What Is SaaS in Cloud Computing? How It Works, Benefits and Examples
Whenever you use webmail, attend a video conference, handle a project in a browser or edit a shared document on-line, you are using a software as a service application. The application runs on a provider’s network; you access it over the web and do not need to host it locally on your computer.
SaaS. Software as a Service (SaaS) is one of several types of service model for cloud computing. In this type the service provider owns the application and the application stack itself. Customers use a web browser, a mobile application or an application programming interface (API) to use the service; customers typically maintains their users, data and parameters.
SaaS can provide easier access and more maintenance for software, but it bring about alse changes to an organization in different dimensions including security, data, cost and vendor lock-in. This article tells readers what SaaS means in cloud computing, its models and typical usages, the “pros” and “cons” of SaaS, SaaS in comparison to PaaS and IaaS.
Table of Contents
What Is SaaS in Cloud Computing?
Software as a Service ( SaaS ) is a method of delivering application services where the application is hosted and managed by the provider and accessed by the customer or consumer over a network. Many SaaS applications are simply web apps running in browsers, but some may also be delivered through mobile apps or Application Programming Interfaces (APIs).
The NIST defines SaaS as a cloud computing service model that provides the customer with access to the provider‘s applications utilizing the cloud infrastructure. The customer typically has no control over the underlying cloud infrastructure including network, servers, operating systems or storage. The client may have reduced control over application configuration settings. NIST‘s cloud computing definition
A SaaS subscription can be billed on a monthly or annual basis or per user, model or usage. The configuration and specific details depends on who the vendor is and what the product is. The primary concept is that the software provider is running the service and the customer is configuring and using the software.
SaaS is often seen just as any software that is running on the browser. There are many applications that run on the browser, but these are not SaaS. The service has to meet the cloud delivery model, which comprises network access and provider operation.
How SaaS Works in Cloud Computing
There are multiple layers involved in a SaaS application. The service provider is responsible for the application itself, the databases and the cloud infrastructure which supports it. The customers connect with the application using private or public internet network.
A typical interaction works like this:
- A user goes onto a website or application and logs in.
- The service checks the user‘s identity and privileges.
- The application handles the user request.
- The service retrieves or sets the relevant data.
- This result is sent to the user‘s browser or app.
The provider is to run the service, monitor it, maintain the infrastructure and release software updates. In the case of a product, that could mean that the provider is also in charge of backing up the data, availability, data storage and support.
Customers continue to have a role. Usually providing and managing users, access, data, device and application preferences. For the organization this can include how the service is configured and integrated into policies.
A simple SaaS example
Picture a small company subscribing to an online project management system. The employees would login on web browser, then creating new project, updating tasks, etc. The service provider runs the application and keeping all projects data. The company will not manage the software on their server nor install the new updates on the own server.
The company still has to decide who is able to access the workspace, delete accounts for when people leave, select appropriate sharing options and also how its data is stored.
For a more detailed step-by-step explanation, see how SaaS works in cloud computing.
Key Characteristics of SaaS
SaaS products vary, but many share these characteristics:
- Network access: via internet or other network.
- Software Managed by Provider: The provider hosts the software as well as the associated infrastructure.
- Straightforward updates: Provider rolls out and installs the software updates.
- Subscription or usage based pricing: Customers are charged by a plan, number of users, usage/measure.
- Account-based access: Users logon and are given authorisation determined by their role or account settings.
- Shared or pooled resources: Providers may choose to employ shared infrastructure but have customer accounts and data logically separate.
These characteristics of SaaS can also account for why SaaS is often easier to try out than software that sits on an organization’s own premises. These same aspect can also require customers to understand provider’s terms of service, security controls, and data handling.
SaaS Architecture in Cloud Computing
SaaS architecture is about how the service provider architect the application for hosting such that it can be delivered to customers as a service. A simple SaaS system may include:
- A graphics user interface, such as a website or mobile application
- An authentication and access layer for sign-in, authentication and permissions
- Application services, which provide all of the functions of the product.
- Customer Information Files Storage
- Integration interfaces, e.g. APIs for connectiong to other systems
- Monitoring and operations tools for reliability, updates and troubleshooting
Many SaaS providers use multi-tenant architecture. In this model, one service supports multiple customers, often called tenants. Customers may share some application or infrastructure components while their accounts and data are logically separated. Microsoft describes SaaS solutions as often using multi-tenant architecture, while emphasizing that isolation remains critical. Microsoft’s SaaS workload overview
Multi-tenancy allows a provider to run and upgrade a particular service for numerous customers. It does not equate to customers having visibility into each other‘s data. The provider has to implement and sustain controls to maintain tenant boundaries.
