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Software-as-a-Service Overview


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What is SaaS?

SaaS, or Software-as-a-Service, describes any cloud-computing service where consumers are able to access software applications over the internet. The applications are hosted in “the cloud” and can be used for a wide range of tasks for both individuals and organizations. Google, Twitter, Facebook and Flickr are all examples of SaaS, with users able to access the services via any internet enabled device. Enterprise users are able to use applications for a range of needs, including accounting and invoicing, tracking sales, planning, performance monitoring and communications (including webmail and instant messaging).

SaaS is often referred to as software-on-demand and utilizing it is akin to renting software rather than buying it. With traditional software applications you would purchase the software upfront as a package and then install it onto your computer. The software’s license may also limit the number of users and/or devices where the software can be deployed. Software as a Service users, however, subscribe to the software rather than purchase it. Applications are purchased and used online with files saved in the cloud rather than on individual computers.

There are a number of reasons why SaaS is beneficial to organizations and personal users alike:

  • No additional hardware costs; the processing power required to run the applications is supplied by the cloud provider.
  • No initial setup costs; applications are ready to use once the user subscribes.
  • Pay for what you use; if a piece of software is only needed for a limited period then it is only paid for over that period and subscriptions can usually be halted at any time.
  • Usage is scalable; if a user decides they need more storage or additional services, for example, then they can access these on demand without needing to install new software or hardware.
  • Updates are automated; whenever there is an update it is available online to existing customers, often free of charge. No new software will be required as it often is with other types of applications and the updates will usually be deployed automatically by the cloud provider.
  • Cross device compatibility; SaaS applications can be accessed via any internet enabled device, which makes it ideal for those who use a number of different devices, such as internet enabled phones and tablets, and those who don’t always use the same computer.
  • Accessible from any location; rather than being restricted to installations on individual computers, an application can be accessed from anywhere with an internet enabled device.
Office software is the best example of businesses utilizing SaaS. Tasks related to accounting, invoicing, sales and planning can all be performed through Software as a Service. Businesses may wish to use one piece of software that performs all of these tasks or several that each perform different tasks. The required software can be subscribed to via the internet and then accessed online via any computer in the office using a username and password. If needs change they can easily switch to software that better meets their requirements. Everyone who needs access to a particular piece of software can be set up as a user, whether it is one or two people or every employee in a corporation that employs hundreds.


SaaS is arguably the most common of the cloud computing variations; it’s the term used to describe a software delivery model in which applications are hosted (usually by a provider) and made available to customers over a network connection.

  • There are no setup costs with SaaS, as there often are with other applications
  • SaaS is scalable with upgrades available on demand
  • Access to Software as a Service is compatible across all internet enabled devices
  • As long as there is an internet connection, applications are accessible from any locatio

Cloud Market Projection

According to Forrester Research, Inc. “Sizing the Cloud” the cloud computing market will grow from $40.7 billion in 2011 to $241 billion in 2020.

Sizing the Cloud

Enterprise users frequently make use of SaaS with many popular accounting, invoicing, sales, communications and CRM systems being delivered this way. Adoption of SaaS will continue to grow in the enterprise market over the next decade as companies continue to globalize operations and seek to “do more with less”.



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  • This article is from the Interoute web site (http://www.interoute.com/cloud-article/what-cloud-computing). Interoute is an international telecommunications service provider and the owner operator of Europe's largest cloud services platform (www.interroute.com).
  • Data on the size of the cloud computing market is from Forrester Research (www.forrester.com).


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