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Over the last few years there has been a growing interest and use of an application delivery model called SaaS, which stands for Software as a Service. It's a software delivery model where everything is hosted centrally in the cloud. This application delivery model has not only gained widespread acceptance by individuals but by entire businesses as well. From accounting software to customer relationship management (CRM) software there is an extremely diverse set of offerings available, when it comes to SaaS based applications. And those offerings only seem to be increasing more and more as businesses see the benefits of having a SaaS based environment.

So what exactly are the benefits? Well, there really is a wide range of benefits, from cost savings to scalability. With the business itself, ultimately, determining what the true benefits are. After all, an extremely small business might benefit significantly, from the SaaS model, for the simple reason that they don't have the network or capability to host the application themselves on a local server. However, for a larger company that may have that ability to do it themselves, it might not necessarily be considered a benefit to them. Rather the benefit to them might be the cost savings from not needing to manage the associated workload that would come if they were to host the application internally. So the tangible benefits really are dependent upon the individual business and their current situation. But rather than trying to look at all of the possible situations we'll just take a look at some of the most common benefits.

Flexibility:

One of the more significant benefits of SaaS is the flexibility that it offers. It, typically, is offered on a monthly subscription basis and therefore the user is able to "test the waters" so to speak before they commit to any specific application. And because all that is usually needed on the users side to access the software is an internet connection there is little to no upfront requirements to get things up and running. All of which gives the user flexibility.

Costs:

The next benefit is the cost savings, which comes from a couple different avenues. With one of the main avenues being the savings on the infrastructure that would be required to offer the same thing internally. By using a SaaS based model there is no need to have the in-house servers and IT department that would be necessary to keep things running. Even if you were a small business and needed only one server that alone would cost you thousands up front. The second avenue for cost savings comes from not needing to purchase the software outright. In fact, a great example is Highrise, who offers a SaaS based model for CRM software. So now people are able to pay a very minimal monthly charge as opposed to the thousands that it would cost to purchase their own CRM software outright.

Scaling:

Almost all business desire to become more profitable. And they usually achieve that by growing as a company. Sometimes though growing can be difficult when there are too many constraints. Whether it be the physical constraint of a building that's too small or the technological constraint of not having a powerful enough network. In the case of the latter it becomes less of an issue in the SaaS environment. This is because the companies that are offering SaaS are laid out in such a way that they're prepared to scale and have the ability to do so quickly. Whereas most businesses don't have that capability.

Commitment:

When you have to purchase all the necessary infrastructure and software licensing as well as pay for the labor costs to get everything all set up you can be looking at a pretty hefty investment. And once that investment is made it will be extremely hard to go another route due to the amount of money that was spent. So there becomes somewhat of a hidden long-term commitment. Whether knowingly or unknowingly. With SaaS the commitments are extremely insignificant when compared to the alternatives. There is much greater freedom to test out the product and then simply abandon the idea if it ends up not being a good fit for you business. Which leads us to one of the main questions that businesses need to consider.

Does the SaaS model fit your business? After all, every business is unique and what works for one business may not work for another. So make sure that you review each of the above potential benefits that can be found in the SaaS based model as well as the many more that weren't mentioned before you make a decision on what would work best for your business.

Mark Thornton is an associate of DKBInnovative, a Dallas IT Consulting company that provides Dallas and Fort Worth with managed IT services.