Software as a service (SaaS) is a software
development distribution model in which a third-party provider hosts applications and
makes them available to customers over the Internet.
SaaS is closely related to the application service provider (ASP) and on demand
computing software development delivery models.
Depending upon the service level agreement (SLA),
the customer’s data for each model may be stored locally, in the cloud or both locally
and in the cloud. There are SaaS applications for fundamental business technologies,
such as email, sales management,
customer relationship management(CRM), financial management, human resource management
(HRM), billing and collaboration.
Advantages
SaaS removes the need for organizations to
install and run applications
on their own computers or in their own data centers. Other benefits of the SaaS model
include:
- Flexible payments
- Scalable usage
- Automatic updates
- Accessibility and persistence
Disadvantages
SaaS also poses some potential disadvantages.
Businesses must rely on outside vendors to provide the
software development, keep that software up and running, track and report accurate
billing and facilitate a secure environment for the business' data. Issues can arise
when providers experience service disruptions, impose unwanted changes to service
offerings, or experience a security breach, all of which can have a profound effect on
the customers' ability to use SaaS offerings. To proactively
mitigate these issues, customers should understand their SaaS provider's service-level
agreement, and make sure it is enforced.