Software as a service (SaaS) is one of the most popular choices for businesses in the cloud market. Gartner forecasts end-user spending on SaaS services to exceed $171 billion by 2022. There’s a good reason for this growth. All you need is an internet connection and a browser. In addition, vendors manage all technical issues, meaning customers don’t need large and costly in-house IT teams; it’s practically hands off.
SaaS has revolutionized networking practices and infrastructures. Here are five benefits of SaaS and a few often overlooked challenges.
SaaS providers charge monthly, which eliminates large upfront investments. In addition, solutions are often hosted on a shared or multi-tenant platform, where hardware and software license expenditures are lower than they would be under the traditional model.
SaaS also allows you to rapidly increase your customer base since it allows small and medium businesses to use an application they would not be able to afford due to high licensing costs.
Maintenance expenses are also lower since the SaaS provider maintains the environment and distributes it to all clients who use the solution.
Reduced Time to Benefit
SaaS allows you to reap the benefits of new technology in a shorter time. In addition, SaaS solutions are available right away — there’s no need to buy, install, or configure anything since everything is already done for you.
Cloud servers are accessible in a matter of minutes. You simply provision the server for an instance in the cloud, and you’ll have your application up and running in no time. This aspect shortens installation and configuration time, as well as eliminates most roadblocks encountered during software deployment.
Scalability and Integration
SaaS can solve many issues related to scalability and integration, both of which are common concerns when developing an in-house application.
Scalability is the ability of a system or component to handle increased loads without significant changes to its internal structure.
The most scalable solutions offer built-in flexibility for adding more servers and storage easily. These systems also allow you to allocate computing power on-demand without downtime during updates or maintenance activities that require reconfiguration.
Integration occurs when multiple pieces come together into one process; it’s essential because different software applications must interact seamlessly to deliver valuable results. It allows users to “turn on” information sharing among various applications their company uses, increasing the value of the information available.
SaaS offers built-in integration since it is implemented with other SaaS solutions you use or need for your business. This decreases your time to integrate solutions and troubleshoot application issues.
Companies using cloud software can benefit from new features faster than they would if working on an in-house solution.
For example, Google Workspace gives users access to several programs to complete multiple tasks simultaneously — view spreadsheets, edit documents side by side, and chat together while writing reports. If these same companies worked on their own servers without this type of collaboration management system, there’s no doubt they’d be far behind what others were capable of achieving.
Easy to Use and Perform Proof-of-Concepts
Purchasing software can be a big risk for companies since they don’t know how it will perform until implemented. With SaaS, you can use the application without investing large amounts of money or time into learning how it works; you simply pay as you go. This makes scaling your business easier because no installation costs are involved. You get quick access with limited training needed.
Some Common SaaS Challenges
SaaS solutions aren’t without drawbacks. A few common challenges come along with using Software as a Service solutions, namely security concerns, lack of product customization capabilities, compatibility issues within existing infrastructures/applications, high switching costs, including technological lock-in, and a lack of control.
Lately, there has been an increase in security incidents involving SaaS solutions. For example, during the Capital One breach AWS servers were compromised, leading to a loss of over 106 million customer records. The 2019 Docker Hub breach exposed more than 190,000 customer records.
Some SaaS applications store data with third parties where security measures may not be as strong as within the company’s own servers. There are also cases when sensitive information is lost or stolen due to attacks from hackers who exploit vulnerabilities that developers failed to identify during testing phases and before deployment into production environments.
Lack of Customization Capabilities
Many companies would like to have total freedom over their application without having limitations enforced upon them for functionalities they didn’t plan on using initially but require later down the road.
This can lead to high costs for customization, which is a problem for companies that want to offer the same service as their competitors but with unique features.
Compatibility Issues Within Existing Infrastructure/Applications
For SaaS implementation within an organization to be successful, it must integrate well with existing infrastructure and applications without causing major disruptions or errors.
For example, if you’re working on integrating your company’s CRM system with Salesforce so everyone can access information across different departments more easily, there will most likely be some challenges along the way because both tools were designed independently of each other by separate teams who had no idea what problems they’d encounter when trying to work together at scale. This requires you to spend time and money troubleshooting issues instead of focusing on meeting business goals.
Switching Costs (Including Technological Lock-in)
One of the major problems with switching from an in-house software solution to SaaS is that it can be a costly process since many companies require their services to stay within specific technologies, which means you’ll have to rebuild your entire infrastructure and application stack if you want to switch over during this transition period between platforms.
For example, moving from on-premise communication tools such as VoIP systems or email servers hosted internally requires research into the new costs involved. This includes things like cloud architecture changes and hardware reconfigurations needed before getting everything up and running smoothly again.
Lack of Control Over Environment/Data Privacy
When using SaaS solutions, you don’t have total control over your data because it could be stored on servers located within another country. This means that customers’ information could potentially fall into the hands of third parties who may use it for profit or sell to competitors without their knowledge, putting them at risk of losing business and running afoul of data privacy laws.
Resolving SaaS Conflicts
When you look at the challenges and drawbacks through the lens of utility vs. strategic processes, it becomes a lot easier to resolve.
Make a rule that the provider must modify through configuration in the vendor’s platform rather than custom source code.
It makes absolute sense to use SaaS solutions for utility processes. Your processes should match the software as closely as possible. This often requires an organization to update its operations.
For strategic processes, you’ll need to think more carefully about when and how you can incorporate SaaS into your strategy. For example, it might be a good idea to adopt a SaaS solution and modify your business procedures to fit it. In other instances, you’ll choose to use your limited resources to create an appropriate solution for your unique requirement because the process is a major differentiator for you.
Finally, if you genuinely need a bespoke SaaS solution, make a rule that the provider must modify through configuration in the vendor’s platform rather than custom source code. This way, you’ll factor this into your decision when making a purchase, and hypothetically, keep the benefits of customization without having to pay for a customized version.
Read next: Managed Cloud Services for SaaS Companies