Software as a service, otherwise known as SaaS, is fast becoming a popular choice for businesses when it comes to setting up applications for all to use over the internet. Since the concept of SaaS is a little abstract to grasp, let’s elaborate a little about what it is.
In principle, SaaS offers Cloud based applications as a service, which you can access over the internet, just like when you access Gmail, Facebook and other popular Apps.
Statistical evidence of SaaS growth
• According to PWC, which looks at the global ranking of the top 100 SaaS companies, it seems as if the demand for businesses to digitalize their services is on the increase. Their statistics show the demand for hardware solutions is gradually dropping every year by approximately 0.5%. This figure could increase in years to come. We’ll explain more on this later on.
• It's predicted that within the next couple of years around a substantial 25% will be spent on service- enabled software, with over 18% spending going towards applications and 14% on SaaS delivery.
• The International Data Corporation (IDC), analysing the technology sector, predicts an annual growth of over 21%, making this a booming market and a solid business scheme for those investing in this industry.
• For instance, Salesforce.com boasts of a $2,766.00 monthly revenue, followed closely by Intuit, bringing in $1,213.00 per month, as published on PWC.
• This shows that SaaS companies have been gaining more ground within the software sector, and is fast changing the face of IT and software services.
What is causing this growth?
There are multiple factors which influence this upward growth in SaaS, lets briefly explore these points:
Moving away from am IT physical infrastructure. In most part, this is due to a shift of companies not needing to worry about purchasing and maintaining hardware, as they virtualise their network infrastructures and move over to using the Cloud.
Saves money in the long run. Having services hosted over the Cloud as opposed to in-house, means savings. Since technical issues are handled by the SaaS company, staff are able to continue being productive as opposed to spending time opening tickets or waiting around for a solution from their IT department.
Traditional businesses moving on with the times. Furthermore, many traditional brick and mortar businesses are now investing in software than ever before to reach new customers and revitalize their existing services or software.
SaaS can offer a wide range of service catalogs and functionalities. Services held through SaaS would all be automated, allowing for people to use self-service, IT, HR, accounting and procurement functionalities. Data is recorded accurately and managed centrally. Saving time and headaches, extra functionalities can be added by requesting these to their developers to meet specific business needs.
Convenience and Flexibility. Even the Cloud enabled services have made it ever more viable for people to work more flexibly from home or whilst on the road.
Secure and centralized. SaaS are managed centrally, making it much more secure. Authentication at logins is locked down, and new developments within this field will ensure that data is kept safe and out of bound from the wrong hands. For instance, companies like Ciphercloud, Skyhigh networks and the like, are interested in developing this technology further to help businesses encrypt their data before it leaves to go out onto the Cloud.
Disaster Recovery, over to SaaS. Since effective disaster recovery is a major concern for many businesses, it is highly likely that SaaS companies are specializing in this. An example of an emerging company in the SaaS sector offering this is Spanning and Backupify.
With devices and Smart Phones on the rise using the public Cloud, and the examples discussed above, it seems as if It's a world where, whoever doesn't do business online is left behind. This has led to even more digitalisation of services, to permit businesses to run smoother and become much more efficient than ever before. The whole SaaS movement is predominantly being led by development operations, where it’ll be a case that IT operations will take a partial backseat.
We hope to have given you a better understanding to the concept of SaaS companies, explaining the role they serve in the business world and how it all fits in.