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{{Short description|Software licensing and delivery model in which software is licensed on a subscription basis and is centrally hosted}}
{{Short description|Hosted software accessed by subscription}}
{{pp|small=yes}}
{{Multiple issues|
{{redirect-distinguish|SaaS|Security as a service}}
{{more citations needed|date=December 2017}}
'''Software as a service''' ('''SaaS''' {{IPAc-en|s|æ|s}}<ref>{{cite web|url=http://searchservervirtualization.techtarget.com/definition/How-do-you-pronounce-IT|last1=Panker|first1=Jon|last2=Lewis|first2=Mark|last3=Fahey|first3=Evan|last4=Vasquez|first4=Melvin Jafet|title=How do you pronounce IT?|work=TechTarget|access-date=24 May 2012|date=August 2007|archive-date=28 November 2016|archive-url=https://web.archive.org/web/20161128222956/http://searchservervirtualization.techtarget.com/definition/How-do-you-pronounce-IT|url-status=live}}</ref>) is a [[cloud computing]] service model where the provider offers use of [[application software]] to a client and manages all needed physical and software resources.{{sfn |Golding |2024|p=14}} SaaS is usually accessed via a [[web application]]. Unlike other [[software delivery]] models, it separates "the possession and ownership of software from its use".{{sfn|Dempsey |Kelliher|2018|p=2}} SaaS use began around 2000, and by 2023 was the main form of software application deployment.
{{Unreliable sources|date=November 2020}}
}}
'''Software as a service''' ('''SaaS''' {{IPAc-en|s|æ|s}}<ref>{{cite web |url= http://searchservervirtualization.techtarget.com/definition/How-do-you-pronounce-IT |last1 = Panker |first1 = Jon |last2=Lewis|first2=Mark |last3=Fahey|first3=Evan |last4=Vasquez|first4=Melvin Jafet |title= How do you pronounce IT? | work =TechTarget |access-date=24 May 2012|date=August 2007}}</ref>) is a [[software licensing]] and [[software delivery|delivery]] model in which [[software]] is licensed on a [[subscription]] basis and is centrally [[Internet hosting service|hosted]].<ref>{{cite news |last1=Turner |first1=Brian |title=What is SaaS? Everything you need to know about Software as a Service |url=https://www.techradar.com/news/what-is-saas |access-date=4 August 2020 |work=TechRadar |language=en}}</ref><ref>{{cite news |title=Definition of Software as a Service (SaaS) - Gartner Information Technology Glossary |url=https://www.gartner.com/en/information-technology/glossary/software-as-a-service-saas |access-date=4 August 2020 |work=Gartner |language=en}}</ref> SaaS is also known as "on-demand software" and Web-based/Web-hosted software.<ref>{{Cite web|url=https://www.salesforce.com/in/saas/|title=What is Software as a Service (SaaS): A Beginner's Guide - Salesforce|website=Salesforce.com|language=en-in|access-date=2018-09-27}}</ref>


Unlike most self-hosted software products, only one version of the software exists{{Citation needed|date=November 2024}} and only one [[operating system]] and configuration is supported. SaaS products typically run on rented [[infrastructure as a service]] (IaaS) or [[platform as a service]] (PaaS) systems including [[computer hardware|hardware]] and sometimes [[operating system]]s and [[middleware]], to accommodate rapid increases in usage while providing instant and continuous availability to customers. SaaS customers have the abstraction of limitless computing resources, while [[economy of scale]] drives down the cost. SaaS architectures are typically [[multi-tenant]]; usually they share resources between clients for efficiency, but sometimes they offer a siloed environment for an additional fee. Common SaaS revenue models include [[freemium]], [[subscription]], and usage-based fees. Unlike traditional software, it is rarely possible to buy a perpetual license for a certain version of the software.
SaaS is considered to be part of [[cloud computing]], along with [[infrastructure as a service]] (IaaS), [[platform as a service]] (PaaS), [[desktop as a service]] (DaaS),<ref>{{Cite web|url=http://blog.cimpl.com/what-is-everything-as-a-service-xaas|title=What is Everything-as-a-Service (XaaS)?|last=Cimpl|access-date=2016-07-26}}</ref> managed software as a service (MSaaS), [[mobile backend as a service]] (MBaaS), datacenter as a service (DCaaS), [[Cloud-based integration|integration platform as a service]] (iPaaS), and information technology management as a service (ITMaaS).


There are no specific [[software development]] practices that distinguish SaaS from other application development, although there is often a focus on frequent [[software testing|testing]] and releases.
SaaS apps are typically accessed by [[User (computing)|users]] using a [[thin client]], e.g. via a [[web browser]]. SaaS became a common delivery model for many business applications, including [[Productivity software|office software]], [[Instant messaging|messaging software]], payroll processing software, [[Database#Database management system|DBMS software]], management software, [[Computer-aided design|CAD software]], development software, [[gamification]], [[Virtualization software licensing|virtualization]],<ref name="ITChannelGlossary">{{cite web|url=http://en.compubase.net/IT-Telecom-Distribution-Glossary_a26.html|title=IT Channel Glossary|date=March 2013|publisher=CompuBase|access-date=13 February 2013}}</ref> [[accounting software|accounting]], [[Collaborative software|collaboration]], [[customer relationship management]] (CRM), [[management information system]]s (MIS), [[enterprise resource planning]] (ERP), invoicing, field service management, [[human resource management]] (HRM), [[talent acquisition]], [[learning management system]]s, [[content management]] (CM), [[geographic information system]]s (GIS), and [[IT service management#Service Desk|service desk management]].<ref>{{Cite web|date=24 June 2021|title=Saas startup ideas|url=https://www.startup.ind.in/2021/05/software-startup-ideas-saas-best-startup-ideas.html|url-status=live|website=Startup}}</ref>


==Cloud computing==
SaaS has been incorporated into the strategy of nearly all [[enterprise software]] companies.<ref>{{cite web|url=https://www.ibm.com/annualreport/2013/strategy-cloud.html|title=IBM cloud strategy|website=www.ibm.com|archive-url=https://web.archive.org/web/20150313082510/http://www.ibm.com/annualreport/2013/strategy-cloud.html|archive-date=2015-03-13}}</ref><ref>{{cite book|title=Engineering Software as a Service: An Agile Approach Using Cloud Computing|author1=Fox, A.|author2=Patterson, D.|date=3 Jan 2014|publisher=Strawberry Canyon LLC|asin=B00CCEHNUM}}</ref>
{{main|Cloud computing}}
Gartner forecasted that software as a service (SaaS) remains the largest market segment on public cloud services and is forecast to reach $122.6 billion in 2021. <ref>{{Cite web|title=Gartner Forecasts Worldwide Public Cloud End-User Spending to Grow 23% in 2021|url=https://www.gartner.com/en/newsroom/press-releases/2021-04-21-gartner-forecasts-worldwide-public-cloud-end-user-spending-to-grow-23-percent-in-2021|access-date=2021-06-23|website=Gartner|language=en}}</ref>
[[File:Comparison of on-premise, IaaS, PaaS, and SaaS.png|thumb|Comparison of on-premise, IaaS, PaaS, and SaaS|upright=2.4|center]]
[[Infrastructure as a service]] (IaaS) is the most basic form of [[cloud computing]], where infrastructure resources—such as physical computers—are not owned by the user but instead leased from a cloud provider. As a result, infrastructure resources can be increased rapidly, instead of waiting weeks for computers to ship and set up. IaaS requires time and expertise to make use of the infrastructure in the form of [[operating system]]s and [[Application software|application]]s.{{sfn|Rosati |Lynn|2020|p=22}} [[Platform as a service]] (PaaS) includes the operating system and [[middleware]], but not the applications.{{sfn|Rosati |Lynn|2020|p=23}}{{sfn|Ibrahim ''et al.''|2023|p=258}} SaaS providers typically use PaaS or IaaS services to run their applications.{{sfn|Rosati |Lynn|2020|p=23}}

Without IaaS, it would be extremely difficult to make an SaaS product scalable for a variable number of users while providing the instant and continual availability that customers expect.{{sfn|Dempsey |Kelliher|2018|p=17}} Most end users consume only the SaaS product and do not have to worry about the technical complexity of the physical hardware and operating system.{{sfn|Dempsey |Kelliher|2018|pp=17–18}} Because cloud resources can be accessed without any human interactions, SaaS customers are provided with the abstraction of limitless computing resources, while [[economy of scale]] drives down the cost.{{sfn|Dempsey |Kelliher|2018|p=19}} Another key feature of cloud computing is that software updates can be rolled out and made available to all customers nearly instantaneously.{{sfn|Dempsey |Kelliher|2018|p=33}} In 2019, SaaS was estimated to make up the plurality, 43 percent, of the cloud computing market while IaaS and PaaS combined account for approximately 25 percent.{{sfn|Rosati |Lynn|2020|p=20}}


