The One Question Every Business Should Ask Their SaaS Providers
Cloud computing has officially arrived. Once a considered a trend, cloud computing services now play a fundamental role in how companies deliver and consume technology.
When most people think of cloud products, they’re referring to software-as-a-service, or SaaS. These cloud-hosted solutions allow companies to instantly access a wide variety of services, from accounting tools to patch management to documents and spreadsheets, that are hosted remotely via the internet (“in the cloud”) versus on local servers (“on premises”).
Cloud computing, however, extends beyond SaaS across the full technology stack. It includes platform-as-a-service (PaaS), infrastructure-as-a-service (IaaS), and more. While not all “as-a-service” offerings are relevant to every business, it is beneficial to understand how the full spectrum of cloud offerings works. Cloud computing hasn’t only transformed how software is delivered, it has changed how it’s built – and even for end users, how it’s built matters.
IaaS vs. PaaS vs. SaaS: What's the difference?
To better understand why the full range of cloud offerings matters, even to the casual SaaS user, let’s break down the difference between the three main categories of cloud services.
IaaS gives IT teams a virtual foundation on which to run and manage their applications, runtime, OSs, middleware, and data. It balances flexibility and scalability with optimal control to future-proof the business.
Infrastructure-as-a-service uses virtualization technology to deliver infrastructure like servers, storage, network, and operating systems. It allows companies to reduce their on-premise infrastructure and hardware expenses in favor of a pay-as-you-go service that scales with their needs. Instead of managing physical machines and maintenance, which can be labor intensive and expensive, IaaS users get infrastructure on demand to build their business solutions. As a result, companies can focus on their primary business – which likely isn’t server hosting.
Examples of IaaS include Amazon Web Services and Microsoft Azure.
Platform-as-a-service is exactly what it sounds like: a platform for companies to build applications, operated remotely in the cloud. PaaS solutions include vendor-managed operating systems, middleware, and runtime alongside IaaS components like servers and storage, so IT teams have fewer elements to manage and maintain. PaaS offers the framework and components for developers to design, create, and deploy applications in a streamlined and cost-effective way.
Like IaaS, PaaS is fully scalable and built on virtualization technology, with resources and availability that can be dialed up and down as needed. PaaS makes it easier for teams of developers to collaborate, especially on custom applications, and accelerates the pace that companies can bring applications to market. It abstracts away complexity so developers can focus on delivering innovative applications that add value to the business.
Examples of PaaS include Amazon Elastic Beanstalk, Force.com, and the Google App Engine.
The most well-known and commonly used category of cloud services, SaaS enables businesses to access and run applications through the internet. Customers no longer need to own a perpetual license or physical installation, they simply subscribe to access software. With SaaS, the vendor manages everything, from the infrastructure through the applications and data. The software is easy to use, quick to set up, highly scalable, always available, and typically cost-effective, with subscription models that turn CapEx into OpEx.
Software-as-a-service removes all of the baggage of traditional on-premises solutions. IT teams eliminate the need to spend time and money on installing, managing, and upgrading software. Users just need a connected device and a browser. The vendor handles all technical issues, so the business can dedicate its resources to its core competencies, innovation, and growth.
Examples of SaaS include many of the tools that most people use every day, like Google GSuite, Microsoft Office 365, Dropbox, and Salesforce.
Why platform matters to your business
It’s clear that the as-a-service delivery model brings a number of benefits to the business. SaaS in particular has made it dramatically easier for organizations to leverage targeted, high-quality software to meet their rapidly evolving requirements. While SaaS does come with less control than legacy on-premise systems, the advantages outweigh the drawbacks in most cases for most companies. These advantages include:
- Lower total cost of ownership with demand-driven pricing model
- Zero maintenance, so IT staff can focus on value-add activities
- Fully secure, available, and performant
- Flexible and scalable to meet changing business needs
Upgrades are another notable benefit. Prior to SaaS, upgrades meant massive releases that often broke existing configurations and required new training to learn. The software-as-a-service model changes that paradigm. With SaaS, smaller upgrades are released more often. Users may not even notice them, or may be able to turn on new features when they’re ready. A modern UX ensures that users are guided through any changes and that the designs are intuitive and easy to use. These frequent, lighter upgrades reduce risk and change management issues while guaranteeing that users can always access the latest capabilities.
These benefits are real and tangible, but business leaders shouldn’t limit their cloud computing strategy to SaaS. Platform plays a critical role as well.
As mentioned above, a platform is a structure that allows multiple products to be built within the same technical framework. Using shared components leads to faster, higher quality application development. All applications built on the platform share security measures, master data, a common user interface and design language, and integration points and APIs. Companies and applications that integrate with the platform can leverage specific business processes and functions and data to help extend its value.
As a customer of a SaaS application, then, you automatically benefit when your SaaS vendor uses a strategic platform approach. Your application is updated and improved more quickly and reliably. The software improves from using a standardized set of trusted components. And your SaaS product is likely part of a bigger, more easily integrated ecosystem of applications, which broadens its potential value.
The benefits of a platform approach grow exponentially, however, when that platform is opened up to your business. A shared platform leads to deeper data insights and economies of scale. Instead of multiple software solutions that don’t talk to each other, and disjointed data that must be extracted from disparate locations into Excel or a local database to build reports or glean insights, your business gains a single source of truth. In some cases, you can even use the shared platform to develop your own unique solutions that automatically integrate with your existing solutions.
By bringing multiple SaaS applications into one platform, your organization becomes empowered by your data without undergoing costly custom development. You gain a holistic view of your operation from which to make better, smarter decisions. The software that you already subscribe to in order to run your operations becomes much more intelligent and data-driven, so your leaders can run the business more effectively and proactively.
So what’s the one question every SaaS customer should ask their vendors? “Do you use a shared platform approach?” A shared platform expands the value of software-as-a-service, opens up tremendous possibilities for synergy between systems, and serves up your data in a cohesive way that makes it easier to understand and act on. SaaS applications are fantastic. But the magic really happens when you open up the platform.
Andrew is an innovative, customer-focused product manager and product strategist who thrives on simplifying customer business processes through technology. He has a deep expertise in managing the development of B2B enterprise software and SaaS platforms. Andrew is focused on creating value for customers by leveraging data to improve decision quality and speed. He is highly skilled in leading, coaching, and motivating teams to meet and exceed project objectives.