What’s All the Fuss About SaaS and the Cloud?

Why is there such a buzz about Cloud based and Software as a Solution? Historically, enterprise software has been delivered by running executable code on computers that were either on premise at the client site or housed elsewhere (hosted) for the client. The difference between on premise and hosted systems is essentially about who maintains the hardware, as both systems have unique configurations of executable code designated for that specific client only. When an upgrade or software fix (patch) is needed, downtime is involved, so the scheduling and patching involves several groups including the client’s IT department, client user management, etc. While this is generally still the case with most legacy software applications installed around the world, it is changing dramatically as clients migrate to web based solutions.

On premise and hosted software are still the norm for most enterprise systems but in the last decade there has been a major migration to Internet or cloud based software solutions which have a single instance of executable code but are used simultaneously by many clients and customers (multi-tenanted). These solutions are referred to as Software as a Service, and abbreviated as SaaS. Commonly used web sites like Facebook, Kayak and Google are examples of SaaS. When we use those sites, we are having the same experience that millions of others are having – all at the same time. There are many benefits to having single instance, multi-tenanted, software solutions including:

Painless upgrades. When a true SaaS offering is enhanced, everyone enjoys the enhancement without any effort, patching, downloading, etc. Every month new enhancements are made available to all clients. Often, the client is able to decide if and when they will “turn on” each enhancement to make it available to the client’s customers. For example, when Invoice Cloud rolled out Pay by Text last year, it became available to all clients immediately, but clients were able to decide when to make it available to customers.

According to Colleen O’Connor, Tax Collector in Simsbury, CT,
“It’s like owning a vehicle that never gets old.”

Low to no up-front cost. These systems are frequently advertising or transaction based and since there is no “installation,” the solution can usually be configured and implemented in a fraction of the time of a hosted or on premise solution.

Higher adoption. Cloud based systems that are accessible via the Internet using standard web browsers are far more likely to be used than systems that require special access or instructions. Standard web interaction techniques, user interfaces (UI) and user experiences (UX) require very little instruction and are therefore quickly adopted.

Scalability and Seamless Integration. Single instance, multi-tenanted solutions can typically scale quickly to accommodate hundreds, thousands or even millions of customers. For Invoice Cloud, millions of customers could be simultaneously reviewing bills and making payments online. Most SaaS providers have simple application program interfaces (API’s) that enable seamless connection and data exchange with existing enterprise systems, whether they are on premise, hosted or SaaS.

Better Customer Service. Since there is only one instance of software that everyone uses, the Customer Service Representatives have only one software to train on, learn and support. This is an enormous advantage over on premise and hosted software providers who need to know which version of software the client is using, which patches have been implemented and remember how to deal with multiple versions of software. With SaaS, there is only ONE version – the latest and greatest.

Security and Liability Shift. If you find the right provider, you can shift the burden of secure storage of sensitive information (ex. credit cards, bank accounts) to the SaaS solution provider who should indemnify clients against damages caused by breaches – because the SaaS provider takes on the encryption and security burden.

Many software companies say they have cloud based systems when they actually provide hosted solutions that are accessible over the web. Being accessible via the Internet is not the same as true SaaS. Remember that true SaaS is a single instance, multi-tenanted solution that anyone can access using a standard web browser.

Comments? Bob Bennett bbennett@invoicecloud.net