==History==
==History==
In the 1960s, [[Computer multitasking|multitasking]] was invented, enabling [[mainframe computer]]s to serve multiple users simultaneously. Over the next decade, [[timesharing]] became the main business model for computing, and [[cluster computing]] enabled multiple computers to work together.{{sfn|Dempsey |Kelliher|2018|p=19}} Cloud computing emerged in the late 1990s with companies like [[Amazon (company)|Amazon]] (1994), [[Salesforce]] (1999), and Concur (1993) offering [[Internet]]-based [[Application software|application]]s on a pay-per-use basis. All of these focused on a single product to seize a high [[market share]].{{sfn|Dempsey |Kelliher|2018|pp=23, 31}} Beginning with [[Gmail]] in 2004, email services were some of the first SaaS products to be mass-marketed to consumers.{{sfn|Watt|2023|p=8}} The market for SaaS grew rapidly throughout the early twenty-first century.{{sfn|Dempsey |Kelliher|2018|pp=24, 32}}{{sfn|Rosati |Lynn|2020|p=20}} Initially viewed as a technological innovation, SaaS has come to be perceived more as a business model.{{sfn|Dempsey |Kelliher|2018|p=35}} By 2023, SaaS had become the primary method that companies deliver applications.{{sfn|Watt|2023|p=4}}
Centralized hosting of business applications dates back to the 1960s. Starting in that decade, [[IBM]] and other [[mainframe computer]] providers conducted a [[service bureau]] business, often referred to as [[time-sharing]] or [[utility computing]]. Such services included offering [[computing]] power and [[database]] storage to banks and other large organizations from their worldwide [[data center]]s.<ref>{{Cite book|last=OECD|url=https://books.google.com/books?id=wWOQDwAAQBAJ&q=Such+services+included+offering+computing+power+and+database+storage+to+banks+and+other+large+organizations+from+their+worldwide+data+centers.&pg=PA41|title=OECD/G20 Base Erosion and Profit Shifting Project Addressing the Tax Challenges of the Digital Economy, Action 1 - 2015 Final Report|date=2015-10-05|publisher=OECD Publishing|isbn=978-92-64-24104-6|language=en}}</ref>


Popular consumer SaaS products include all [[social media]] websites, email services like [[Gmail]] and its associated [[Google Docs Editors]],{{sfn|Watt|2023|pp=4, 8}} [[Skype]], [[Dropbox]],{{sfn|Clohessy ''et al.''|2020|p=40}} and entertainment products like [[Netflix]] and [[Spotify]].{{sfn|Watt|2023|p=9}} Enterprise SaaS products include [[Salesforce]]'s [[customer relationship management]] (CRM) software, [[SAP Cloud Platform]], and [[Oracle Cloud Enterprise Resource Planning]].{{sfn|Clohessy ''et al.''|2020|p=40}}
The expansion of the Internet during the 1990s brought about a new class of [[centralized computing]], called [[application service provider]]s (ASP). ASPs provided businesses with the service of hosting and managing specialized business applications, to reduce costs through central administration and the provider's specialization in a particular business application. Two of the largest ASPs were USI, which was headquartered in the Washington, DC area, and Futurelink Corporation, headquartered in [[Irvine, California]].<ref>{{cite web|last= Gaw |first= Jonathan | date = Oct 20, 1999 |title= Ladouceur Named CEO of FutureLink|url= https://www.latimes.com/archives/la-xpm-1999-oct-20-fi-24175-story.html |work= Los Angeles Times}}</ref>


==Revenue models==
Software as a service essentially extends the idea of the ASP model. The term ''software as a service'' (SaaS), however, is commonly used in more specific settings:
Some SaaS providers offer free services to consumers that are funded by means such as [[advertising]], [[affiliate marketing]], or selling consumer data.{{sfn|Dempsey |Kelliher|2018|p=48}} One of the most popular models for Internet start-ups and mobile apps is [[freemium]], where the company charges for continued use or a higher level of service. Even if the user never upgrades to the paid version, it helps the company capture a higher market share and displace customers from a rival.{{sfn|Dempsey |Kelliher|2018|pp=61-63}} However, the company's hosting cost increases with the number of users, regardless of whether it is successful at enticing them to use the paid version.{{sfn|Dempsey |Kelliher|2018|pp=63-64}} Another common model is where the free version only provides demonstration ([[crippleware]]). Online marketplaces may charge a fee on transactions to cover the SaaS provider costs.{{sfn|Dempsey |Kelliher|2018|p=48}} It used to be more common for SaaS products to be offered for a one-time cost, but this model is declining in popularity.{{sfn|Dempsey |Kelliher|2018|p=48}} A few{{sfn|Dempsey |Kelliher|2018|p=48}} SaaS products have [[open source]] code, called open SaaS. This model can provide advantages such as reduced deployment cost, less vendor commitment, and more [[Portability (computer science)|portable]] applications.{{sfn|Bhandari |Gupta|2019|p=21}}


The most common SaaS revenue models involve subscription and pay for usage.{{sfn|Dempsey |Kelliher|2018|pp=48, 57}} For customers, the advantages include reduced upfront cost, increased flexibility, and lower overall cost compared to traditional software with perpetual [[software license]]s.{{sfn|Clohessy ''et al.''|2020|pp=40-41}} In some cases, the steep one-time cost demanded by sellers of traditional software were out of the reach of [[Small and medium-sized enterprises|smaller business]]es, but pay-per-use SaaS models makes the software affordable.{{sfn|Dempsey |Kelliher|2018|p=2}} Usage may be charged based on the number of users, transactions, amount of storage spaced used, or other metrics.{{sfn|Dempsey |Kelliher|2018|p=57}} Many buyers prefer pay-per-usage because they believe that they are relatively light users of the software, and the seller benefits by reaching occasional users who would otherwise not buy the software.{{sfn|Dempsey |Kelliher|2018|p=57}} However, it can cause revenue uncertainty for the seller and increases the overhead for [[Electronic billing|billing]].{{sfn|Dempsey |Kelliher|2018|pp=57-58}}
* While most initial ASP's focused on managing and hosting third-party [[independent software vendor]]s' software, {{as of | 2012 | lc = on}} SaaS vendors typically develop and manage their own software.<ref>{{cite web|last= Software |first= Services|title= Software as a Service (SaaS)|url= https://searchcloudcomputing.techtarget.com/definition/Software-as-a-Service}}</ref>
* Whereas many initial ASPs offered more traditional [[client–server model|client–server]] applications, which require installation of software on users' [[personal computer]]s, later implementations can be [[Web application]]s which only requires a web browser to use.<ref>{{cite web |title=What is SaaS (Software as a Service)? Everything You Need to Know |url=https://searchcloudcomputing.techtarget.com/definition/Software-as-a-Service |website=SearchCloudComputing |language=en}}</ref>
* Whereas the [[software architecture]] used by most initial ASPs mandated maintaining a separate instance of the application for each business, {{as of | 2012 | lc = on}} SaaS services can utilize a [[multitenancy|multi-tenant]] architecture, in which the application serves multiple businesses and users, and partitions its data accordingly. {{Fact|date=November 2020}}


The subscription model of SaaS offers a continuing and renewable revenue stream to the provider, although vulnerable to cancellation.{{sfn|Dempsey |Kelliher|2018|p=2}} If a significant number are cancelled, the viability of the business can be placed in jeopardy.{{sfn|Dempsey |Kelliher|2018|p=2}} The ease of canceling a subscription and switching to a competitor leave customers with the leverage to get concessions from the seller.{{sfn|Dempsey |Kelliher|2018|p=11}} While recurring revenues can help the business and attract investors, the need for [[customer service]] skills in convincing the customer to renew their subscription is a challenge for providers switching to subscription from other revenue models.{{sfn|Dempsey |Kelliher|2018|p=66}}
The acronym first appeared in the goods and services description of a [[United States Patent and Trademark Office|USPTO]] [[trademark]], filed on September 23, 1985.<ref>{{Cite journal
|url=http://tsdr.uspto.gov/#caseNumber=73559543&caseType=SERIAL_NO&searchType=statusSearch
|title=USPTO Service Mark
|publisher=USPTO
|location=[[Alexandria, VA]]
}}</ref> ''DbaaS'' ([[database as a service]]) has emerged as a sub-variety of SaaS<ref>
{{cite book
| last = Ferrari
| first = Elena
| title = Access Control in Data Management Systems
| url = https://books.google.com/books?id=sfEXMcvWzyoC
| access-date = 2012-02-13
| series = Synthesis Lectures on Data Management
| year = 2010
| publisher = Morgan & Claypool Publishers
| isbn = 978-1-60845-375-7
| page = 77
| quote = [...] a new emerging option is represented by the Database as a Service (DbaaS) paradigm [...]. DbaaS is regulated by the same principles as Software as a Service (SaaS) and basically means the delivery of the typical functionalities of a database management system in the cloud.
}}
</ref> and is a type of [[cloud database]].


