Software as a Service: The Game-Changer for Small IT-Departments | by Niklas Lang | Aug, 2022
An Introduction to Software as a Service compared to On-Premise Solutions
Software as a Service (SaaS) is a category in the field of cloud computing in which software can be used without it being installed on the local computer. The end-user accesses the program via a website and thus uses only the functions of the software. The provision of the hardware and IT infrastructure, on the other hand, is handled by the provider.
Software as a Service uses a cloud environment to provide services to customers. Depending on the application, the software provider uses its own servers or a cloud service provider to host the applications, store data and update the system.
The end customer, on the other hand, only needs an Internet connection and uses the application via a web browser. In most cases, he concludes a subscription with the provider that entitles him to use the software for a limited period of time.
The provider is then also faced with the task of adapting the application so that it functions as smoothly as possible for the end customer. In the case of intensive use, new cloud resources must be booked accordingly or the on-premise servers must be increased.
Software as a Service only became more popular with the spread of cloud computing. Before that, it was normal for companies to purchase the software they used once and then install and maintain it on their local devices.
For companies, the following points are crucial when they have to decide between software in the cloud or locally:
Setup and Maintenance
For the on-premise software, the internal IT department needs to take care of the installation, maintenance, protection, and finally the scaling of the hardware in case more users start to use it. These are several tasks that may not be handled by a small team which makes it especially hard for mid-sized companies.
For Software as a Service, you just need to register for the application and choose a subscription type. In most cases, there is even a chance to try it for free before signing the subscription. So, the setup and maintenance can even be done by a non-IT person.
Cost Structure
In most scenarios, SaaS is the more cost-effective alternative compared to an on-premise solution. The costs are very transparent in that you only pay the fixed subscription fees that may vary with additional users. For on-premise, there is usually a very high one-time investment in the software with recurring, lower costs for maintenance. So in the long-term, on-premise can become the cheaper option but only if recurring costs stay low.
Need for IT Staff
The main advantage of SaaS solutions is the low need for trained IT staff since most software use a no-code frontend which makes it very easy to handle even for staff without technological background. That way, the person only needs internet access and an open browser to use the application. For on-premise, IT staff needs to be available at any time to react in the case of disruptions or errors. This means they cannot be used for other projects and the whole department needs to grow.
Integration of other Applications
For most SaaS applications, there is a stack of other software that can be integrated easily. In some cases, the subscription needs to be changed to a more advanced one, but then the integration is very fast. However, if the desired software is not in the given stack, it may take a long time or might even be impossible to get the manufacturer to add it.
In the on-premise case, the integration of new applications is usually very complex and may take a lot of time and resources. However, there is the possibility to add new software as long as it is technically compatible and one is not dependent on the stack of the provider.
Scalability
Due to the transparent cost structures of Software as a Service, it also has perfect scalability. New users do only result in additional subscriptions meaning higher costs. But there is no need for improving hardware, etc. since the provider takes care of that.
In the on-premise case, scalability is much harder see since there are usually fixed costs. When setting up, high costs are occurring that may not really change for the first few users. However, there may be a threshold of users, where another hardware improvement needs to take place to sustain the performance. Then again, the investment is rather high since the hardware is expensive.
Due to the many advantages of Software as a Service and its popularity with customers, almost all new applications are now offered as SaaS. In addition, software products that were offered on-premise for years are also being converted. The best-known example of this is Microsoft Office.
The following software products are SaaS:
- Salesforce
- Microsoft 365
- Netflix
- Zoom
- Slack
- Trello
As discussed earlier, the use of Software as a Service is beneficial because it is much more cost-effective for businesses. In detail, there are also the following advantages:
- Low cost and effort for installation and maintenance
- Fast deployment without loss of time for installation
- Scalability
- Automated and trouble-free updates
- Easy extensibility with other services
- Payment per user and therefore maximum cost transparency
The use of external services naturally also gives rise to risks when Software as a Service is used. For companies, in particular, the advantages and disadvantages compared with an on-premise solution must be weighed up carefully.
Before using the Software as a Service, the data protection situation must always be examined in detail. Depending on the application of the software, sensitive data can sometimes leave the company. It must therefore be ensured that the information is also stored securely and that data security is guaranteed. This can sometimes be a time-consuming and expensive process.
In the operation of the software, risks arise in the accessibility and performance of the service. The SaaS provider is responsible for ensuring that the software is always available, has few outages, and that pending updates are made promptly. If this is not the case, the purchasing company may experience expensive downtime that is out of their control.
For this reason, the service level agreements should be carefully checked and possibly renegotiated before the contract is concluded. These stipulate how the SaaS provider is to behave in the event of a failure and how quickly the service must be operational again. If the provider is unable to meet this service level, the customer may be entitled to compensation, depending on the agreement.
With both on-premise solutions and SaaS, a subsequent change of provider is only possible with a great deal of effort. The accumulated data volumes have to be migrated to a new system and the employees may have to be retrained. Therefore, the selection of the software and the provider should always be well thought out.
