Instead of purchasing licensed applications, and installing them on your computer, you can easily borrow online software, known as Software as a Service or Saas. In this way, all the functions needed for your business become available in a more cost efficient way. The pricing for the services based on the Saas model is based on a monthly fee, considerably lower than the price of a licensed application. Also, because the software is hosted remotely, you do not need to invest in any additional hardware.

Application software is installed and operated from a network cloud, rented to a cloud user who can access all its functions as easily as he would access his e-mail.

Why Saas?

  • Reduced cost – monthly fees can be as low as 5$, compared to paying for a licensed copy of Microsoft Office Professional, for example, which costs  500$, plus you don’t need to make the initial investment in the machinery
  • Simple maintenance – a single central copy is maintained and repaired by vendors online, bugs and errors are treated directly, faster than can be done with the IT support staff, plus all the data backups already exist on the cloud
  • Simple upkeep – all new updates and features are automatically added online
  • Simple customization – you can easily alter any set of predefined configuration options that affect the functionality of your software application
  • Independence of your operating system – whether you use Windows, Mac OS, or Linux, you can easily access all of the software application functions using only your browser and an internet connection

Why not?

  • Low speed Internet – as a cloud user, you may encounter problems accessing your software application features through cloud clients if your internet connection is not strong or fast enough
  • Distrusting the cloud – some cloud users may have an issue with all their data being stored on third party servers, and maintained online

How do you know your Saas application is well-designed?

There are 3 key differentiators that separate a well-designed SaaS application from a poorly designed one: scalability, multi-tenancy, configurability.

A scalable SaaS application is designed from the ground up to load balance effectively with increasing customer instances, maximizing concurrency and using application resources effectively and on demand.

A multi-tenant-efficient SaaS application should be able to differentiate data belonging to different customers, while it maximizes the sharing of resources (such as hardware or memory) across tenants.

A configurable SaaS application has to accommodate users from several different companies at once. Since the code cannot be modified as changes for one tenant could affect the other on the same server, this is achieved through the use of metadata and a metadata execution engine.

Google Apps

Google Apps as an example of SaaS software. Image source.

Some examples of SaaS include: Google Apps, Quickbooks Online, Limelight Video Platform,, Marketo, Unbounce, SEOMoz and Microsoft Office 365…