SaaS, often also referred to as cloud software or hosted software, is short for Software as a Service but what does Software as a Service actually mean?

The best way to understand SaaS is with an example – you decide you want a nice Italian meal for dinner. When you are hungry, simplistically, you have two choices: you can cook it yourself or you can eat out. So lets look at some of the things cooking it yourself involves:

  • You buy a hob/cooker/oven or other method of cooking your food
  • You buy the ingredients
  • You prepare the food
  • You cook the food
  • You lay your table and serve the food on plates etc
  • You eat the food
  • You clear up and do the dishes

On the other hand, when eating out:

  • Your order your meal
  • You eat your meal

When you cook your own you have a lot more control but it takes longer. Sometimes it will be cheaper but not always – in a lot of cases it depends on the quality you require. If you just want a quick simple bolognese then it will be cheaper to cook it yourself, but if you want a high quality, premium dining experience then you should be prepared to pay that bit more for it. This is akin to what happens when you host your own software. You have to:

  • Choose the software
  • Buy servers
  • Install an operating system
  • Install backup/security software
  • Install and configure the application
  • Host the servers
  • Maintain and patch the software
  • Use the application
  • Every x years, replace the servers

On the other hand with Software as a Service, you:

  • Choose the software
  • Configure the application
  • Use the application

For this reason, eating out is akin to Software as a Service – I need HR software so I subscribe to an HR software provider and I use their solution.

My contract with the HR software company is that they provide me with a service which, in this case, is HR software. They need to worry about all the other stuff like servers, operating systems, datacentres, security, backup and so on – ultimately, all I want is my Italian meal / HR software!

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