Some providers provide a more private environment with additional or enhanced isolation for customers. How much isolation can add to the cost as well as how it is configured and operated. Different architectures suit different services, customers and providers’ designs.
SaaS Examples in Cloud Computing
SaaS appears in many everyday business and consumer applications. Common categories include:
- Email and collaboration: email calendaring document editing file sharing and team communication
- Customer relationships: sales pipelines, customer profiles and track records
- Manage projects and work of activities: objects, flows, time tables and workgroups
- Video conferencing: online meetings, webinars and virtual events.
- Accounting & finance: invoicing, bookkeeping and expense management
- Design and publishing: image editing, layout and content creation via internet or web browser
- C2: E-commerce: display management, product orders and administration.
- People: hiring, employee information, pay and Benefits administration
Some available examples of cloud-based applications are Microsoft 365, Google Workspace, Salesforce, Slack, Zoom, and Shopify. Features and the service delivery for each varies based on the product and selected subscription plan.
SaaS products can also connect with other systems. For example, a business might connect its online store to accounting software so that order information can support bookkeeping. Before enabling an integration, check what data it can access and which permissions it receives.
For a deeper list and explanation, see SaaS examples in cloud computing.
Advantages of SaaS
Faster access to software
Customer takes up the SaaS service by defining them as supplier and logging in to the service (otherwise an account is created). Users are not required to buy and run the server to run the application.
Provider-managed maintenance
The provider will perform much of the application maintenance, like software upgrades and the running of the infrastructure. This can lessen the workload on a customer‘s IT staff.
Access across supported devices
Accessibility of the service: Users can sometimes reach the service from different devices (browser or app) and it can support remote teams, providing those teams have the connection and access controls.
Easier collaboration
SaaS products often support multi-tenancy as several users can access a common environment. Staff might have access to change the same records, documents or working spaces.
Flexible capacity
The cloud provider can dynamically provision resources as customer demand changes. The customer‘s experience will likely depend on the provider‘s product design and plan limits, but SaaS can bypass some of the capacity planning associated with customer-managed infrastructure.
Predictable starting costs
A subscription can ease the initial cost estimates more than purchasing and setting up the whole software environment. However the long-term costs will still be influenced by user numbers, plan options, and terms of usage/renewals.
Disadvantages and Risks of SaaS
Dependence on the provider
Customers rely on the provider to provide accessible, secure and maintained service. A disruption or large change in service can impact on business.
Examine the level of service commitments that the provider has to offer, how they provide support, history of service and communication process with regards to incident reports.
Ongoing subscription costs
The entry point is set low so that this can increase as additional users, storage or premium features are included. Look at the total probable time-span costing including attachments, renewal prices and the cost of services required to install or run the product.
Less control over the underlying system
Usually customers neither have the ability to select the operating system, servers or application release schedule of the SaaS provider, nor they are able to control the way a service is built or configured.
Data portability and vendor lock-in
It can be a hassle to move data to another service. Export choices often aren’t robust, or a new product might structure information differently. Be sure you can export your records in a useful format and that integrations aren’t built on proprietary tools before you sign up to a service.
Connectivity and access issues
SaaS applications often depend on the network. Not all vendors have offline capabilities, so always check if the application can be used to keep the business running in case you lose a connection.
Shared responsibility for security
The provider operates much of the service, but customers remain responsible for some important controls. For example, an organization may need to manage user accounts, choose secure settings and protect its devices. Microsoft’s shared responsibility guidance says that customers retain responsibility for their data, identities and configurations across cloud service models, including SaaS. Microsoft’s shared responsibility model
For a balanced comparison, see the advantages and disadvantages of SaaS.
SaaS vs. PaaS vs. IaaS
SaaS, PaaS and IaaS are three cloud service models. They differ mainly in what the provider delivers and how much the customer manages.
| Model | What the provider supplies | What the customer mainly does |
|---|---|---|
| SaaS | A ready-to-use application and the infrastructure that runs it | Uses the application and manages its users, data and settings |
| PaaS | A managed platform for building and deploying applications | Develops and manages applications on the platform |
| IaaS | Computing resources such as virtual machines, storage and networks | Manages operating systems, applications and many configurations |
SaaS usually involves the least infrastructure management by the customer. PaaS provides a platform for deploying customer-built applications. IaaS provides more control over the computing environment, but the customer takes on more management work.
