Traditional on-premises software uses a perpetual license delivery model, which involves upfront charges to purchase a software for an indefinite period. Usually, technical support and updates come with extra costs and therefore once the license expires, budget holders/managers may stick with the same version that was paid for initially. All the responsibilities associated with hosting the software lie with the end user and their IT service teams. These responsibilities can include:
- Operating system
- Penetration testing
- Server maintenance
- Data backup/Disaster recovery
This approach no longer offers value for money for a Chief Information Officer (CIO) or department manager, given the progression of Cloud computing technology and its continually lowering costs.
Software-as-a-Service (SaaS) is a cutting-edge software delivery model that removes the drawbacks associated with traditional software licensing. SaaS is usually hosted in a public cloud (AWS, Google Cloud) or private cloud (solely for your organisation) which offers significant benefits compared to traditional methods.
Consolidating software delivery through a SaaS subscription allows you to manage costs and avoid paying for software/software tools at times your team has no need for them.
Herebelow, I outline seven reasons that SaaS should be the first option you choose when thinking about purchasing new software, developing custom applications or developing engineering software tools.
1. Lower Total Cost of Ownership (TCO)
The overarching value of SaaS is the gain you get by lowering your TCO (see graph below from Digitalist Magazine). Usually, companies pay large upfront fees to purchase a perpetual software license and then pay maintenance and upgrade fees at defined periods.
A monthly or yearly subscription fee is paid to access SaaS offerings. There are no upfront fees or cancellation fees - you can manage your usage with inbuilt monitoring and reporting tools provided by the vendor. This allows you to manage costs and avoid paying for software at times your team have no need for it.
With the SaaS approach, the responsibilities mentioned above are part of the service that you pay for. Moreover, internal administration and IT costs on the user’s side are reduced because the vendor is accountable for software delivery.
With SaaS, companies who subscribe to a service benefit from its elastic and scalable nature, thanks to “economies of scale” associated with Cloud computing. Imagine a scenario: you require a specific software tool or module for the duration of a six-month project. With SaaS, you would typically pay for those six months and reinstall your subscription when you need it again. With perpetual licensing, you pay for a non-adjustable duration, usually at least a year, and the software sits idle on your servers for six months costing you double for services you don’t need.
2. Enhanced security
Engineering software tools used today are mainly developed in Excel or Mathcad and potentially read in text files. Excel files are quite susceptible to security attacks, with hidden scripts ready to launch when the workbook is opened. There is almost no protection of your data within these spreadsheets. Sheets can be password protected but substantial effort is required. Password protected workbooks can be bypassed using brute force or without any software in under two minutes.
With SaaS, the vendor is responsible for delivering robust and secure applications. There is no need to password protect the user interface in a SaaS-style tool like what is done in Excel. Typically, for the end user several security layers come as standard with add-on options available:
- Vendor security
- Industry standards
- Data encryption (HTTPS)
- Industry lessons learned
- User authentication
- Multi-Factor Authentication (MFA)
- Real-time monitoring
- Suspicious login activity
- Cloud host security certificates
- Customer Virtual Private Network (VPN)
- Customer audit
- 3rd party security audit
Consistent quality of engineering software tools is a priority for team leaders/engineering managers. One downside with traditional engineering software tools is that they are not centralised. Usually, an engineer develops an engineering tool packaged as Visual Basic Application and saves at a common access point to be used by offices in different locations.
Due to its decentralised nature, once deployed, it is hard to ensure that quality, version-controlled software, as well as bug fixes and updates are reaching your team. As a result, several versions of a particular tool may be in circulation across several company offices. This can lead to lost time to rectify the erroneous results and results in a loss of confidence in the tool and perhaps the team.
Another issue is data input and accessibility. The fact is that a huge amount of duplication is present in today’s practices. The same data may exist in several spreadsheets saved and scattered across your network. Unfortunately, there is no easy way to search and access this data with offline style tools.
SaaS relieves these issues by centralising all aspects in one place (build, deploy, update and access). The power of centralised databases can offer enhancements to workflow and productivity of the team.
At Computation Hub, we use GitHub to merge new features into application and website updates. Again, with traditional methods, your team is likely unable to do this efficiently or at all perhaps.
Rapid prototyping and testing of new features can be tested in a “staging environment” with the end user or your team before potential merging into production (Heroku). This requires significant patience with the Excel-based method and leads to long delivery times where Git style control systems are not put in place.
4. No downtime for software updates
With traditional software, upgrading to the latest version can potentially lead to downtime for your team. Managers usually try to avoid upgrading until every three to five years so as to allow consistent uptime. With the concept of SaaS, updates can be developed and tested by the vendor locally before deployment. Once ready, they can be pushed into production (i.e. to the end user) and occur incrementally on a regular basis. Through the cloud delivery model, the end user receives the updated software without having to any action.
