What is Software-as-a-Service (SaaS)?
Whether or not you realize it, I am almost certain you have encountered SaaS tools. You may know them as cloud applications, web applications, or some other term I’ve never even heard of yet – the terminology is always evolving after all. If you’re still unsure of what I’m talking about, SaaS includes all of those awesome and easy to use applications where you subscribe, pay monthly, and have access to your data any time, anywhere, on any internet connected device. No clunky downloads and no outdated software. We’re talking your Google Apps for Business, Salesforce, MailChimp, Dropbox and many more.
Advantages of SaaS Applications
While the advantages of using SaaS products are many, I’ll focus on what I believe to be the top five below.
Subscription Based Model
SaaS tools are subscription based, which allows companies to avoid the huge upfront costs of purchasing actual software and licenses that need to be installed and renewed. You pay monthly, and if it’s just not doing it for you, you unsubscribe and move on.
Hosted in the Cloud
SaaS tools are centrally hosted in the cloud, which means you don’t have to go through the trouble of maintaining and updating the software. You subscribe, and then the company that provides and hosts the software also maintains the code base and deploys updates to all subscribers regularly.
Your Data is Always Available
Your data is available all of the time and from any device. Since your data is in the cloud, you can log in from anywhere and on any internet connected device and do the work you need to do. Many products even have some offline capabilities that allow you to work offline and then sync your work the next time you connect to the internet.
A Pleasant User Experience
SaaS is still pretty new. This means that they tend to adhere to today’s design and styling standards. Never has the user experience played such an important role in the development of software as it does now in SaaS products.
Highly Focused and Effective Solutions
They tend to be niche products. This is great because they solve a very specific problem exceptionally well. Since they aren’t trying to be all things to all people, they are able to dig deep into a problem space and come out the other side with a genius solution that the big boys just couldn’t produce.
This niche quality of SaaS is actually a double edged sword that I’ll explain in depth in a future post. In short, businesses are relying on a growing number of niche SaaS applications to do their work and they need these applications to work together and sync up. Currently, they really don’t, leading to a big problem called ‘SaaS Fragmentation‘.
Essentially, SaaS tools attack their problem space brilliantly and make it easy for their users to access their data and use the product on any internet connected device. It really is a beautiful thing. With the many advantages of going SaaS comes widespread adoption.
Widespread Adoption of SaaS
I can’t think of a better way to illustrate how big SaaS is getting and how quickly it’s growing than by touching on some of the key findings from The Future of Cloud Computing 4th Annual Survey 2014. Honestly, this report is a gem and I highly recommend taking a quick look at it below.
Growth of SaaS
Cloud or SaaS tools are fuelling 49%+ of product development and revenue generating activities. If it isn’t immediately obvious, this statistic is huge as it shows that businesses are trusting SaaS applications for their most important activities.
Another finding that really stood out is the nearly 8x leap in application programming interfaces (API’s) over the last 5 years. An API is just a way to get independent SaaS applications to talk to each other. When you hear of a product integrating with other products, that is generally the work of an API. This statistic is key as it suggests that there are more and more SaaS solutions coming to market and the demand to have all of the applications talking to one another is growing as well. These API’s make it possible to cobble together a complete solution consisting of a number of integrated niche SaaS applications.
Main Drivers of SaaS Adoption
So what’s driving this growth? The report suggests the primary drivers include: a decrease in upfront costs, increased scalability, and more agility. Let’s unpack this a little bit.
For a couple of reasons, the costs to go SaaS are substantially lower up front. As mentioned previously, you subscribe to a SaaS application – you don’t buy it outright. So, your upfront costs in terms of access is generally just the cost of that first month. The other main contributor to the lower upfront cost is the fact that SaaS applications tend to require far less and sometimes zero training. Unlike their legacy counterparts, SaaS tools tend to be focused and therefore have little in the way of extra features that lead to cluttered and difficult to use products.
SaaS products are built to scale. What this means is that whether you have 3 people using a SaaS application or a company of 10,000 people, the user experience scales with it. Old school software built for a small company just wouldn’t cut it anymore if said company expanded rapidly. Alternatively, old school software built for the large enterprise might not scale down so nicely should said company downsize. A good SaaS solution on the other hand is size agnostic – it expands and contracts with your organization, offering a consistent user experience.
Finally, SaaS applications are just more agile than their legacy ancestors. You aren’t downloading software. You aren’t purchasing a version of the software that you will need to replace with a more recent version down the road – and oh yeah, that more recent version will probably cost you. No, SaaS applications are updated all of the time by the provider of the solution, so you are always using the most up to date version. Keep paying your subscription fee and you’ll continue to reap the rewards of being up to date.
