The emergence of SaaS solutions

SaaS: An Overview of Software Landscape

SaaS, or Software-as-a-Service, is essentially pretty self-explanatory in how it is titled. You are basically granted access to specific software (or a set of software programs) through a network connection, allowing you to complete tasks in a lightweight and efficient manner.

In standard software packages, individuals and companies needed to fully download, integrate, and fully manage software off of their own data centers. This meant that data integrity, security management, and other updates were at the onus of the owner of the software. Back then, you also needed to ensure that the entire infrastructure, from servers to network capabilities, was fully developed to match what you needed out of the software itself. This meant carrying all the risks that a botched upgrade or a faulty security patch can bring to your company, costing you time, money, and effort in what was supposed to be a boon for your company.

SaaS gets rid of all that by essentially “outsourcing” all of the technicalities, from security to information management, to the software developers themselves. You won’t need to bother yourself with your hosting and server capabilities as you’ll just need to ensure a strong enough network connection to access the software at any time regularly. With internet speeds only getting faster, this barrier itself even proves to be a non-issue, lending to SaaS's continued proliferation and growth in the market.

The types of SaaS can be as varied as one company might need them to be. Some of the most common types are office applications, such as word processors and data processing systems. But SaaS can be much more flexible towards the specific needs of any one company, lending its tech capacities towards field team management, collaborative tools, and even multimedia hosting.

Differences in IaaS, PaaS, and SaaS

As with any technological development, there are also many different layers to the Software-as-a-Service structure that might not be inherently visible to the common user. While we’ve discussed SaaS at length, including what makes it different from the standard software packages you might’ve seen at the internet’s starting stages in the 1990s, there are also tech advances in the development of PaaS, or Platform-as-a-Service, as well as IaaS, or Infrastructure-as-a-Service.

PaaS is a type of framework most useful for application developers that want faster entry into the market by utilizing all the back-end structures, such as the Operating System and Server access, while retaining management of their own program and the data within it. Common occurrences of PaaS are through the mobile app industry, where developers can choose to develop their applications through either the iOS or Android store application packages so that they can utilize pre-built systems to better handle all the technical load that software programs bring.

IaaS, on the other hand, is a much more back-end service offered to individuals and businesses who are looking to not only manage their own application and data, but also manage their operating system and runtime contingencies. This means that a larger portion of the software will be controlled by the owner of the program, but things such as server management and virtualization remain on the IaaS provider. Key examples of this in the relatively small market that IaaS inhabits are Amazon Web Services and Microsoft Azure. Both these IaaS products are incredibly key to some of the biggest digital products you see online. For example, Netflix uses AWS for nearly all its storage and computing needs, which comes out much more efficient and cost-saving than having to do it on their own.

The History of SaaS Solutions

Learning about what SaaS is and the other iterations it has brought up in Paas and IaaS, it can be almost difficult to imagine what computing was like before SaaS came into the picture. Indeed, most of us who are digital natives in the 1990s to the early 2000s might have seen some pre-SaaS systems out, but the majority of the software we now see in the market are different versions of a SaaS model.

Whenever you’re using software that prompts you for a security update or requires internet access to use, you’re likely using a Software-as-a-Service product. While there remains quite a number of open-source and legacy products that are still on the older “software-as-a-product” framework, the usefulness of just booting up a software program and having it manage and maintain everyone on the back end in exchange for a one-time purchase or a subscription fee is just all too meaningful. But it’s important to remember that the internet wasn’t always like this.

Proto-SaaS and Computing Then

Some people can trace back the development of computing and internet technologies as far back as the 1960s, but these technologies were cost-prohibitive to maintain at the time for individuals to develop on their own. A time-sharing system, known as CTSS, was developed at MIT to help lower the cost of maintaining and operating a useful mainframe for computing.

It was over the next few decades that advancements such as these started to become less and less expensive and easier to maintain. This also signaled the rise in private ownership of computers, where previously it was left to the larger businesses and firms that needed its computing powers to better manage data.