In addition to Software as a Service, other services have also developed in the area of “X as a Service”. Generally, these are offerings in which the provider concentrates on administration and the customer no longer has to take on few or even any tasks.
The opposite of this is so-called on-site or on-premise software. Here, the responsibility for the operation, the data, the servers, and much more lies with the organization that ultimately uses the system. Although this architecture involves a lot of work and responsibility, some companies still rely on this approach because it ensures that sensitive data does not leave the company.
With Infrastructure as a Service (IaaS), the management of servers, data storage, and networks is handled by an external provider in the cloud. The customer, on the other hand, accesses and uses the leased infrastructure via an interface. However, the user retains responsibility for the rest of the system, for example, the applications, data, or operating system. This also means that the user bears full responsibility for possible failures or repairs.
The next stage is Platform as a Service (PaaS), where the software platform is provided in the provider’s cloud in addition to the infrastructure. This option is used, for example, when applications are to be programmed. It is comparable to a virtual machine, which is provided by the provider. The user still has control over the installed programs, but all other responsibility lies with the provider.
The final stage in this structure is Software as a Service (SaaS), in which all previous stages and the software itself are operated by the provider in the cloud.
In their daily work, many data scientists already make use of Software as a Service products. This is partly because some programs can only be used as SaaS and partly because it also makes more sense depending on the use case.
One such SaaS product that many Data Scientists use is Google Analytics. The web interface offers the possibility to evaluate web tracking data directly, display it, and draw possible conclusions from it. Google Analytics can also be used as a SaaS tool. Even if you wanted to save the data yourself, this would not be so easy, because a data export from Google Analytics is actually not possible. Only existing reports can be downloaded as PDFs or the underlying data can be exported as CSV. In this case, it is therefore not even possible to do without a Software as a Service product.
However, there are also enough examples where it actually makes sense to switch from an in-house solution to a SaaS solution. In the area of machine learning, for example, the area of machine learning as a service has emerged, in which the underlying architecture is purchased.
Many current machine learning models, such as Transformers, require graph maps to be trained quickly. On conventional CPUs, the training usually takes many times longer. However, building an infrastructure with graphics cards is not only more complex but also expensive. Therefore, it can be worthwhile to resort to external resources whose environments have been specifically designed for machine learning and data science and thus be able to concentrate 100% on the project.
- Software as a Service (SaaS) is a category in the field of cloud computing in which software can be used without it being installed on the local computer.
- For the user, this results in, among other things, the advantages of low costs, as well as lower expenses for installation and maintenance.
- In addition to SaaS, there is also Infrastructure as a Service (IaaS) and Platform as a Service (PaaS) as alternative options for using the cloud.
An Introduction to Software as a Service compared to On-Premise Solutions
Software as a Service (SaaS) is a category in the field of cloud computing in which software can be used without it being installed on the local computer. The end-user accesses the program via a website and thus uses only the functions of the software. The provision of the hardware and IT infrastructure, on the other hand, is handled by the provider.
Software as a Service uses a cloud environment to provide services to customers. Depending on the application, the software provider uses its own servers or a cloud service provider to host the applications, store data and update the system.
The end customer, on the other hand, only needs an Internet connection and uses the application via a web browser. In most cases, he concludes a subscription with the provider that entitles him to use the software for a limited period of time.
The provider is then also faced with the task of adapting the application so that it functions as smoothly as possible for the end customer. In the case of intensive use, new cloud resources must be booked accordingly or the on-premise servers must be increased.
Software as a Service only became more popular with the spread of cloud computing. Before that, it was normal for companies to purchase the software they used once and then install and maintain it on their local devices.
For companies, the following points are crucial when they have to decide between software in the cloud or locally:
Setup and Maintenance
For the on-premise software, the internal IT department needs to take care of the installation, maintenance, protection, and finally the scaling of the hardware in case more users start to use it. These are several tasks that may not be handled by a small team which makes it especially hard for mid-sized companies.
For Software as a Service, you just need to register for the application and choose a subscription type. In most cases, there is even a chance to try it for free before signing the subscription. So, the setup and maintenance can even be done by a non-IT person.
Cost Structure
In most scenarios, SaaS is the more cost-effective alternative compared to an on-premise solution. The costs are very transparent in that you only pay the fixed subscription fees that may vary with additional users. For on-premise, there is usually a very high one-time investment in the software with recurring, lower costs for maintenance. So in the long-term, on-premise can become the cheaper option but only if recurring costs stay low.
Need for IT Staff
The main advantage of SaaS solutions is the low need for trained IT staff since most software use a no-code frontend which makes it very easy to handle even for staff without technological background. That way, the person only needs internet access and an open browser to use the application. For on-premise, IT staff needs to be available at any time to react in the case of disruptions or errors. This means they cannot be used for other projects and the whole department needs to grow.
Integration of other Applications
For most SaaS applications, there is a stack of other software that can be integrated easily. In some cases, the subscription needs to be changed to a more advanced one, but then the integration is very fast. However, if the desired software is not in the given stack, it may take a long time or might even be impossible to get the manufacturer to add it.
