses operating out of the home.

In this article, I’ll explain what Saas is, how it works, common forms of SaaS models, examples of SaaS vendors and more!

What is Saas?

With SaaS, the user has no need for any physical computer or server hardware because they are hosted in the Cloud.

The user simply logs into the software via their web browser and can use it to complete tasks on any device.

A lot of people are using Software as a Service apps, either for work or personal reasons. It’s not surprising that Software as a Service has become mainstream, with users purchasing more than $20 billion worth in 2015 alone.

What are the common types of SaaS Models:

There are a number of different types of SaaS models, including:

  • Platform as a Service (PaaS), which is an environment for hosting software or websites with the necessary tools and services. It provides more than just access to the Cloud; it also provides the background and operations.
  • Infrastructure as a Service (IaaS), which is the hosting of computer hardware in data centers to help organizations with their IT needs.
  • Software as a Service (Saas). This model is predominantly used by businesses that are not tech savvy or don’t have an IT department.

What are the advantages of Software as a Service?

Software as a Service is more than just being hosted in the Cloud. It’s also about using software to grow your business. With SaaS solutions built specifically for small businesses, like Hootsuite and Salesforce, companies can use programs that are designed with their needs in mind.

Cloud-based apps provide an easy way for businesses to reach their goals:

  • Easy access for anytime, anywhere use.
  • Cloud-based apps allow companies to focus on what they do best and don’t have time or the necessary talent to manage IT needs.
  • Businesses are able provide an improved customer experience with SaaS tools that track data analytics, such as Salesforce’s robust analytics software.
  • Cloud-based apps allow for collaboration and increased productivity.
  • A lot of SaaS vendors are built on open source platforms, which means they’re accessible to everyone in the business community with no restrictions or fees.

What are the disadvantages of SaaS?

One downside of Software as a Service is that it can be difficult to get a handle on what you need.

It can also be hard for small businesses without an IT department to find vendors that are affordable and offer great customer service.

But if the vendor offers their own support, then it’s not so bad because they’re always there for customers when needed!

Who invented Saas?

Software as a Service was invented by Marc Andressen of Netscape in the 1990s. It used to be called “Netscape LiveWire” and it marked the first time software was available for purchase over the Internet.

He then founded Opsware, which is an SaaS company that provides management tools for IT departments with more than $700 million in revenue.

Hewlett-Packard’s server division

But the company was sold and merged with Hewlett-Packard’s server division for a reported $900 million, after which he resigned from his position as CEO of Opsware/HP Software.

It has been estimated he is worth around one billion dollars today thanks to founding Netscape and creating Software as a Service.

Other companies that initiated Software as a Service include Oracle,, and Workday.

How safe is SaaS?

SaaS is a secure option because the user’s data never leaves their own network.

With Software as a Service, all sensitive information and software are stored on servers in high security data centers that have been encrypted for privacy protection.

In order to access this cloud-based software program, the client will need an Internet connection with SSL (secure socket layer) encryption.

SaaS providers need to be PCI (Payment Card Industry) compliant, which is a security requirement set by Visa and MasterCard for all businesses that handle or process cardholder data.

In many cases, SaaS vendors are subject to audits from the Uptime Institute – an organization dedicated to ensuring that the provider’s web hosting and data is continuously available.

Other security features include firewalls, intrusion detection systems, backup plans to guard against natural disasters or other catastrophes like hacking and malware attacks.

What if an SaaS vendor goes out of business?

One downside of Software as a Service is that if the vendor goes out of business, then all your data and software will be gone.

But vendors are looking for ways to make it more difficult for themselves to go out of business by adding insurance, making sure they have enough money in their assets so they don’t fall victim to bankruptcy, and other safeguards.

One way to protect your data is by using any software as a service option that offers their own backup plan in case the company needs to close its doors for some reason.

If you have all of your data stored on your local server, then there’s always the risk it could be lost if something happens – like a natural disaster, or if someone hacks into your system.

SaaS is a safe and secure option for storing data because it can’t be accessed by anyone who isn’t authorized to do so – the only person with access to all of your information is you!

This means that nobody else has any chance of hacking in and stealing your data, or of making a mistake that could put your data in jeopardy.

It’s also worth mentioning that you always have the option to stop using SaaS if it doesn’t work well for you and find another vendor with different features – there are more than enough options out there!

What are some examples of SaaS vendors?

Some popular examples of SaaS vendors include Dropbox, Google Drive, OneDrive, and Onlive Desktop.

The advantage to using these types of services is that they allow you to access your files from any device – like a laptop or tablet – so long as it has an Internet connection. It’s also easy to share data with other people, and to collaborate on documents.

Some other popular SaaS vendors include Apple iCloud, Microsoft Office 365 (a suite of business-oriented applications), Zoho – a company with an impressive selection of software as well as customer service in more than 20 languages around the world.

Salesforce is one example of a provider that offers both Software as a Service and Platforms.

Salesforce is one of the top providers in this market because it offers an intuitive user interface, which makes it easy to use for beginners as well as those with more advanced skills.

It also has powerful features that allow you to customize virtually any business process or create your own custom applications using data from Salesforce.

There’s even the option of integrating Salesforce with other providers, which makes it possible to manage your customer data across a variety of channels and platforms so you can reach your customers in ways that are most convenient for them.

How much does Software as a Service cost?

Pricing models for Software as a Service vary depending on what features you need – some have additional charges if users want more than the basic package.

Some of the most popular pricing models for SaaS providers are monthly and annual subscriptions, with pay-as-you-go or a metered plan as additional options in some cases.

Most vendors offer discounts to those who buy more than one year at once, but you should always read the fine print because these discounts often come with limitations.

Some vendors offer free trials so you can see what the service has to offer before paying for it, which is a great way to make sure this type of software works well in your business before committing.

Subscriptions are usually paid monthly or annually and there are no upfront fees – once you’re set up, you never have to worry about making payments or renewing your contract.

The Future Of SaaS

The Future Of SaaS

It's easy to see that SaaS is here to stay.

The rapid growth and popularity of SaaS, as well as the increasing number of vendors who are joining in on this movement will be beneficial for businesses looking for a competitive edge. Cloud-based apps have already had an impact on our daily lives – everything from banking, to staying in touch with distant relatives, to finding new music. So it’s not surprising that the workplace is changing too.

The future of Software as a Service will be about integration and growth – integrating programs like Salesforce into other business functions so they can work seamlessly between different departments, or improving customer service by adding more clients to an existing solution.

Alex Becker: visionary online entrepreneur

Alex Becker saw the importance of Saas and capitalized on that to build a net worth in the millions. To learn more about who is Alex Becker, check out his story here