Personal ownership of computers at this stage came loaded with “on-premise” software that was bundled in with the purchased package of the computer. But with a much more early stage of the internet, the costs of maintaining and updating software were too high to be done regularly. Remember, back then most of these updates came in the form of physical media. This meant that updates to your favorite word processing application will need to come from a CD or floppy disk that can provide the required updates when necessary.

Online Commerce Driving Growth

Many look to the 1990s as a key starting point when the internet began to really take shape. Those active computer users during this time will note that this was the big dot.com hype that eventually led to one of the biggest bubble bursts in the market, all fueled by massive enthusiasm and unregulated use of internet capabilities.

But it wasn’t all doom and gloom for the internet, as other developments grew alongside the massive proliferation of private internet use. Online e-commerce started to become a more regular occurrence, with secure credit card transactions and better-encrypted transmission of data on the internet, giving people more confidence to shop online without losing their data.

And with the large influx of online shoppers came the necessity for marketplaces to provide the goods. Amazon’s early iterations can be found around this timeline, as well as eBay’s earlier version as “AuctionWeb”. Naturally, with all these data now being transmitted across the network, online cloud services began filling the void to allow internet service providers to leverage outside computing technologies so that they can better focus on the core of their business. This also allowed them greater flexibility in accessing data from remote areas not necessarily directly connected to their servers. It was here that the first shapes of SaaS began to take form.

The First SaaS, its Update, and the Market Now

One of the first technical prototypes to SaaS came in the form of Application Service Providers, or ASPs, which had a very similar overarching idea to SaaS but needed a more hands-on approach as the service vendor would need to manually create each environment for their clients to use.

It was in 1999 that Salesforce pioneered the SaaS industry with the wide launch of its CRM (Customer Relationship Management) platform. It was in this iteration that proved SaaS frameworks could work, at least for the current clientele that was interested in it. At this stage, SaaS definitely made waves but in a smaller audience of businesses (largely startup and small scale). But as the technology developed over time, larger businesses started to see the benefits of essentially outsourcing all the work it takes to run the software while maintaining all the benefits of its use.

With internet speeds going up and more flexible payment options available for use (revenue-sharing, package corporate plans, and more), it’s no surprise that companies began ditching their end-to-end software models for the more flexible and efficient SaaS models.

Today, SaaS enterprise-level softwares are ubiquitous in most corporations, with the many growing market also lending to the cheapening prices of these products in general. The cost savings have become a key aspect of why SaaS has become so widely used in the market, and even some SaaS products have found themselves leveraging other SaaS (or IaaS/PaaS) to further develop their growth.

Where SaaS Goes From Here

With SaaS being practically the standard in software management today, titans in the industry like Microsoft, SAP, Oracle, and IBM are looking to see what the next step in its development would look like. While the technical specifics might not be ironed-out, there are likely three major opportunities for improvement that SaaS can leverage.

First, as SaaS continues its growth, IT teams and general technology executives will need to practice more flexibility and expertise in aspects that might not be related to their core knowledge. They need to begin being better overall organizational and business partners as SaaS becomes more ingrained within almost every business aspect. Gone are the days when IT just manages network connections and data management; these days IT will likely have a hand in your human resources management, financial audits, and even organizational structures.

Secondly, automation through machine learning and AI will likely be a strong focus of SaaS vendors to continue to develop. Companies are looking for increasingly smarter ways to better understand their businesses, both from an external perspective to an internal perspective. This means that SaaS needs to be smarter with how it anayzes data and how it arrives at specific analysis points to inform key business decision makers. If done well, the next phase of SaaS can completely revolutionize the market of decision-making and company agility.

Lastly, SaaS will likely explore more flexibility in its integration aspect as well. APIs, or Application Programming Interfaces, are expected to grow alongside these techoogies and enable softares to have more avenues for growth and integration. This means that the capabilities of SaaS will likely continue to grow as more and more of these applications leverage the market’s overall advancement as well.