In the on-premise case, the integration of new applications is usually very complex and may take a lot of time and resources. However, there is the possibility to add new software as long as it is technically compatible and one is not dependent on the stack of the provider.
Scalability
Due to the transparent cost structures of Software as a Service, it also has perfect scalability. New users do only result in additional subscriptions meaning higher costs. But there is no need for improving hardware, etc. since the provider takes care of that.
In the on-premise case, scalability is much harder see since there are usually fixed costs. When setting up, high costs are occurring that may not really change for the first few users. However, there may be a threshold of users, where another hardware improvement needs to take place to sustain the performance. Then again, the investment is rather high since the hardware is expensive.
Due to the many advantages of Software as a Service and its popularity with customers, almost all new applications are now offered as SaaS. In addition, software products that were offered on-premise for years are also being converted. The best-known example of this is Microsoft Office.
The following software products are SaaS:
- Salesforce
- Microsoft 365
- Netflix
- Zoom
- Slack
- Trello
As discussed earlier, the use of Software as a Service is beneficial because it is much more cost-effective for businesses. In detail, there are also the following advantages:
- Low cost and effort for installation and maintenance
- Fast deployment without loss of time for installation
- Scalability
- Automated and trouble-free updates
- Easy extensibility with other services
- Payment per user and therefore maximum cost transparency
The use of external services naturally also gives rise to risks when Software as a Service is used. For companies, in particular, the advantages and disadvantages compared with an on-premise solution must be weighed up carefully.
Before using the Software as a Service, the data protection situation must always be examined in detail. Depending on the application of the software, sensitive data can sometimes leave the company. It must therefore be ensured that the information is also stored securely and that data security is guaranteed. This can sometimes be a time-consuming and expensive process.
In the operation of the software, risks arise in the accessibility and performance of the service. The SaaS provider is responsible for ensuring that the software is always available, has few outages, and that pending updates are made promptly. If this is not the case, the purchasing company may experience expensive downtime that is out of their control.
For this reason, the service level agreements should be carefully checked and possibly renegotiated before the contract is concluded. These stipulate how the SaaS provider is to behave in the event of a failure and how quickly the service must be operational again. If the provider is unable to meet this service level, the customer may be entitled to compensation, depending on the agreement.
With both on-premise solutions and SaaS, a subsequent change of provider is only possible with a great deal of effort. The accumulated data volumes have to be migrated to a new system and the employees may have to be retrained. Therefore, the selection of the software and the provider should always be well thought out.
In addition to Software as a Service, other services have also developed in the area of “X as a Service”. Generally, these are offerings in which the provider concentrates on administration and the customer no longer has to take on few or even any tasks.
The opposite of this is so-called on-site or on-premise software. Here, the responsibility for the operation, the data, the servers, and much more lies with the organization that ultimately uses the system. Although this architecture involves a lot of work and responsibility, some companies still rely on this approach because it ensures that sensitive data does not leave the company.
With Infrastructure as a Service (IaaS), the management of servers, data storage, and networks is handled by an external provider in the cloud. The customer, on the other hand, accesses and uses the leased infrastructure via an interface. However, the user retains responsibility for the rest of the system, for example, the applications, data, or operating system. This also means that the user bears full responsibility for possible failures or repairs.
The next stage is Platform as a Service (PaaS), where the software platform is provided in the provider’s cloud in addition to the infrastructure. This option is used, for example, when applications are to be programmed. It is comparable to a virtual machine, which is provided by the provider. The user still has control over the installed programs, but all other responsibility lies with the provider.
The final stage in this structure is Software as a Service (SaaS), in which all previous stages and the software itself are operated by the provider in the cloud.
In their daily work, many data scientists already make use of Software as a Service products. This is partly because some programs can only be used as SaaS and partly because it also makes more sense depending on the use case.
One such SaaS product that many Data Scientists use is Google Analytics. The web interface offers the possibility to evaluate web tracking data directly, display it, and draw possible conclusions from it. Google Analytics can also be used as a SaaS tool. Even if you wanted to save the data yourself, this would not be so easy, because a data export from Google Analytics is actually not possible. Only existing reports can be downloaded as PDFs or the underlying data can be exported as CSV. In this case, it is therefore not even possible to do without a Software as a Service product.
However, there are also enough examples where it actually makes sense to switch from an in-house solution to a SaaS solution. In the area of machine learning, for example, the area of machine learning as a service has emerged, in which the underlying architecture is purchased.
Many current machine learning models, such as Transformers, require graph maps to be trained quickly. On conventional CPUs, the training usually takes many times longer. However, building an infrastructure with graphics cards is not only more complex but also expensive. Therefore, it can be worthwhile to resort to external resources whose environments have been specifically designed for machine learning and data science and thus be able to concentrate 100% on the project.
- Software as a Service (SaaS) is a category in the field of cloud computing in which software can be used without it being installed on the local computer.
- For the user, this results in, among other things, the advantages of low costs, as well as lower expenses for installation and maintenance.
- In addition to SaaS, there is also Infrastructure as a Service (IaaS) and Platform as a Service (PaaS) as alternative options for using the cloud.
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