==Adoption==
[[Microsoft]] referred to SaaS as "software plus services" for a few years.<ref>{{cite magazine |url=http://www.infoworld.com/article/2642618/techology-business/microsoft-describes-software-plus-services.html|title= Microsoft describes software plus services|magazine=InfoWorld|access-date=7 February 2017|date= 26 July 2007}}</ref>
SaaS products are typically accessed via a [[web browser]] as a publicly available [[web application]].{{sfn|Garbis |Chapman|2021|p=185}}{{sfn|Watt|2023|p=4}} This means that customers can access the application anywhere from any device without needing to [[Installation (computer programs)|install]] or [[software update|update]] it.{{sfn|Watt|2023|p=4}}{{sfn|Kinnunen|2022|pp=123-124}} SaaS providers often try to minimize the difficulty of signing up for the product.{{sfn |Golding |2024|p=18}} Many capitalize on the service-oriented structure to respond to customer feedback and evolve their product quickly to meet demands. This can enable customers to believe in the continued improvement of the product and help the SaaS provider get customers from an established traditional software company that likely can offer a deeper feature set.{{sfn |Golding |2024|p=20}}{{sfn|Watt|2023|p=15}}


Although on-premises software is often less secure than SaaS alternatives,{{sfn|Watt|2023|pp=6, 16}} security and privacy are among the main reasons cited by companies that do not adopt SaaS products.{{sfn|Ibrahim ''et al.''|2023|pp=264, 266, 268}} SaaS companies have to protect their publicly available offerings from abuse, including [[denial-of-service]] attacks and hacking.{{sfn|Garbis |Chapman|2021|p=186}} They often use technologies such as [[access control]], [[authentication]], and [[encryption]] to protect [[data confidentiality]].{{sfn|Ibrahim ''et al.''|2023|pp=264, 266, 268}} Nevertheless, not all companies trust SaaS providers to keep sensitive data secured.{{sfn|Ibrahim ''et al.''|2023|pp=264, 266, 268}} The vendor is responsible for [[software update]]s, including [[software patch|security patches]], and for protecting the customers' data.{{sfn|Kinnunen|2022|pp=123-124}} SaaS systems inherently have a greater [[Latency (engineering)|latency]] than software run on-premises due to the time for network packets to be delivered to the cloud facility. This can be prohibitive for some uses, such as time-sensitive industrial processes or warehousing.{{sfn|Kinnunen|2022|pp=137, 139}}
==Distribution and pricing==
The cloud (or SaaS) model has no physical need for indirect distribution because it is not distributed physically and is deployed almost instantaneously, thereby negating the need for traditional partners and middlemen. Unlike traditional software, which is conventionally sold as a [[perpetual license]] with an up-front cost (and an optional ongoing support fee), SaaS providers generally price applications using a subscription fee, most commonly a monthly fee or an annual fee.<ref>{{cite web |title=Software as a Service (SaaS) Definition and Solutions |url=http://www.cio.com/article/109704/Software_as_a_Service_SaaS_Definition_and_Solutions |work=CIO |last=Levinson |first=Meridith |date=2007-05-15 |access-date=2015-03-24}}</ref> Consequently, the initial setup cost for SaaS is typically lower than the equivalent enterprise software. SaaS vendors typically price their applications based on some usage parameters, such as the number of users using the application. However, because in a SaaS environment customers' data reside with the SaaS vendor, opportunities also exist to charge per transaction, event, or other units of value, such as the number of processors required.<ref name="box.com">{{cite web|url=https://bvp.box.com/shared/enwiki/static/05d7zb2zi64q7rbv1opl.pdf|title=Software as a Service Pricing Strategies|date=July 2013|author=Byron Deeter and Ryan Jung}}</ref>


The rise of SaaS products is one factor leading many companies switched from budgeting for [[IT]] as a [[capital expenditure]] to an [[operating expenditure]].{{sfn|Tallon ''et al.''|2020|p=2}} The process of migration to SaaS and supporting it can also be a significant cost that must be accounted for.{{sfn|Kinnunen|2022|p=124}}{{sfn|Dempsey |Kelliher|2018|p=66}}
The relatively low cost for [[Provisioning#User provisioning|user provisioning]] (i.e., setting up a new customer) in a multi-tenant environment enables some SaaS vendors to offer applications using the [[freemium]] model.<ref name="box.com"/> In this model, a free service is made available with limited functionality or scope, and fees are charged for enhanced functionality or larger scope.<ref name="box.com"/>


==Development==
A key driver of SaaS growth is SaaS vendors' ability to provide a price that is competitive with on-premises software. This is consistent with the traditional rationale for outsourcing IT systems, which involves applying [[Economy of scale|economies of scale]] to application operation, i.e., an outside service provider may be able to offer better, cheaper, more reliable applications.<ref>{{Cite web|url=https://www.business2community.com/business-innovation/build-vs-buy-know-buy-software-build-01755435|title=Build vs. Buy: How to Know When to Buy Software or Build It Yourself|website=Business 2 Community|access-date=2020-02-22}}</ref>
[[File:SaaS architecture.jpg|thumb |A SaaS architecture. All customers are running the same version of the software on the same platform.{{sfn |Golding |2024|p=25}}]]
A challenge for SaaS providers is that demand is not known in advance. Their system must have enough slack to be able to handle all users without turning any away, but without paying for too many resources that will be unnecessary. If resources are static, they are guaranteed to be wasted during non-peak time.{{sfn|Dempsey |Kelliher|2018|p=36}} Sometimes cheaper off-peak rates are offered to balance the load and reduce waste.{{sfn|Dempsey |Kelliher|2018|p=37}} The expectation for continuous service is so high that outages in SaaS software are often reported in the news.{{sfn|Dempsey |Kelliher|2018|p=39}}


There are not specific [[software development]] practices that differentiate SaaS from other application development.{{sfn|Watt|2023|p=11}} SaaS products are often released early and often to take advantage of the flexibility of the SaaS delivery model.{{sfn|Watt|2023|p=16}} [[Agile software development]] is commonly used to support this release schedule.{{sfn|Younas ''et al.''|2018|p=142}} Many SaaS developers use [[test-driven development]], or otherwise emphasize frequent [[software testing]], because of the need to ensure availability of their service and rapid deployment.{{sfn|Watt|2023|pp=11-12, 16}} [[Domain-driven design]], in which business goals drive development, is popular because SaaS products must sell themselves to the customer by being useful.{{sfn|Watt|2023|p=12}} SaaS developers do not know in advance which devices customers will try to access the product from—such as a desktop computer, tablet, or smartphone—and supporting a wide range of devices is often an important concern for the [[Front-end web development|front-end development]] team.{{sfn|Watt|2023|pp=13-14}} [[Progressive web application]]s allow some functionality to be available even if the device is offline.{{sfn|Watt|2023|p=13}}
==Architecture==
Most SaaS providers offer a [[Multitenancy|multi-tenant]] architecture. With this model, a single [[software versioning|version]] of the application, with a single [[computer configuration|configuration]] ([[personal computer hardware|hardware]], [[computer network|network]], [[operating system]]), is used for all customers ("tenants"). To support [[scalability]], the application can be installed on multiple machines (called [[horizontal scaling]]). In some cases, a second version of the application is set up to offer a select group of customers access to pre-release versions of the applications (e.g., a [[beta version]]) for [[Software testing|testing]] purposes. This is contrasted with traditional software, where multiple physical copies of the software — each potentially of a different version, with a potentially different configuration, and often customized — are installed across various customer sites.<ref>{{cite book |last1=Hacigümüş |first1=Hakan |last2=Balakrishna |first2=R. Iyer |last3=Chen |first3=Li |last4=Mehrotra |first4=S. |title=Executing SQL over encrypted data in the database-service-provider model |journal=Proceedings of the 2002 ACM SIGMOD International Conference on Management of Data |date=2002 |pages=216–227 |doi=10.1145/564691.564717 |isbn=978-1581134971 |citeseerx=10.1.1.64.8974 |s2cid=6241358 }}</ref>


SaaS applications predominantly offer integration protocols and [[application programming interface]]s (APIs) that operate over a [[wide area network]].{{sfn|Manvi|Shyam|2021|p=105}}
Although an exception rather than the norm, some SaaS providers do not use multitenancy, or use other mechanisms—such as [[virtualization]]—to cost-effectively manage a large number of customers in place of multitenancy.<ref>{{cite web |title=Workstream prefers virtualization to multi-tenancy |work = [[ZDNet]] | type = [[World Wide Web]] log |publisher = CBS Interactive |url=http://www.zdnet.com/article/workstream-prefers-virtualization-to-multi-tenancy/ |access-date=22 January 2016 |date=19 October 2007 |first=Phil |last=Wainewright}}</ref> Whether multitenancy is a necessary component for software as a service is debatable.<ref>{{cite web|url=https://docs.microsoft.com/en-gb/archive/blogs/gianpaolo/i-cant-believe-we-are-still-talking-about-whether-saas-multi-tenancy|title=I can't believe we are still talking about whether saas == multi-tenancy...|last=Carraro|first=Gianpaolo|date=21 June 2008|work=MS Developer network|publisher=Microsoft|type=blog|access-date=24 April 2011}}</ref>
===Architecture===
SaaS architecture varies significantly from product to product.{{sfn |Golding |2024|p=47}} Nevertheless, most SaaS providers offer a [[Multitenancy|multi-tenant]] architecture.{{sfn|Garbis |Chapman|2021|p=185}} With this model, a single [[software versioning|version]] of the application, with a single [[computer configuration|configuration]] ([[computer hardware|hardware]], [[computer network|network]], [[operating system]]), is used for all customers ("tenants").{{sfn|Golding|2024|pp=25-26}} This means that the company does not need to support multiple versions and configurations.{{sfn|Watt|2023|p=4}} The architectural shift from each customer running their own version of the software on their own hardware affects many aspects of the application's design and security features.{{sfn|Golding|2024|pp=25-26}} In a multi-tenant architecture, many [[System resource|resources]] can be used by different tenants or shared between multiple tenants.{{sfn |Golding |2024|p=26}}