Forward Thinking CIO’s and IT Managers Drive SaaS Adoption
The report found that on average, CIO’s named devising and executing on a cloud or SaaS strategy as their third highest priority. Ahead of SaaS is only business intelligence and security. Not bad. This growing importance is thanks to forward thinking IT professionals that see their role as stewardesses and masters of new technology as opposed to gate keepers. Rather than trying to keep up with their competition and stop there, they are advocates of using their mastery over technology to push their companies ahead and gain a powerful competitive advantage. Not everyone is cozying up to SaaS though. When it’s resisted or ignored, ‘Shadow IT’ rears its ugly head.
The Birth of Shadow IT
While one group is embracing the future and playing an integral role in shaping it, another is threatened and resisting SaaS. Why? Well, up to 80% of the IT budget is spent on maintaining current legacy systems. SaaS empowers the non-technical professional to handle a lot of the work they used to depend on IT for. Plus, as mentioned previously, the SaaS providers do most of the heavy lifting around maintaining and improving the software. So, if you work in IT and want the bulk of your work to remain in system maintenance as it has for years, SaaS is threatening your livelihood. This resistance to SaaS by an IT department is about as effective as prohibition with similar consequences though.
When IT resists SaaS, they only succeed in encouraging ‘Shadow IT’. Shadow IT refers to the fact that when IT insists on playing the role of gate keeper, employees will often adopt SaaS solutions and even pay out of pocket for them without IT knowing. The result? Sensitive company data tied to personal SaaS accounts and devices that IT has no knowledge or control of. Now that’s a problem!
The problem is even bigger than this though. With different employees using different tools to store different data, you’ve got a recipe for a billion tiny data silos. Not only do you, the IT Manager, not know about this data, but oftentimes other employees don’t know about each other’s data and accounts. The reason being, use of these unauthorized tools is often against company policy. So people do it secretly. This makes it very hard to leverage your company’s aggregated data to make stellar decisions and to create super efficient integrated workflows.
Wouldn’t it be better if you could leverage all of the SaaS accounts throughout the company, aggregate those accounts and get enterprise pricing and feature sets, and have a lot more control over your company’s technology and data?
The point of the story isn’t to go all in on SaaS without a plan. There are some definite downsides to SaaS adoption without a plan, and I’ll be sure to cover those in future posts. Rather, just because adopting SaaS poses some new and perhaps daunting challenges, don’t resort to staying in your comfort zone and maintaining the status quo at all costs. This strategy isn’t a winning one.
Blitzen + SaaS = Form-Based Workflow Bliss
Blitzen is saying “goodbye” to SaaS fragmentation.
We are making it easy for the business professional without a strong technical background to drag and drop their way to form-based workflow bliss. Build your form. Connect it to your favourite SaaS apps. Set simple automated events to eliminate repetitive data entry. Then, sit back and enjoy the fruits of your labour without writing a line of code. Awesome!
Blitzen is slaying the dragon that is shadow IT.
We know that shadow IT is born from the same people that lose sleep over it – IT Managers. Guess what? We don’t blame you for resisting SaaS. You are smart folk that recognize that embracing SaaS means embracing a billion different tools that don’t work well together. Yet, you know that people are going to want them to play nicely with one another anyway. Who’s going to be stuck monitoring API’s and creating integrations on top of their other responsibilities? You. Suddenly, maintaining ugly but mostly functioning legacy systems is rather attractive.
Until now, you didn’t know that we’ve got you covered!
We’ll make those integrations and automations happen. We’ll make sure that those integrations keep humming along like they should. We’re even looking at making it super easy for you IT Managers to see who is using which applications and how. We want to see your day-to-day shift from being IT maintainers to IT trailblazers.
We’re working around the clock to get this to you ASAP! You can submit the survey on our home page to have your say.
You’ve learned a lot in this post, so let’s just wrap it up with a short summary of key points.
- SaaS is a relatively new way of delivering software. It’s subscription based and hosted in the cloud – not on site.
- This way of delivering software gives rise to some awesome advantages such as: focused and easy to use solutions, lower up front costs, up to date technology, and location & device independent access to your work.
- SaaS is growing rapidly. Growth in terms of the number businesses relying on SaaS applications, the number of SaaS applications available, and the integration between SaaS applications is all trending upwards.
- With the adoption of more and more SaaS apps that don’t play well together comes the issue of SaaS fragmentation. SaaS fragmentation is bad because moving data through a workflow consisting of a number of SaaS apps can require a substantial amount of manual data entry.
- IT leaders that resist this change help create an environment conducive to shadow IT. Shadow IT refers to the phenomenon of employees subscribing to SaaS tools to do their work without IT knowing. This adoption often violates company policy and is a source of data silos.
- Blitzen is working around the clock to eliminate SaaS fragmentation and shadow IT.
Is your company heavily invested in SaaS or at least moving that way? What’s your experience been so far?
If not, what’s holding you back? Let’s chat about it below in the comments.