SaaS delivers software over a network, not on individual computers. Vendors build, update, and maintain the software, while customers purchase a subscription to access it. SaaS saves time and money for both parties, and allows for easy scalability. The disadvantage is limited customization, but contracts can be terminated for good cause. Customers can research vendors to avoid non-delivery issues.
The Software as a Service (SaaS) model is a way of delivering the same software to different customers over a network, usually the Internet. In other words, the software is not hosted on individual customers’ computers. Under the SaaS model, a vendor is responsible for building, updating, and maintaining the software. Customers purchase a subscription to access it, which includes a separate license or seat for each person who will be using the software.
The Saas model can add efficiency and cost savings for both the supplier and the customer. Customers save time and money as they don’t have to install and maintain programs. Customers must not hire or use existing staff to maintain the software. They also generally don’t have to buy any new hardware. This allows a client to focus more resources on growing the business.
Shifting the burden of hosting and software development to the vendor can also speed up the time it takes for the customer to see a return on their software investment. Using the SaaS model, the number of seats can be increased as the business grows. It’s usually faster and cheaper than buying another license and adding it to another computer, as with traditional software.
Vendors usually only need to update and maintain software over the network, as opposed to updating several copies of the software on different computers. This allows the vendor to deliver the latest updates and technology to each customer in a timely manner. The disadvantage for the customer is that he does not control the software and the customization of programs can be limited.
If one customer requests an upgrade, it will most likely be needed by other customers using the same software. If the customer completely outgrows the software, however, the company can simply terminate the subscription at the end of the current contract. In such cancellation, the applications generally do not need to be removed from the customer’s computers. Typically, the canceling customer retains ownership of all proprietary data entered into the SaaS application.
SaaS model contracts can be terminated early for good cause. Vendor failing to deliver the software in a timely manner – or not delivering it at all – or the software not performing as specified in the contract, are usually grounds for termination of the contract. With broadband technology more common across the workforce, however, customers have many choices when it comes to software that comes with the SaaS model. Customers can thoroughly research SaaS vendors and request current references, to avoid non-delivery issues.
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