These models are not always mutually exclusive inside a company. A business may use SaaS applications for everyday work, PaaS to build an internal application and IaaS for a specialized system.
The right choice depends on whether you want to use an existing application, build on a managed platform or control more of the underlying environment. NIST’s cloud definition describes SaaS, PaaS and IaaS as distinct cloud service models.
See the full comparison in SaaS vs. PaaS vs. IaaS.
SaaS Security Best Practices
SaaS security is the responsibility of the provider and the customer. The provider is responsible for protecting and running the service and the customer needs to look after that part of the service which they are responsible for.
Use strong sign-in protections
Utilize multi-factor authentication where available, particularly for administrators and those accounts that are allowed to access sensitive information. Favor an entity‘s identity provider and single sign-on where those options are available and configured.
Review users and permissions
Provide users with only the permissions they require. Regularly audit administrator accounts, shared accounts, third-party partners and inactive users. Terminate access when employees or contractors no longer require it.
Configure sharing deliberately
Determine if documents, folders or workspaces are private, organization only or ‘anyone’. Adjust default sharing levels appropriately for the organization‘s operation, re-evaluate the need for externally shared content.
Protect endpoints
Access via browsers and mobile applications, however, means device security still matters. Maintain supported OS and browsers, enforce required device protections based upon the data, and have a procedure for lost or stolen devices.
Understand data handling
Before signing up, see what data the service will store, how it will be protected, where it may be processed, how long it will be stored for, and what mechanisms there are for deletion and export. Check for your provider‘s security documentation and the contract terms.
Monitor activity and integrations
Review the following using the audit logs and alerts available important account activity. Limit third-party integrations to those the organization needs, and check the data and permissions each integration can access.
Plan for outages and recovery
Understand the provider’s backup and recovery approach, but do not assume it replaces your own continuity requirements. Decide how users will handle a service outage and which records need independent backup or export.
For additional controls, see SaaS security best practices.
How to Choose a SaaS Product
Before subscribing, define what is the issue the software should solve. After that compare products to practical needs:
- Features: How well does it support your current processes?
- Usability: The people who need it are able to learn and use it.
- Security: Is there an appropriate level of authentication, permissions and auditing?
- Integrations: Does it work with the existing systems upon which you rely?
- Bring it all back! Data export: Is it possible to export your data in a usable format?
- Availability and support: Are the commitments to the service and the support options correct?
- Total cost: How much will the product cost as users and usage increases?
- Compliance and access needs: is the service is appropriate for your organization data and access needs?
- Access plan: What would it be to migrate the home?
A pilot with a small group can expose setup problems, are workflow bottlenecks, and training needs prior to wider deployment.
Frequently Asked Questions
What does SaaS mean in cloud computing?
SaaS indicates Software as a Service. A provider runs an application on cloud infrastructure and provides access over network means which is called as SaaS. This usually is enabled through browser or application.
Is SaaS the same as cloud computing?
No. SaaS is the first of three types of service model. PaaS and IaaS are the other two. Cloud computing provides the framework for the delivery of computing services.
Do I need to install SaaS software?
The majority of SaaS applications are Web-based, with some having dedicated desktop or mobile apps. Regardless of the end user app, the provider manages the delivery of the service and the related infrastructure.
Who manages SaaS security?
People are responsible for different things. The provider controls the service and runs it, customers are responsible for most of their data, identities, accesses and preferences. It all depends on the product, so look at the provider‘s documentation.
Is SaaS suitable for small businesses?
It can be. SaaS might allows a small business use features without the need to run the underlying software infrastructure. The business should still compare cost, controls security export of data and support.
What is multi-tenant SaaS?
Multi-tenant SaaS deploys a service architecture that accommodates more than one customers’ organization, a range of shared components is generally used. The service has a responsibility to ensure each customer‘s accounts and data are suitably partitioned.
Final Thoughts
SaaS in cloud computing enables the customer to use a vendor-operated software application over a public network. The software application and most of the infrastructure are owned and managed by a provider.
The model enables products to be more readily available, more easily updated and more scalable than traditional software. With the model comes additional costs of ongoing subscription, reliance upon the provider and shared security obligations. Before selecting a product, assess the controls, support, integrations, data portability and total cost.
Is SaaS the best option for… Certain things are most effective in the cloud or… The right fit for SaaS is… real workflow and the organization understands how it will manage access and data. Compare SaaS with PaaS and IaaS based on how much control and operational responsibility your organization needs.