[[File:Application and control planes of a SaaS product.png|thumb|upright=2|Application and control planes of a SaaS product|center]]
== Vertical vs horizontal SaaS ==
The structure of a typical SaaS application can be separated into application and control planes.{{sfn |Golding |2024|p=27}} SaaS products differ in how these planes are separated, which might be closely integrated or loosely coupled in an event- or message-driven model.{{sfn |Golding |2024|p=44}} The control plane is in charge of directing the system and covers functionality such as tenant onboarding, billing, and metrics, as well as the system used by the SaaS provider to configure, manage, and operate the service.{{sfn |Golding |2024|p=27}} Many SaaS products are offered at different levels of service for different prices, called [[tiering]].<!-- redlink, notable pricing strategy --> This can also affect the architecture for both planes, although it is commonly placed in the control plane.{{sfn |Golding |2024|p=40}} Unlike the application plane, the services in the control plane are not designed for multitenancy.{{sfn |Golding |2024|p=28}}
Horizontal SaaS and vertical SaaS are different models of cloud computing services.<ref>{{cite news|url=https://www.forbes.com/sites/forbestechcouncil/2020/07/10/horizontal-to-vertical-to-micro-saas-a-cloud-led-evolution-transforming-businesses/?sh=2cb2f13f3dac|title=Horizontal to Vertical to Micro-SaaS|work=[[Forbes]]|first=Anbu|last=Muppidathi|date=July 10, 2020}}</ref> Horizontal SaaS targeting a broad variety of customers, generally without regard to their industry. Some popular examples of horizontal SaaS vendors are [[Salesforce]] and [[HubSpot]]. Vertical SaaS, on the other hand, refers to [[niche market]] targeting a narrower variety of customers to meet their specific requirements.


[[File:Tenant routing for SaaS example.png|thumb|An example architecture where some services are shared, while others are allocated on a per-tenant basis{{sfn |Golding |2024|p=38}}|upright=2|center]]
==Characteristics==
The application plane—which varies a great deal depending on the nature of the product—implements the core functionality of the SaaS product.{{sfn |Golding |2024|p=28}} Key design issues include separating different tenants so they cannot view or change other tenants' data or resources.{{sfn |Golding |2024|pp=36-37}} Except for the simplest SaaS applications, some [[microservices]] and other resources are allocated on a per-tenant basis, rather than shared between all tenants.{{sfn |Golding |2024|p=37}} Routing functionality is necessary to direct tenant requests to the appropriate services.{{sfn |Golding |2024|p=38}}
Although not all software-as-a-service applications share all the following traits, the characteristics below are common among many of them:


[[File:Example SaaS deployment architecture.png|thumb|Example SaaS deployment architecture that offers complete siloing on a premium tier and mixed [[microservice]] deployment to other tenants{{sfn |Golding |2024|p=76}} |upright=2|center]]
===Configuration and customization===
Some SaaS products do not share any resources between tenants—called siloing. Although this negates many of the efficiency benefits of SaaS, it makes it easier to migrate [[legacy software]] to SaaS{{sfn |Golding |2024|p=55}} and is sometimes offered as a premium offering at a higher price.{{sfn |Golding |2024|pp=55, 74-75}} Pooling all resources might make it possible to achieve higher efficiency,{{sfn |Golding |2024|p=69}} but an outage affects all customers so availability must be prioritized to a greater extent.{{sfn |Golding |2024|p=70}} Many systems use a combination of both approaches, pooling some resources and siloing others.{{sfn |Golding |2024|pp=75-76}} Other companies group multiple tenants into pods and share resources between them.{{sfn |Golding |2024|p=78}}
SaaS applications similarly support what is traditionally known as application [[Computer configuration|configuration]]. In other words, like traditional enterprise software, a single customer can alter the set of configuration options (a.k.a. [[Parameter (computer programming)|parameter]]s) that affect its functionality and [[look-and-feel]]. Each customer may have its own settings (or: parameter values) for the configuration options. The application can be customized to the degree it was designed for based on a set of predefined configuration options.{{FACT|date=November 2020}}


==Legal issues==
For example, to support customers' common need to change an application's look-and-feel so that the application appears to be having the customer's [[brand]] (or—if so desired—[[co-branding|co-branded]]), many SaaS applications let customers provide (through a [[self-service]] interface or by working with application provider staff) a custom logo and sometimes a set of custom colors. The customer cannot, however, change the [[page layout]] unless such an option was designed for.{{FACT|date=November 2020}}
In the United States, constitutional [[search warrant]] laws do not protect all forms of SaaS dynamically stored data. The result is that governments may be able to request data from SaaS providers without the owner's consent.<ref>{{cite web |last=Arthur |first=Charles |url=https://www.theguardian.com/technology/blog/2010/dec/14/chrome-os-richard-stallman-warning |title=Google's ChromeOS means losing control of the data, warns GNU founder Richard Stallman |work=The Guardian |place=[[United Kingdom|UK]] |date=2010-12-14 |access-date=2012-02-16 |archive-date=2014-02-28 |archive-url=https://web.archive.org/web/20140228133145/http://www.theguardian.com/technology/blog/2010/dec/14/chrome-os-richard-stallman-warning |url-status=live }}</ref><ref>{{cite web |title=Why Richard Stallman Takes No Shine to Chrome |url=http://www.technewsworld.com/story/Why-Richard-Stallman-Takes-No-Shine-to-Chrome-71469.html |work=Linux Insider |last=Adhikari |first=Richard |date=2010-12-15 |access-date=2015-03-24 |archive-date=2021-01-23 |archive-url=https://web.archive.org/web/20210123151909/http://www.technewsworld.com/story/Why-Richard-Stallman-Takes-No-Shine-to-Chrome-71469.html }}</ref>


Certain [[open-source license]]s such as [[GNU_General_Public_License|GPL-2.0]] do not explicitly grant rights permitting distribution as a SaaS product in Germany.{{sfn|Ballhausen|2014|p=61}}
===Accelerated feature delivery===
SaaS applications are often updated more frequently than traditional software,<ref>{{cite web |url = http://blogs.gartner.com/guy-creese/2010/05/18/saas-vs-software-the-development-cycle-for-saas-is-usually-not-always-faster/ |title = SaaS vs. Software: The Release Cycle for SaaS Is Usually (Not Always) Faster |work = Blog |publisher = Gartner |date = 18 May 2010 |first = Guy |last = Creese |access-date = 24 April 2011}}</ref> in many cases on a weekly or monthly basis. This is enabled by several factors:
* The application is hosted centrally, so an update is decided and executed by the provider, not by customers.
* The application only has a single configuration, making development testing faster.
* The application vendor does not have to expend resources updating and maintaining backdated versions of the software, because there is only a single version.
* The application vendor has access to all customer data, expediting [[software design|design]] and [[regression testing]].
* The service provider has access to user behavior within the application (usually via [[web analytics]]), making it easier to identify areas worthy of improvement.

Accelerated feature delivery is further enabled by [[agile software development]] methodologies.<ref>{{cite web |url = http://www.devx.com/SaaS/Article/36357/0/page/1 |title = Jumping to SaaS? Take Agile Software Development Along with You |work = DevX |publisher = QuinStreet |date = 8 January 2008 |access-date = 24 April 2011 |first = Eric | last = Kuhnen}}</ref> Such methodologies, which have evolved in the mid-1990s, provide a set of [[software development tool]]s and practices to support frequent software releases.

===Open integration protocols===
Because SaaS applications cannot access a company's internal systems (databases or internal services), they predominantly offer integration protocols and [[application programming interface]]s (APIs) that operate over a [[wide area network]].<ref>{{cite news |last1=Dulin |first1=Oleg |title=3 sets of APIs your SaaS platform needs |url=https://www.infoworld.com/article/3014636/3-sets-of-api-your-saas-platform-needs.html |access-date=4 August 2020 |work=InfoWorld |date=15 December 2015 |language=en}}</ref>

The ubiquity of SaaS applications and other Internet services and the standardization of their API technology has spawned the development of [[Mashup (web application hybrid)|mashup]]s, which are lightweight applications that combine data, presentation, and functionality from multiple services, creating a compound service. Mashups further differentiate SaaS applications from on-premises software as the latter cannot be easily integrated outside a company's [[firewall (computing)|firewall]].

