Software as a Service – what’s the latest view?
Across many fields of business, Software as a Service (SaaS) solutions are superseding downloaded and installed software solutions. According to Gartner forecasts, the spend on SaaS solutions will increase to 116 billion USD in 2020, representing a 16% growth rate YoY and it is the fastest growing major IT market (1).
Rather than paying for a license for a particular version of the software, then paying extra for updates and hosting, most SaaS solutions are priced with licensing, updates and hosting costs already built in. Your payment covers all the costs associated with running and updating the software.
That’s just one of the reasons behind the growth of SaaS. The subscription-based, pay-as-you-go-model is being adopted by small businesses – with applications like Xero, Quickbooks online, GSuite and Zoho. Furthermore, Microsoft 365, Dynamics 365, Salesforce, Oracle Cloud ERP and SAP Cloud ERP are being embraced by major multinational enterprises.
It’s not just about the cost alone. SaaS solutions deliver all of the advantages that organisations demand from their software vendors.
How SaaS can benefit YOUR business
Cost Optimisation – SaaS transforms the way you pay to adopt new software, from a large capital expenditure (CAPEX) to smaller payments that can go through operational expenditure (OPEX), often as a monthly invoice. Some research has been done on the subject of saving from SaaS. Computer Economics found that organisations saved on average more than 15% in IT spending in their 2014 study (2).
However, individually as a business it can be difficult to calculate cost savings when you compare SaaS with the costs of licensing, upgrading and patching fees for traditional software plus the costs of operating the software within your server infrastructure. Instead, look at whether your business wants to go through the time and expense of purchasing software with CAPEX or prefers to save time and distribute costs using the OPEX model associated with subscription SaaS services. Many SaaS solutions also offer a “Pay-as-you-Grow” alternative for your business, rather than paying for everything up front.
Scalability – For most SaaS solutions adding and removing users, increasing storage capacity or adding new features means a simple change to your subscription, plus a few automated emails to users. In addition, it takes significant effort to mount updates to the traditional software on the hard drive of every user’s computer. For your IT department, remote users being even greater complexities.
Freedom – Using SaaS offers more flexibility for your organisation to work as you need and as your people want. People using SaaS solutions can work from anywhere, anytime. SaaS solutions are best set up to help users work remotely, whether it’s in a local café, a satellite office or even the customer’s premises or from home.
Peace of mind – Although SaaS gives you freedom and flexibility, backup and disaster recovery are not compromised and the risk of data loss is greatly reduced. With installed software, most data is saved locally on the device or in your company server infrastructure. When your business uses SaaS solutions, that data is often hosted on the vendors’ cloud servers. So even if your server infrastructure goes down, through power cut, flood, fire or other disaster, your information is safe. With data stored by your vendor in larger Public Cloud infrastructures, such as Alibaba Cloud, AWS or Microsoft Azure, your business data is protected by better resources and recovery capability.
Security – This is a major concern for many businesses and you can help protect your company’s data with SaaS Solutions. Your IT team will need to decide where data resides by working with the SaaS vendor and the hosting infrastructure that your business and/or the SaaS vendor chooses. They’ll be considering data sovereignty issues, which can be addressed by choosing data centres based on their locations and their data transfer protocols and redundancies/mirroring. Unlike traditionally installed software, SaaS systems provide a high degree of protection because they can easily adapt to use the very latest of security technologies.
How else can SaaS help your business?
The adoption of SaaS technologies has many advantages that varies based on your organisations scale and spread, as well as the sector and location where it operates. We recommend that you do your own independent research on the advantages that your company would gain from SaaS solution adoption. Some vendors promise continuous software updates (which could be monthly, weekly or even daily). Others offer real-time analysis and the reduction of departmental silos, so your people have clearer insights across the business, for more informed decision-making using the latest information. To get a better understanding of what they offer, consult your vendor’s social media feedback and third-party software review pages.
What about hosting for your SaaS solution?
Small to Mid-market businesses
Large multi-national enterprises and organisations
For larger businesses and government organisations with more complex needs around data hosting, software vendors should take time to provide you with multiple alternatives on where and how the SaaS system is hosted. This should work within your internal IT team’s plan and strategy for hosting infrastructure.
For example, a large multinational manufacturing business based in Germany with production contracts for German government departments could be required to host the most sensitive manufacturing data in their cloud ERP solution on a Germany-only data centre. This will be a critical element of the agreement between the Manufacturer and the Cloud ERP vendor.
A large multi-national business, using different SaaS solutions hosted in different Public Cloud or hybrid cloud platforms, would need to work with their vendors to set up IT infrastructure and architecture allowing the SaaS solutions to communicate with each other No matter the scale and sophistication of your sector, China Telecom (Europe) will advise you on the best practice approach and industry-leading hosting solutions, including Internet Data Centre Colocation services, Infrastructure as a Service (IaaS), Virtual Private Cloud, Content Delivery Network (CDN) and Global Multi-Cloud Access
2 – Computer Economics 2014. https://www.computereconomics.com/article.cfm?id=1932