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Software as a Service is something that most enterprises have become familiar with. It is a cloud-based software delivery model where applications are hosted and maintained through an external source—a third party provider—and accessed by users from all across the internet.
SaaS is, however, different from the traditional software approach. While the latter is installed and run on local computers or servers, SaaS applications are accessed through web browsers. This is an immense advantage in the corporate world, as they are available from any device with an internet connection.
The adoption of SaaS is also much more intuitive and flexible than legacy alternatives. Companies often pay for it through a subscription model, typically either on a monthly or annual basis, rather than purchase a very expensive, one-time software license that might degrade or not evolve with always-growing business demands.
But where exactly did SaaS start? And what makes it so important for today’s organizations and their continuous success?
This article will bring you the answers and offer an overview of the start of Software as a Service, the benefits it can bring to small and medium-sized businesses, and what other considerations you should keep in mind.
The Early Stages of SaaS
The origins of Software as a Service (SaaS) aren’t difficult to trace. All you have to do is go back to the 1990s and early 2000s, when the internet was just becoming a popular source for entertainment—and businesses were just exploring its advantages for their operations. Prior to the existence of SaaS, companies primarily used on-premise software. That means they had to put significant time and resources into managing the installation, maintenance, and updates themselves, bringing significant upfront costs for licenses, hardware, and IT staff. But the limitations and struggles didn’t stop there. Companies were limited too by the scale of their infrastructure, and unable to easily scale up (or down) in response to changing needs and growing business requirements.
Unsurprisingly, that’s why the concept of delivering software through the internet emerged and became so vital: the introduction of early cloud computing models shifted the hurdles of managing infrastructure. One of the pioneers in the domain was Salesforce, which launched its customer relationship management (CRM) platform in 1999. What made the solution different? Unlike traditional CRM solutions that required on-premise installation, Salesforce was hosted using the cloud—and accessible via a web browser. This was, of course, revolutionary for its times. It eliminated the constant need to install software on your owe servers and allowed organizations to scale their CRM capabilities as needed, with a significant advantage: no major investment in new infrastructure.
The innovation jump-started by the Internet didn’t stop there. Internet speeds improved, and cloud infrastructure became more reliable, up to the point where companies like Google and Microsoft began offering their own software through SaaS models, such as Google Apps (known today as Google Workspace) and Microsoft Office 365.
SaaS Today—and Future Trends
While some companies still don’t fully grasp the full advantages of using Software as a Service as a major point of innovation and a driver for performance, SaaS is today a dominant force in the software industry. It can be found in most domains, with businesses of all sizes relying on cloud-based applications for everything regarding their infrastructure—from managing customer relationships to processing their payrolls. Adding to its growth, the evolution of artificial intelligence (AI), machine learning, and data analytics are also setting heavily accelerated trends for advancements and innovation, enabling features more advanced than ever before (some of which include predictive analytics, automation, and personalized user experiences).
The cloud infrastructure and computing world doesn’t show any signs of slowing down though and, as your peers seek greater agility, the SaaS model is likely to expand further, integration with other emerging technologies, such as blockchain and the Internet of Things (IoT).
The benefits of integrating SaaS into your SMB
Not many organizations have kept up with the Software as a Service landscape. In the past, companies had no reason to embrace technologically-driven innovation—not until the latest disruptions of the business world forced many leaders to adapt and overcome their legacy infrastructure. With its widespread adoption, cloud computing and SaaS are now revolutionizing all organizations, unlocking cost reduction, scalability, flexibility, and access to advanced tools that were once out of reach.
Cost-Efficiency: One of the primary reasons why SMBs might be interested in SaaS lies in the fact that it can be as cheap or as expensive as you need it. Traditional software solutions require significant upfront investments in licenses, hardware and infrastructure. These costs can be prohibitive, limiting the ability to adopt necessary technology. With SaaS, however, enterprises only pay for what they use through a subscription models, reducing the initial financial burden and eliminating the need for hefty capital expenditures.
Scalability and Flexibility: Another major benefit of using SaaS is found in its scalability. That’s because small businesses often experience rapid growth and have to manage seasonal fluctuations in demand, much more than their bigger counterparts. Legacy software systems might not be able to accommodate these changes—not without significant investments, expensive hardware upgrades, or extensive IT support. SaaS, on the other hand, allows you to scale up or down with ease. Regardless of whether an enterprise needs to add more users, increase storage, or access additional features, SaaS providers offer flexible tiers that can be adjusted whenever you require to.
Enhanced Collaboration and Accessibility: One of the defining features of SaaS is that it is hosted in the cloud, meaning it can be accessed from anywhere, as long as your users have an internet connection. This level of accessibility is invaluable for SMBs with remote or distributed teams, which allow employees to work from home, on the go, or from different office locations, without being tied to a specific device or location. Collaboration is also greatly enhanced by using SaaS tooling, allowing workers to collaborate on projects, share files, and communicate in real-time with ease.
Faster Time to Market: Because SaaS solutions are typically ready to use out of the box, SMBs unlock a new and next-gen advantage—that of implementing them quickly, and realizing the benefits almost immediately. This deployment speed can be critical for companies looking to innovate and stay ahead of the competition, compared to alternate traditional technologies, which necessitate extensive customization, installation, and configuration. The speed and ease of installation that comes with SaaS not only saves you time, but also reduces the risk of project delays, allowing you to launch new products without pain points, expand into larger markets, or respond to customer feedback faster than ever before.
Automatic Updated and Maintenance: Keeping your software up-to-date, especially in today’s increasingly risky cyber environment, is a must-have strategy for security, functionality, and performance. With the legacy approach, organizations were almost fully responsible for managing updates, which can be time-consuming and complex. But with SaaS, updates and maintenance are automatically handled by the service provider. This means you don’t need to worry about patching your software moving forward, installing updated, or dealing with compatibility issues. Providers typically push updates regularly, ensuring that your purchase remains current with the latest features, security enhancements, and bug fixes.
In Closing
As a decision-maker in the SMB scene, it’s your duty to fully understand why—and where—SaaS can benefit you the most, especially in a rapidly evolving and highly competitive market. From cost saving, to scalability and enhance collaboration, the advantages of SaaS can greatly expand over your entire digital ecosystem and put you ahead of your peers. Its adoption will continue to growth moving into 2025 and beyond, and it’s best to stay prepared and keep in touch with the latest advancements in order to better innovate and succeed in the future.