===Collaborative (and "social") functionality===
Inspired by the development of the different internet networking services and the so-called ''[[web 2.0]]'' functionality, many SaaS applications offer features that let their users [[collaboration|collaborate]] and [[information sharing|share information]].

For example, many [[project management]] applications delivered in the SaaS model offer—in addition to traditional project planning functionality—collaboration features letting users comment on tasks and plans and share documents within and outside an organization. Several other SaaS applications let users vote on and offer new feature ideas.

Although some collaboration-related functionality is also integrated into on-premises software, (implicit or explicit) collaboration between users or different customers is only possible with centrally hosted software.

===OpenSaaS===
'''OpenSaaS''' refers to software as a service (SaaS) based on [[Open-source software|open source]] code. Similar to SaaS applications, Open SaaS is a web-based application that is hosted, supported and maintained by a service provider. While the roadmap for Open SaaS applications is defined by its community of users, upgrades and product enhancements are managed by a central provider. The term was coined in 2011 by [[Dries Buytaert]], creator of the [[Drupal]] content management framework.<ref>{{cite web
|url = http://buytaert.net/acquia-product-strategy-and-vision
|title = Acquia product strategy and vision
|publisher = Dries Buytaert weblog
|date = 24 January 2011
|first = Dries
|last = Buytaert
|access-date = 5 October 2014
}}</ref>

Andrew Hoppin, a former Chief Information Officer for the [[New York State Senate]], has been a vocal advocate of OpenSaaS for government, calling it "the future of government innovation." He points to [[WordPress]] and Why Unified as a successful example of an OpenSaaS software delivery model that gives customers "the best of both worlds, and more options. The fact that it is open source means that they can start building their websites by self-hosting WordPress and customizing their website to their heart’s content. Concurrently, the fact that WordPress is SaaS means that they don’t have to manage the website at all -- they can simply pay WordPress.com to host it."<ref>{{cite web
|url = http://opensource.com/government/14/1/opensaas-and-government-innovation
|title = OpenSaaS and the future of government innovation
|publisher = OpenSource.com
|date = 9 January 2014
|first = Andrew
|last = Hoppin
|access-date = 21 September 2014
}}</ref>

==Adoption drivers==
Several important changes to the [[software]] market and technology landscape have facilitated the acceptance and growth of SaaS:
* The growing use of web-based [[user interface]]s by applications, along with the proliferation of associated practices (e.g., [[web design]]), continuously decreased the need for traditional client-server applications. Consequently, traditional software vendor's investment in software based on [[fat client]]s has become a disadvantage (mandating ongoing support), opening the door for new software vendors offering a [[user experience]] perceived as more "modern".
* The standardization of web page technologies ([[HTML]], [[JavaScript]], [[CSS]]), the increasing popularity of [[web development]] as a practice, and the introduction and ubiquity of [[web application framework]]s like [[Ruby on Rails]] or [[Laravel]] ([[PHP]]) gradually reduced the cost of developing new software services, and enabled new providers to challenge traditional vendors.
* The increasing penetration of [[broadband Internet access]] enabled remote centrally hosted applications to offer speed comparable to on-premises software.
* The standardization of the [[HTTP Secure|HTTPS]] protocol as part of the web stack provided universally available lightweight [[computer security|security]] that is sufficient for most everyday applications.
* The introduction and wide acceptance of lightweight [[system integration|integration]] [[communications protocol|protocol]]s such as [[Representational State Transfer]] (REST) and SOAP enabled affordable integration between SaaS applications (residing in the cloud) with internal applications over wide area networks and with other SaaS applications.

== Adoption challenges ==
Some limitations slow down the acceptance of SaaS and prohibit it from being used in some cases:
* Because data is stored on the vendor's servers, data security becomes an issue.<ref name= Forrester>{{cite web |url = http://community.forrester.com/message/10906 |title = SaaS And The Everlasting Security Concerns | work = Community |publisher = [[Forrester Research]] |date = 20 December 2010 |access-date = 24 April 2011 |first = Miroslaw |last = Lisserman}}</ref>
* SaaS applications are hosted in the cloud, far away from the application users. This introduces latency into the environment; for example, the SaaS model is not suitable for applications that demand response times in the milliseconds ([[Online transaction processing|OLTP]]).
* Multi-tenant architectures, which drive cost efficiency for service providers, limit customization of applications for large clients, inhibiting such applications from being used in scenarios (applicable mostly to large enterprises) for which such customization is necessary.
* Some business applications require access to or integration with customer's current data. When such data are large in volume or sensitive (e.g. end-users' personal information), integrating them with remotely hosted software can be costly or risky, or can conflict with data governance regulations.
* Constitutional search/seizure warrant laws do not protect all forms of SaaS dynamically stored data. The end result is that a link is added to the chain of security where access to the data, and, by extension, misuse of these data, are limited only by the assumed honesty of third parties or government agencies able to access the data on their own recognizance.<ref>{{cite web|last=Arthur |first=Charles |url=https://www.theguardian.com/technology/blog/2010/dec/14/chrome-os-richard-stallman-warning |title=Google's ChromeOS means losing control of the data, warns GNU founder Richard Stallman | work = The Guardian | place = [[United Kingdom|UK]] | date= 2010-12-14 |access-date= 2012-02-16}}</ref><ref>{{cite web |title=Why Richard Stallman Takes No Shine to Chrome |url= http://www.technewsworld.com/story/Why-Richard-Stallman-Takes-No-Shine-to-Chrome-71469.html |work=Linux Insider |last= Adhikari |first=Richard |date=2010-12-15 |access-date= 2015-03-24}}</ref><ref>{{cite web|last= Stallman |first= Richard|title= Who does that server really serve? |url= https://www.gnu.org/philosophy/who-does-that-server-really-serve.html |publisher=[[GNU]] Project | work = [[Boston Review]] |access-date=15 January 2012 |date= 2011-09-20}}</ref><ref>{{cite web|last= Hill|first= Benjamin Mako |title= Show Me the Code|url= http://revealingerrors.com/show_me_the_code |work= Revealing Errors |access-date= 15 January 2012 |author-link= Benjamin Mako Hill|date= 1 Feb 2009}}</ref>
* Switching SaaS vendors may involve the slow and difficult task of transferring very large data files over the Internet.
* Organizations that adopt SaaS may find they are forced into adopting new versions, which might result in unforeseen training costs, an increase in the probability that a user might make an error or instability from bugs in the newer software.
* Should the vendor of the software go out of business or suddenly EOL the software, the user may lose access to their software unexpectedly, which could destabilize their organization's current and future projects, as well as leave the user with older data they can no longer access or modify.
* Relying on an Internet connection means that data is transferred to and from a SaaS firm at Internet speeds, rather than the potentially higher speeds of a firm's internal network.<ref>{{cite web|last=Gallaugher |first= John |url=http://catalog.flatworldknowledge.com/bookhub/reader/3816?cid=622401&e=fwk-38086-ch12 |title= Information Systems: A Manager's Guide to Harnessing Technology | work = Catalog |publisher= Flat World Knowledge |access-date= 2012-04-21}}</ref>
* Can the SaaS hosting company guarantee the uptime level agreed in the SLA (service level agreement)?
* Not being available to consumers, techies, and power users for some reason (at least to Microsoft)?

The standard model also has limitations:
* Compatibility with hardware, other software, and operating systems.<ref>{{cite news |url= http://cloudcomputingsec.com/283/cloud-software-as-a-service-saas-in-cloud-computing-services.html |title= Cloud Software as a Service (SaaS) in Cloud Computing. This is not right. Services|publisher= CloudComputingSec |year= 2011 |access-date= 2011-12-15 }}</ref>
* Licensing and compliance problems (unauthorized copies of the software program putting the organization at risk of fines or litigation).
* Maintenance, support, and patch revision processes.

