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What Is Software as a Service (SaaS) in Cloud Computing?

Companies have discovered that some organizational and economic benefits can be realized by using Software as a Service (SaaS) applications in cloud computing. They provide the opportunity to have a third-party organization handle all the details that go into keeping complex applications running.

SaaS is not a stand-alone environment. Instead, these applications and services are frequently used in combination with lots of other cloud and on-premises models. Companies need their SaaS applications to couple with other applications and platforms on their own data center and with other cloud platforms.

As companies become dependent on SaaS applications, they begin to see a pattern of characteristics among the more successful solutions:

  • Generalized applications that incorporate the right mix of common services so the applications meet the needs of different companies across multiple industries.

  • True multi-tenancy means that all the users are using the same codebase. However, their configurations and data are stored in separate containers.

  • Highly elastic SaaS applications can easily scale up or down to support changing needs of a business. If a company increases its sales force, for example, it needs to be able to quickly add more licenses (seats) to its SaaS.

  • Self-service puts the power to acquire more resources and generally manage an application’s deployment directly in the hands of users. Customers can go to their portal and add more licenses, renew their contract, or reduce their number of licenses in a matter of minutes.

    You no longer need to contact vendors and then wait for them to make the changes. Self-service includes built-in billing, monitoring, and usage information that gives customers a unified view of what they’re paying and what they’re receiving.

  • SaaS applications are modular and service-oriented. Without this modular approach, it will be hard to change and difficult to have third-party companies join the ecosystem.

  • SaaS applications provide sophisticated business process configurators for customers. Each customer can change the process within the standardized SaaS application.

    For example, a company may want to add a process so a manager has to approve the price being offered to a new customer. A built-in configuration tool enables this to be done on an ad hoc basis without programming.

  • SaaS applications need to constantly provide fast releases of new features and new capabilities. This must be done without affecting the customer’s ability to continue business as usual.

The SaaS vendor must be able to ensure customers that their data and configurations are separate and secure from other customers’ data and configurations. Vendors are aware of customer concerns and implement extensive security, both technologically and physically. Ideally, applications should also be able to migrate data in a hybrid environment, which means allowing information to move to a customer’s private cloud or a different public cloud.

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