What is SaaS?

When the cloud first came to public attention, it was as a means of storing data so that it could be accessed from anywhere. As internet connections have become faster and more reliable, however, cloud use has opened up many more possibilities, and these include Software-as-a-Service (SaaS). In essence, this means being able to access applications from the cloud rather than having them installed locally on a computer.


The idea of SaaS dates back to the 1960s, when early mainframe computers were big and expensive, so businesses would rent time on remote systems to carry out their processing. With the widespread introduction of affordable desktop computers in the 1980s, this model fell out of favour. 

In the last decade, however, with fast, reliable fibre internet connections becoming widely available, the service model of computing has come back into fashion and is more practical than ever before. What’s more, it is no longer the preserve of large enterprises. Indeed, it is now sufficiently affordable and available that small businesses and individuals can benefit from it too.

How does it work?

SaaS has become synonymous with cloud computing. SaaS fully exploits the remote model to allow you to run your applications on a server that is located somewhere else.

Almost any kind of software is now available on a SaaS basis. Whether you want a customer relationship management (CRM) system, an accounting platform or an office suite, you will be able to find it in SaaS form.

Advantages of SaaS

SaaS offers several benefits, especially for small and medium-sized businesses. Firstly, there’s accessibility. You can use your software from anywhere you have an internet connection, so this makes it ideal for those who travel around or who want to work from home.

The second advantage is in pricing. Traditional on-premises software models required you to have a licence for each user. This is difficult to administer and can lead to problems with unused licences as your business needs change. With SaaS, you pay for what you use, and you can easily scale your requirements as your business grows or to cope with seasonal variations in demand.

Maintenance is easier too. Rather than having to update all of your desktops and other devices when a new release or a patch comes out, SaaS packages are maintained by the service provider, so you can always be sure that you will be using the most up to date version.

You might think that sharing the same software with other organisations and individuals would be restrictive, but in fact, most SaaS systems now offer a great deal of customisation. This means that you can brand the software for your business and adapt the way it works to suit your needs.

For smaller companies, one of the most significant advantages of SaaS is that it puts them on a level playing field with larger competitors. You have access to specialist software that might be far beyond the IT budget if you had to licence and install it in house and maintain the hardware on which to run it.

Key considerations with SaaS

Of course, there are some drawbacks and considerations with SaaS too. It’s important to understand these and factor them into your decision-making process. Firstly going all-in on SaaS makes you very dependent on having a working internet connection. If your router fails or your broadband line goes down then you could be left unable to access your vital business systems. If you are considering SaaS, you might want to put in place a fallback access plan, such as mobile internet.

Security is another concern for many in contemplating the use of the cloud. You need to make sure that you trust the service provider and that you understand what measures are in place to backup and protect your information. Ensure that information is encrypted both where it’s stored and in transit.

Regulatory and legal compliance also come into play here; GDPR for any organisation involved with personal data for EU citizens; PCI-DSS compliance for businesses taking card payments; MiFID II for elements of the financial sector and so forth. Each requires specific contractual commitments from a SaaS provider.

Accessing SaaS software means logging in to a remote system, and you need to understand the risks of this too. Make sure that your users have strong passwords and that they don’t share them with other services. You may also want to consider using a multi-factor authentication method so that you are not relying on passwords alone.

Finally, you need to consider the danger of becoming ‘locked in’ with a supplier. What happens if you decide that the system no longer meets your needs? How do you get your data back? How easy it to terminate the contract in the event of a steep price rise?

There’s a great deal to think about if you are considering a move to SaaS, so make sure you take the time to understand what you are getting into and what options are available to you.

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