===Healthcare applications===
According to a survey by the [[Healthcare Information and Management Systems Society]] , 83% of US IT healthcare organizations are now using cloud services with 9.3% planning to, whereas 67% of IT healthcare organizations are currently running SaaS-based applications.<ref>{{cite web |title=2014 HIMSS Analytics Cloud Survey |url=http://s3.amazonaws.com/rdcms-himss/files/production/public/FileDownloads/Final%20Report%20061214.pdf |publisher=[[Healthcare Information and Management Systems Society]] |access-date=22 November 2020 |date=June 2014|via=[[Amazon Web Services]]}}</ref>

== Data escrow ==
''Software as a service data escrow'' is the process of keeping a copy of critical software-as-a-service application data with an independent third party. Similar to [[source code escrow]], where critical software [[source code]] is stored with an independent third party, SaaS data escrow applies the same logic to the data within a SaaS application. It allows companies to protect and insure all the data that resides within SaaS applications, protecting against [[data loss]].<ref>{{cite web |title = Develop a Framework for SaaS Application Business Continuity Risk Mitigation |url = http://www.gartner.com/DisplayDocument?id=1118412 |publisher = Gartner |date = 7 August 2009 |access-date = 24 April 2011 |first1 = Deborah R |last1 = Wilson |first2 = Alexa |last2 = BonaPart}}</ref>

There are many and varied reasons for considering SaaS data escrow including concerns about vendor [[bankruptcy]],<ref>{{cite web|last =May|first =Richard | place = [[United Kingdom|UK]] |title=Software Escrow whitepaper | publisher = Virtual DCS | url= http://www.virtualdcs.co.uk/files/SoftwareasaServiceandEscrow.pdf}}</ref><ref>{{Cite web|url=http://www.virtualdcs.co.uk/blog/is-escrow-dead|title=Software Escrow: Is Escrow dead?|date=2012-06-14|language=en-GB|access-date=2016-09-06}}</ref> unplanned service outages, and potential [[data loss]] or corruption.
Many businesses either ensure that they are complying with their [[data governance]] standards or try to enhance their reporting and [[business analytics]] against their SaaS data. Research conducted by Clearpace Software Ltd. into the growth of SaaS showed that 85 percent of the participants wanted to take a copy of their SaaS data. A third of these participants wanted a daily copy.<ref>{{Cite journal |title = SaaS Data Escrow International Report |url = http://www.rainstor.com/assets/downloads/SaaS_Data_Escrow_International_Report.pdf |journal = [[RainStor]] |publisher = Clearpace Software |date = 14 December 2009 |access-date = 24 April 2011 |location = [[Gloucester, England]] |quote = Only 15 per cent of those who currently use, or plan to use, SaaS have no inclination to keep a copy of their data.}}</ref>

==Criticism==
One notable criticism of SaaS comes from [[Richard Stallman]] of the [[Free Software Foundation]], who refers to it as ''Service as a Software Substitute'' (SaaSS).<ref>{{cite web |title=Who does that server really serve? | publisher = The Free Software Foundation | url= https://www.gnu.org/philosophy/who-does-that-server-really-serve.en.html |work= GNU Operating System |last= Stallman |first= Richard |access-date=2015-03-24}}</ref> He considers the use of SaaSS to be a violation of the principles of [[free software]].<ref>{{cite web |url = http://bostonreview.net/richard-stallman-free-software-DRM |title = Who Does That Server Really Serve? | work = Boston Review |date = 18 March 2010 |first = Richard |last = Stallman |access-date = 6 July 2013}}</ref> According to Stallman:
{{quote |text=With SaaSS, the users do not have even the executable file that does their computing: it is on someone else's server, where the users can't see or touch it. Thus it is impossible for them to ascertain what it really does, and impossible to change it.}}

==See also==
*[[Application security]]
*[[Application service provider]]
*[[Cloud-based integration]]
* [[As a service|List of 'as a service' service types]]
*[[Servicizing]]
*[[Subscription computing]]


==References==
==References==


{{Reflist |32em}}
{{Reflist |32em}}
==Sources==

{{refbegin|indent=yes}}

*{{cite journal |last1=Ballhausen |first1=Miriam |title=OpenSaaS: Using Free and Open Source Software as Software-as-a-Service |journal=International Free and Open Source Software Law Review |date=2014 |volume=6 |pages=61-68 |url=https://www.jolts.world/index.php/jolts/article/view/103 |issn=2666-8106}}
*{{cite book |last1=Bhandari |first1=Guru Prasad |last2=Gupta |first2=Ratneshwer |title=Advancing Consumer-Centric Fog Computing Architectures |date=2019 |publisher=IGI Global |isbn=978-1-5225-7149-0 |pages=1–37 |language=en |chapter=An Overview of Cloud and Edge Computing Architecture and Its Current Issues and Challenges}}
*{{cite book |last1=Dempsey |first1=David |last2=Kelliher |first2=Felicity |title=Industry Trends in Cloud Computing: Alternative Business-to-Business Revenue Models |date=2018 |publisher=Springer International Publishing |isbn=978-3-319-87693-1 |language=en}}
*{{cite book |last1=Garbis |first1=Jason |last2=Chapman |first2=Jerry W. |title=Zero Trust Security: An Enterprise Guide |date=2021 |publisher=Apress |isbn=978-1-4842-6703-5 |language=en}}
*{{cite book |last1=Golding |first1=Tod |title=Building Multi-Tenant SaaS Architectures |date=2024 |publisher=O'Reilly Media |isbn=978-1-0981-4061-8 |language=en}}
*{{cite book |last1=Ibrahim |first1=Ahmed Mamdouh Abdelfatah |last2=Abdullah |first2=Norris Syed |last3=Bahari |first3=Mahadi |title=Software as a Service Challenges: A Systematic Literature Review |date=2023 |publisher=Springer International Publishing |isbn=978-3-031-18344-7 |pages=257–272 |ref={{sfnref|Ibrahim et al.|2023}} |language=en}}
*{{cite book |last1=Kinnunen |first1=Juha |title=ERP as Software-as-a-Service: Factors Depicting Large Enterprises Cloud Adoption |date=2022 |publisher=Springer International Publishing |isbn=978-3-030-99191-3 |pages=123–142 |language=en}}
* {{cite book |last1=Lynn |first1=Theo |last2=Mooney |first2=John G. |last3=Rosati |first3=Pierangelo |last4=Fox |first4=Grace |title=Measuring the Business Value of Cloud Computing |date=2020 |publisher=Springer Nature |isbn=978-3-030-43198-3 |language=en}}
**{{cite book |last1=Tallon |first1=Paul P. |last2=Mooney |first2=John G. |last3=Duddek |first3=Marvin |title=Measuring the Business Value of Cloud Computing |date=2020 |publisher=Springer International Publishing |isbn=978-3-030-43198-3 |pages=1–17 |language=en |chapter=Measuring the Business Value of IT|ref={{sfnref|Tallon et al.|2020}}}}
**{{cite book |last1=Rosati |first1=Pierangelo |last2=Lynn |first2=Theo |title=Measuring the Business Value of Cloud Computing |date=2020 |publisher=Springer International Publishing |isbn=978-3-030-43198-3 |pages=19–37 |language=en |chapter=Measuring the Business Value of Infrastructure Migration to the Cloud}}
**{{cite book |last1=Clohessy |first1=Trevor |last2=Acton |first2=Thomas |last3=Morgan |first3=Lorraine |title=Measuring the Business Value of Cloud Computing |date=2020 |publisher=Springer International Publishing |isbn=978-3-030-43198-3 |pages=39–55 |ref={{sfnref|Clohessy et al.|2020}} |language=en |chapter=The SaaS Payoff: Measuring the Business Value of Provisioning Software-as-a-Service Technologies}}
*{{cite book |title=Cloud Computing: Concepts and Technologies |page=105 |isbn=9781000337952 |last1=Manvi |first1=Sunilkumar |last2=Shyam |first2=Gopal |date=2021 |publisher=CRC Press }}
*{{cite book |last1=Watt |first1=Andy |title=Building Modern SaaS Applications with C# And . NET: Build, Deploy, and Maintain Professional SaaS Applications |date=2023 |publisher=Packt |isbn=978-1-80461-087-9 |language=en}}
*{{cite journal |last1=Younas |first1=Muhammad |last2=Jawawi |first2=Dayang N. A. |last3=Ghani |first3=Imran |last4=Fries |first4=Terrence |last5=Kazmi |first5=Rafaqut |title=Agile development in the cloud computing environment: A systematic review |journal=Information and Software Technology |date=2018 |volume=103 |pages=142–158 |doi=10.1016/j.infsof.2018.06.014 |url=https://www.sciencedirect.com/science/article/abs/pii/S0950584918301319 |ref={{sfnref|Younas et al.|2018}} |issn=0950-5849}}
{{refend}}
==Further reading==
*{{cite book |last1=Fox |first1=Armando |last2=Patterson |first2=David A. |title=Engineering Software As a Service: An Agile Approach Using Cloud Computing |date=2020 |publisher=Pogo Press |isbn=978-1-7352338-0-2 |language=en}}
{{Software distribution}}
{{Software distribution}}
{{Cloud computing}}
{{Cloud computing}}

Latest revision as of 01:42, 1 January 2025

"SaaS" redirects here. Not to be confused with Security as a service.

Software as a service (SaaS /sæs/[1]) is a cloud computing service model where the provider offers use of application software to a client and manages all needed physical and software resources.[2] SaaS is usually accessed via a web application. Unlike other software delivery models, it separates "the possession and ownership of software from its use".[3] SaaS use began around 2000, and by 2023 was the main form of software application deployment.

Unlike most self-hosted software products, only one version of the software exists[citation needed] and only one operating system and configuration is supported. SaaS products typically run on rented infrastructure as a service (IaaS) or platform as a service (PaaS) systems including hardware and sometimes operating systems and middleware, to accommodate rapid increases in usage while providing instant and continuous availability to customers. SaaS customers have the abstraction of limitless computing resources, while economy of scale drives down the cost. SaaS architectures are typically multi-tenant; usually they share resources between clients for efficiency, but sometimes they offer a siloed environment for an additional fee. Common SaaS revenue models include freemium, subscription, and usage-based fees. Unlike traditional software, it is rarely possible to buy a perpetual license for a certain version of the software.

