If you've been keeping up with the latest advances in online or web-based technologies, you have probably heard about SaaS (Software as a Service) and Cloud Computing. What's the difference? Or, rather, is there a difference?
Conceptually, you will find definitions for these two terms vary from web site to web site. One expert says one thing, another expert says another. To add to the confusion, you'll discover there is often a lot of overlap in these definitions. For the purposes of this web site, you can consider "cloud" just another word for the Web. The Internet and the Web are up there in the clouds, so to speak. Hence, "Cloud Computing." All of which means if you are using an online, web-based service or financial program, you're effectively using a cloud-based service.
So where does SaaS fit in? Any software company that offers their business and/or financial programs or services on demand through the Web can be considered Software as a Service. Contrast SaaS with traditional packaged desktop software products such as PowerPoint, Quickbooks, Excel or Word. In the old software model, you purchased a product and installed it on your computer. Of course, with on-site desktop software came the ongoing headache and hassle of installing and maintaining the product, getting updates, fixing bugs, purchasing upgrades, etc. In many cases, your firm might have to dedicate an IT or tech person to provide endless tech support for your on-site software. In addition, if you have 10, 20, 30 or more users in your firm, you would have to purchase a software license for each user or desktop. The costs can grow quickly!
SaaS or cloud-based services can eliminate or significantly reduce all of those problems for your firm and your clients. What's more, the program you access through the Web is always up to date because the provider can install updates on their own servers as often as needed. The SaaS provider takes care of security, software updates, etc. All you need is an Internet connection to start using a SaaS (or cloud-based) program.
Another thing to keep in mind with cloud or SaaS programs is that you don't own the software, you simply pay for the right to use it online for a given period of time. (Think "buy" versus "rent" as an analogy.) Cloud and SaaS solutions can be provided on a subscription or pay as you go service. They are usually scalable as well, which simply means as your business needs grow, the SaaS program can grow with your needs, too. It's all up to you, the provider of the service, and the contract you agree to.
How do you define SaaS and cloud-based programs? Do you disagree with the definitions described here? No matter how you define these terms, the key point to take away is that SaaS (or cloud computing) is transforming the way we interact and do business with our clients. And, ultimately, that's what truly matters most.