Potentially, depending on the significance of update, the user may be asked to choose to stay with the current or upcoming version. On occasion, bugs or severe errors are missed before the version is sent to deployment. Thankfully, with SaaS two remedies are possible. Remedy one could be reverting to the previous working version. The second remedy would be for the vendor to issue a patch or new software revision. All of this usually takes place without downtime/action on the user’s side.
5. Instantly available on any device
One of the strong benefits of SaaS is that it’s accessed in your web browser, meaning only an Internet connection is required. With the vendor bearing accountability for aspects relating to software hosting, it means that your team can access the software without waiting.
Normal procedures performed by your IT services team to onboard a new software or software upgrade are eliminated with SaaS. Now, your team can start their work faster without downtime. Moreover, it frees up your IT team to focus on more critical tasks within the business.
By adopting SaaS, it does not matter if you are a Linux, Windows or Mac user, the operating system does not impact software accessibility, unlike traditional enterprise software. Moreover, this means that your team or sub-contractor can access analyses or results in real-time from any desktop or mobile device with a browser and Internet connection.
6. No specific hardware/server requirements
Due to the fact, SaaS runs in the browser, there are no specific hardware or server requirements. Public Cloud servers (AWS, Google Cloud etc.) are used to host the software, which the vendor would choose and configured to deliver the best performance. Due to the elastic nature, it is quick to upgrade capacity to match an increase in users or handle demands for data storage.
With a Private Cloud, it is possible to host and run SaaS applications with existing IT infrastructure owned by the end-user organisation but without TCO is not reduced.
Working online means that users can upgrade or downgrade quickly (e.g. features, storage etc.) to shorten project lead times and manage costs. Doing this with traditional software and tools can be time-consuming, incurring and delivery delays that impact project budgets. With SaaS, it is quite possible to upgrade to extra computing power and then downgrade rapidly when the need has passed.
As mentioned, SaaS is accessed over the Internet and so there could be occasions where connectivity is lost. This can be problematic when your team is approaching a deadline. There are two workarounds where data or the current state is saved in the browsers local storage. Alternatively, a backup local desktop client could be launched.
Desktop clients can permit local work to be executed thanks to emerging technology. Obviously, a team member wouldn’t be able to share information in real-time but data can be set to automatically synchronise once an Internet connection is present.
SaaS applications are accessed with company email addresses and a user-defined password. Passwords are a problem to remember when accessing a software online especially when we have several dozen online accounts and passwords to remember. Password sharing is now illegal in the United States and is not advised.
There are several ways to mitigate the risk that your employees would share their passwords to colleagues. One way is to use a passwordless system. It works by asking the user on the login screen to send a “magic link” to their email account. Clicking on that time-sensitive link gives access to the service.
Another way is to implement real-time monitoring of access (which Computation Hub can offer). This works by checking if there is a variation in IP address or access location and consequently warning the user or the client representative manager that such activity is happening.
Moreover, the vendor could suspend the service depending on the terms and conditions of use. Another deterrent is to use multi-factor authentication and to associate that account with a particular mobile phone number.
Flood protection (i.e. defense against brute force attacks) can be avoided by using complex passwords. The user can be prompted to enter an alphanumeric password with special characters reaching a certain length. (Picture source: Imgur)
SaaS is fast becoming more and more popular across industries and is certainly a way to make a positive difference in your team’s lives. Companies like Tesla use this software model to power their cars. Organisations in the energy sector are thinking about Cloud hosted software but there remains doubts about costs and data ownership.
SaaS could be interpreted as inflating operating expenditure (OPEX) but other factors (e.g. elasticity and scalability etc.) should be considered to fully evaluate the benefits. There is debate around the payback period between on-premises versus private cloud-based SaaS. But with SaaS considered in a cloud, economies of scale is the clear differentiator. It is important to outline that TCO should not be the only factor to consider when thinking about changing to SaaS or staying with the on-premises model. Hopefully, this article gives a wider perspective regarding the main factors and reasons to change.
Data ownership is a topical issue given that there is a lack of regulation right now. With clarification in the subscription terms and conditions, positive outcomes are possible and progress is evident in other industries. Cybersecurity is a topical issue with severe consequences if there is a breach. Although, security is in the hands of a SaaS supplier and modern techniques are available to mitigate risks, the user and their IT network services team must still stay vigilant.
SaaS-based apps are predicted to grow at a significant pace over the coming years. The trends show that companies are moving towards a SaaS delivery model to reduce costs. At Computation Hub, we believe the ideal way to disseminate SaaS applications is via a digital hub. Find out more information here.