There are no specific software development practices that distinguish SaaS from other application development, although there is often a focus on frequent testing and releases.

Cloud computing

Main article: Cloud computing
Comparison of on-premise, IaaS, PaaS, and SaaS

Infrastructure as a service (IaaS) is the most basic form of cloud computing, where infrastructure resources—such as physical computers—are not owned by the user but instead leased from a cloud provider. As a result, infrastructure resources can be increased rapidly, instead of waiting weeks for computers to ship and set up. IaaS requires time and expertise to make use of the infrastructure in the form of operating systems and applications.[4] Platform as a service (PaaS) includes the operating system and middleware, but not the applications.[5][6] SaaS providers typically use PaaS or IaaS services to run their applications.[5]

Without IaaS, it would be extremely difficult to make an SaaS product scalable for a variable number of users while providing the instant and continual availability that customers expect.[7] Most end users consume only the SaaS product and do not have to worry about the technical complexity of the physical hardware and operating system.[8] Because cloud resources can be accessed without any human interactions, SaaS customers are provided with the abstraction of limitless computing resources, while economy of scale drives down the cost.[9] Another key feature of cloud computing is that software updates can be rolled out and made available to all customers nearly instantaneously.[10] In 2019, SaaS was estimated to make up the plurality, 43 percent, of the cloud computing market while IaaS and PaaS combined account for approximately 25 percent.[11]

History

In the 1960s, multitasking was invented, enabling mainframe computers to serve multiple users simultaneously. Over the next decade, timesharing became the main business model for computing, and cluster computing enabled multiple computers to work together.[9] Cloud computing emerged in the late 1990s with companies like Amazon (1994), Salesforce (1999), and Concur (1993) offering Internet-based applications on a pay-per-use basis. All of these focused on a single product to seize a high market share.[12] Beginning with Gmail in 2004, email services were some of the first SaaS products to be mass-marketed to consumers.[13] The market for SaaS grew rapidly throughout the early twenty-first century.[14][11] Initially viewed as a technological innovation, SaaS has come to be perceived more as a business model.[15] By 2023, SaaS had become the primary method that companies deliver applications.[16]

Popular consumer SaaS products include all social media websites, email services like Gmail and its associated Google Docs Editors,[17] Skype, Dropbox,[18] and entertainment products like Netflix and Spotify.[19] Enterprise SaaS products include Salesforce's customer relationship management (CRM) software, SAP Cloud Platform, and Oracle Cloud Enterprise Resource Planning.[18]

Revenue models

Some SaaS providers offer free services to consumers that are funded by means such as advertising, affiliate marketing, or selling consumer data.[20] One of the most popular models for Internet start-ups and mobile apps is freemium, where the company charges for continued use or a higher level of service. Even if the user never upgrades to the paid version, it helps the company capture a higher market share and displace customers from a rival.[21] However, the company's hosting cost increases with the number of users, regardless of whether it is successful at enticing them to use the paid version.[22] Another common model is where the free version only provides demonstration (crippleware). Online marketplaces may charge a fee on transactions to cover the SaaS provider costs.[20] It used to be more common for SaaS products to be offered for a one-time cost, but this model is declining in popularity.[20] A few[20] SaaS products have open source code, called open SaaS. This model can provide advantages such as reduced deployment cost, less vendor commitment, and more portable applications.[23]

The most common SaaS revenue models involve subscription and pay for usage.[24] For customers, the advantages include reduced upfront cost, increased flexibility, and lower overall cost compared to traditional software with perpetual software licenses.[25] In some cases, the steep one-time cost demanded by sellers of traditional software were out of the reach of smaller businesses, but pay-per-use SaaS models makes the software affordable.[3] Usage may be charged based on the number of users, transactions, amount of storage spaced used, or other metrics.[26] Many buyers prefer pay-per-usage because they believe that they are relatively light users of the software, and the seller benefits by reaching occasional users who would otherwise not buy the software.[26] However, it can cause revenue uncertainty for the seller and increases the overhead for billing.[27]

The subscription model of SaaS offers a continuing and renewable revenue stream to the provider, although vulnerable to cancellation.[3] If a significant number are cancelled, the viability of the business can be placed in jeopardy.[3] The ease of canceling a subscription and switching to a competitor leave customers with the leverage to get concessions from the seller.[28] While recurring revenues can help the business and attract investors, the need for customer service skills in convincing the customer to renew their subscription is a challenge for providers switching to subscription from other revenue models.[29]

Adoption

SaaS products are typically accessed via a web browser as a publicly available web application.[30][16] This means that customers can access the application anywhere from any device without needing to install or update it.[16][31] SaaS providers often try to minimize the difficulty of signing up for the product.[32] Many capitalize on the service-oriented structure to respond to customer feedback and evolve their product quickly to meet demands. This can enable customers to believe in the continued improvement of the product and help the SaaS provider get customers from an established traditional software company that likely can offer a deeper feature set.[33][34]

Although on-premises software is often less secure than SaaS alternatives,[35] security and privacy are among the main reasons cited by companies that do not adopt SaaS products.[36] SaaS companies have to protect their publicly available offerings from abuse, including denial-of-service attacks and hacking.[37] They often use technologies such as access control, authentication, and encryption to protect data confidentiality.[36] Nevertheless, not all companies trust SaaS providers to keep sensitive data secured.[36] The vendor is responsible for software updates, including security patches, and for protecting the customers' data.[31] SaaS systems inherently have a greater latency than software run on-premises due to the time for network packets to be delivered to the cloud facility. This can be prohibitive for some uses, such as time-sensitive industrial processes or warehousing.[38]

The rise of SaaS products is one factor leading many companies switched from budgeting for IT as a capital expenditure to an operating expenditure.[39] The process of migration to SaaS and supporting it can also be a significant cost that must be accounted for.[40][29]

Development

A SaaS architecture. All customers are running the same version of the software on the same platform.[41]

A challenge for SaaS providers is that demand is not known in advance. Their system must have enough slack to be able to handle all users without turning any away, but without paying for too many resources that will be unnecessary. If resources are static, they are guaranteed to be wasted during non-peak time.[42] Sometimes cheaper off-peak rates are offered to balance the load and reduce waste.[43] The expectation for continuous service is so high that outages in SaaS software are often reported in the news.[44]

There are not specific software development practices that differentiate SaaS from other application development.[45] SaaS products are often released early and often to take advantage of the flexibility of the SaaS delivery model.[46] Agile software development is commonly used to support this release schedule.[47] Many SaaS developers use test-driven development, or otherwise emphasize frequent software testing, because of the need to ensure availability of their service and rapid deployment.[48] Domain-driven design, in which business goals drive development, is popular because SaaS products must sell themselves to the customer by being useful.[49] SaaS developers do not know in advance which devices customers will try to access the product from—such as a desktop computer, tablet, or smartphone—and supporting a wide range of devices is often an important concern for the front-end development team.[50] Progressive web applications allow some functionality to be available even if the device is offline.[51]

SaaS applications predominantly offer integration protocols and application programming interfaces (APIs) that operate over a wide area network.[52]

Architecture

SaaS architecture varies significantly from product to product.[53] Nevertheless, most SaaS providers offer a multi-tenant architecture.[30] With this model, a single version of the application, with a single configuration (hardware, network, operating system), is used for all customers ("tenants").[54] This means that the company does not need to support multiple versions and configurations.[16] The architectural shift from each customer running their own version of the software on their own hardware affects many aspects of the application's design and security features.[54] In a multi-tenant architecture, many resources can be used by different tenants or shared between multiple tenants.[55]

Application and control planes of a SaaS product

The structure of a typical SaaS application can be separated into application and control planes.[56] SaaS products differ in how these planes are separated, which might be closely integrated or loosely coupled in an event- or message-driven model.[57] The control plane is in charge of directing the system and covers functionality such as tenant onboarding, billing, and metrics, as well as the system used by the SaaS provider to configure, manage, and operate the service.[56] Many SaaS products are offered at different levels of service for different prices, called tiering. This can also affect the architecture for both planes, although it is commonly placed in the control plane.[58] Unlike the application plane, the services in the control plane are not designed for multitenancy.[59]

An example architecture where some services are shared, while others are allocated on a per-tenant basis[60]

The application plane—which varies a great deal depending on the nature of the product—implements the core functionality of the SaaS product.[59] Key design issues include separating different tenants so they cannot view or change other tenants' data or resources.[61] Except for the simplest SaaS applications, some microservices and other resources are allocated on a per-tenant basis, rather than shared between all tenants.[62] Routing functionality is necessary to direct tenant requests to the appropriate services.[60]

Example SaaS deployment architecture that offers complete siloing on a premium tier and mixed microservice deployment to other tenants[63]

