The benefits and advantages of SaaS are best understood in comparison to traditional software—software installed and managed on on-premises infrastructure:
SaaS provides faster—even instant—adoption and time-to-benefit. Customers can purchase and start using SaaS applications immediately, sometimes in minutes, for a minimal upfront cost (essentially the first month’s subscription cost). Compare to traditional software, which might require purchasing and provisioning servers, installing software on every user device, and budgeting for and purchasing a full license for every user.
SaaS provides access to new features and versions as soon as they’re available. SaaS providers often upgrade features and add functionality several times a week, without customers even noticing. They can even upgrade the interface and user experience without disrupting the customers’ work. Compare to traditional on-premises software, for which periodic upgrades are often so costly and disruptive that customers might wait months for the functionality in a new version (if they don’t choose to skip some upgrades altogether).
SaaS enables cost-effective, on-demand scalability. Customers can scale SaaS applications up and down as needed, by simply upgrading or downgrading tiers or purchasing more capacity. Compare to traditional software, which requires customers to purchase more capacity in anticipation of usage spikes—capacity that sits idle and wasted until needed.
SaaS offers predictable costs and dramatically lower overhead. With SaaS there’s no need to budget for infrastructure on which to run the software, for periodic software upgrades and the infrastructure to support them, and—most important—for in-house IT staff to install, upgrade and maintain the software. Almost all of the expense goes directly to the software use.
Potential challenges
Despite its advantages, SaaS does introduce potential risks and challenges that customers, particularly enterprise customers, need to be aware of.
Because SaaS apps are so easy for users to start using, they can proliferate in an organization without the IT staff’s knowledge. This phenomenon, called ‘shadow IT,’ can pose security risks. At a basic level, if IT staffers don’t know what software users are using, they can’t ensure that the software is secure.
Consequently, shadow IT can also exacerbate existing bad security practices—such as using the same password for even more applications—and increase the organization’s overall vulnerability to attackers.
Another potential risk is vendor lock-in, or difficulty moving to another SaaS vendor when the current vendor’s application no longer meets the customer’s performance, functionality or business requirements. For example, if a SaaS application relies on proprietary business logic or a proprietary technology stack, it might be difficult or impossible to move from that SaaS application to another without making significant tradeoffs.
