Simply put, SaaS can be defined as “software deployed as a hosted service and accessed over the Internet.”
These applications were originally built as single-tenant applications, their ability to share data and processes with other applications was limited, and they tended to offer few economic benefits over their locally installed counterparts.
Today, SaaS applications are expected to take advantage of the benefits of centralization through a single-instance, multi-tenant architecture, and to provide a feature-rich experience competitive with comparable on-premise applications. A typical SaaS application is offered either directly by the vendor or by an intermediary party called an aggregator, which bundles SaaS offerings from different vendors and offers them as part of a unified application platform.
In contrast to the one-time licensing model commonly used for on-premise software, SaaS application access is frequently sold using a subscription model, with customers paying an ongoing fee to use the application. Fee structures vary from application to application; some providers charge a flat rate for unlimited access to some or all of the application’s features, while others charge varying rates that are based on usage.
On the technical side, the SaaS provider hosts the application and data centrally—deploying patches and upgrades to the application transparently, and delivering access to end users over the Internet through a browser or smart-client application. Many vendors provide application programming interfaces (API) that expose the applications data and functionality to developers for use in creating composite applications. A variety of security mechanisms can be used to keep sensitive data safe in transmission and storage. Applications providers might provide tools that allow customers to modify the data schema, workflow, and other aspects of the application’s operation for their use.
There are several advantages for both users and software companies of the system. The user does not need to devote as much disk space or other resources on their computer to the software on their system. The software producer has less to worry about in terms of software being illegally copied. Any updates and bug fixes can be carried out instantly rather than having to be sent out to individual machines.
One of the biggest concerns users have about this model of SaaS is security. There are inherent risks in sending confidential data to and from the servers which hosts the software, meaning every document created using the software must be treated as potentially less secure than one kept solely on a company network. Most SaaS providers will have very strict controls designed to protect against any data security breaches and to reassure customers.