Some SaaS products do not share any resources between tenants—called siloing. Although this negates many of the efficiency benefits of SaaS, it makes it easier to migrate legacy software to SaaS[64] and is sometimes offered as a premium offering at a higher price.[65] Pooling all resources might make it possible to achieve higher efficiency,[66] but an outage affects all customers so availability must be prioritized to a greater extent.[67] Many systems use a combination of both approaches, pooling some resources and siloing others.[68] Other companies group multiple tenants into pods and share resources between them.[69]

In the United States, constitutional search warrant laws do not protect all forms of SaaS dynamically stored data. The result is that governments may be able to request data from SaaS providers without the owner's consent.[70][71]

Certain open-source licenses such as GPL-2.0 do not explicitly grant rights permitting distribution as a SaaS product in Germany.[72]

References

  1. ^ Panker, Jon; Lewis, Mark; Fahey, Evan; Vasquez, Melvin Jafet (August 2007). "How do you pronounce IT?". TechTarget. Archived from the original on 28 November 2016. Retrieved 24 May 2012.
  2. ^ Golding 2024, p. 14.
  3. ^ a b c d Dempsey & Kelliher 2018, p. 2.
  4. ^ Rosati & Lynn 2020, p. 22.
  5. ^ a b Rosati & Lynn 2020, p. 23.
  6. ^ Ibrahim et al. 2023, p. 258.
  7. ^ Dempsey & Kelliher 2018, p. 17.
  8. ^ Dempsey & Kelliher 2018, pp. 17–18.
  9. ^ a b Dempsey & Kelliher 2018, p. 19.
  10. ^ Dempsey & Kelliher 2018, p. 33.
  11. ^ a b Rosati & Lynn 2020, p. 20.
  12. ^ Dempsey & Kelliher 2018, pp. 23, 31.
  13. ^ Watt 2023, p. 8.
  14. ^ Dempsey & Kelliher 2018, pp. 24, 32.
  15. ^ Dempsey & Kelliher 2018, p. 35.
  16. ^ a b c d Watt 2023, p. 4.
  17. ^ Watt 2023, pp. 4, 8.
  18. ^ a b Clohessy et al. 2020, p. 40.
  19. ^ Watt 2023, p. 9.
  20. ^ a b c d Dempsey & Kelliher 2018, p. 48.
  21. ^ Dempsey & Kelliher 2018, pp. 61–63.
  22. ^ Dempsey & Kelliher 2018, pp. 63–64.
  23. ^ Bhandari & Gupta 2019, p. 21.
  24. ^ Dempsey & Kelliher 2018, pp. 48, 57.
  25. ^ Clohessy et al. 2020, pp. 40–41.
  26. ^ a b Dempsey & Kelliher 2018, p. 57.
  27. ^ Dempsey & Kelliher 2018, pp. 57–58.
  28. ^ Dempsey & Kelliher 2018, p. 11.
  29. ^ a b Dempsey & Kelliher 2018, p. 66.
  30. ^ a b Garbis & Chapman 2021, p. 185.
  31. ^ a b Kinnunen 2022, pp. 123–124.
  32. ^ Golding 2024, p. 18.
  33. ^ Golding 2024, p. 20.
  34. ^ Watt 2023, p. 15.
  35. ^ Watt 2023, pp. 6, 16.
  36. ^ a b c Ibrahim et al. 2023, pp. 264, 266, 268.
  37. ^ Garbis & Chapman 2021, p. 186.
  38. ^ Kinnunen 2022, pp. 137, 139.
  39. ^ Tallon et al. 2020, p. 2.
  40. ^ Kinnunen 2022, p. 124.
  41. ^ Golding 2024, p. 25.
  42. ^ Dempsey & Kelliher 2018, p. 36.
  43. ^ Dempsey & Kelliher 2018, p. 37.
  44. ^ Dempsey & Kelliher 2018, p. 39.
  45. ^ Watt 2023, p. 11.
  46. ^ Watt 2023, p. 16.
  47. ^ Younas et al. 2018, p. 142.
  48. ^ Watt 2023, pp. 11–12, 16.
  49. ^ Watt 2023, p. 12.
  50. ^ Watt 2023, pp. 13–14.
  51. ^ Watt 2023, p. 13.
  52. ^ Manvi & Shyam 2021, p. 105.
  53. ^ Golding 2024, p. 47.
  54. ^ a b Golding 2024, pp. 25–26.
  55. ^ Golding 2024, p. 26.
  56. ^ a b Golding 2024, p. 27.
  57. ^ Golding 2024, p. 44.
  58. ^ Golding 2024, p. 40.
  59. ^ a b Golding 2024, p. 28.
  60. ^ a b Golding 2024, p. 38.
  61. ^ Golding 2024, pp. 36–37.
  62. ^ Golding 2024, p. 37.
  63. ^ Golding 2024, p. 76.
  64. ^ Golding 2024, p. 55.
  65. ^ Golding 2024, pp. 55, 74–75.
  66. ^ Golding 2024, p. 69.
  67. ^ Golding 2024, p. 70.
  68. ^ Golding 2024, pp. 75–76.
  69. ^ Golding 2024, p. 78.
  70. ^ Arthur, Charles (2010-12-14). "Google's ChromeOS means losing control of the data, warns GNU founder Richard Stallman". The Guardian. UK. Archived from the original on 2014-02-28. Retrieved 2012-02-16.
  71. ^ Adhikari, Richard (2010-12-15). "Why Richard Stallman Takes No Shine to Chrome". Linux Insider. Archived from the original on 2021-01-23. Retrieved 2015-03-24.
  72. ^ Ballhausen 2014, p. 61.

Sources

  • Ballhausen, Miriam (2014). "OpenSaaS: Using Free and Open Source Software as Software-as-a-Service". International Free and Open Source Software Law Review. 6: 61–68. ISSN 2666-8106.
  • Bhandari, Guru Prasad; Gupta, Ratneshwer (2019). "An Overview of Cloud and Edge Computing Architecture and Its Current Issues and Challenges". Advancing Consumer-Centric Fog Computing Architectures. IGI Global. pp. 1–37. ISBN 978-1-5225-7149-0.
  • Dempsey, David; Kelliher, Felicity (2018). Industry Trends in Cloud Computing: Alternative Business-to-Business Revenue Models. Springer International Publishing. ISBN 978-3-319-87693-1.
  • Garbis, Jason; Chapman, Jerry W. (2021). Zero Trust Security: An Enterprise Guide. Apress. ISBN 978-1-4842-6703-5.
  • Golding, Tod (2024). Building Multi-Tenant SaaS Architectures. O'Reilly Media. ISBN 978-1-0981-4061-8.
  • Ibrahim, Ahmed Mamdouh Abdelfatah; Abdullah, Norris Syed; Bahari, Mahadi (2023). Software as a Service Challenges: A Systematic Literature Review. Springer International Publishing. pp. 257–272. ISBN 978-3-031-18344-7.
  • Kinnunen, Juha (2022). ERP as Software-as-a-Service: Factors Depicting Large Enterprises Cloud Adoption. Springer International Publishing. pp. 123–142. ISBN 978-3-030-99191-3.
  • Lynn, Theo; Mooney, John G.; Rosati, Pierangelo; Fox, Grace (2020). Measuring the Business Value of Cloud Computing. Springer Nature. ISBN 978-3-030-43198-3.
    • Tallon, Paul P.; Mooney, John G.; Duddek, Marvin (2020). "Measuring the Business Value of IT". Measuring the Business Value of Cloud Computing. Springer International Publishing. pp. 1–17. ISBN 978-3-030-43198-3.
    • Rosati, Pierangelo; Lynn, Theo (2020). "Measuring the Business Value of Infrastructure Migration to the Cloud". Measuring the Business Value of Cloud Computing. Springer International Publishing. pp. 19–37. ISBN 978-3-030-43198-3.
    • Clohessy, Trevor; Acton, Thomas; Morgan, Lorraine (2020). "The SaaS Payoff: Measuring the Business Value of Provisioning Software-as-a-Service Technologies". Measuring the Business Value of Cloud Computing. Springer International Publishing. pp. 39–55. ISBN 978-3-030-43198-3.
  • Manvi, Sunilkumar; Shyam, Gopal (2021). Cloud Computing: Concepts and Technologies. CRC Press. p. 105. ISBN 9781000337952.
  • Watt, Andy (2023). Building Modern SaaS Applications with C# And . NET: Build, Deploy, and Maintain Professional SaaS Applications. Packt. ISBN 978-1-80461-087-9.
  • Younas, Muhammad; Jawawi, Dayang N. A.; Ghani, Imran; Fries, Terrence; Kazmi, Rafaqut (2018). "Agile development in the cloud computing environment: A systematic review". Information and Software Technology. 103: 142–158. doi:10.1016/j.infsof.2018.06.014. ISSN 0950-5849.

Further reading

  • Fox, Armando; Patterson, David A. (2020). Engineering Software As a Service: An Agile Approach Using Cloud Computing. Pogo Press. ISBN 978-1-7352338-0-2.
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