What is SaaS? SaaS in Plain English

Common utilities like electricity, water and telephone services are comparable to utility computing.  In fact, the term utility has been used to describe this particular service in order to show similarities with other consumer-based utilities.

Utility computing works on per use and per demand basis.  Customers will pay the service providers only if they use the computing utility.  Service providers literally rents out their computing and data storage services and charges users based on the length or duration of the use.  This is also known as metered computing or metered computing services.

Utility computing can cut data computing expenses of companies.  It is a step ahead of fixed payment for other on demand services.  Because companies pay only the service providers whenever the need arises, they can easily control their computing expenses.  On lean days, companies may opt out from the service only utilizing it when there is a surge in computing demands.  Companies can also save a lot because it would be unnecessary for them to invest in purchasing lots of computer console, server main frames, software, and of course, personnel to run the system.  L a company has to do is to activate the account with a service provider and outsource their computing tasks.

On demand services like utility computing is becoming a popular service for most consumers.  Other applications using pay per use principle has been applied to other online services such as pay per view, video on demand, pay per download, web access, and Internet hosting

Utility computing is a very innovative service.  This kind of business model enhances the maximization of limited company resources for a very low related cost in investment and overhead expenses.


What is SaaS?  Software as a service or SaaS has become so widely used today that its meaning and definition has been stretched and modified to suit every vendors marketing needs.  Fortunately, there are some top SaaS companies that try to give a more specific answer when asked what is SaaS to them.

So what is SaaS?  Sadly, SaaS will never be properly defined because there will always be new definitions, sub-definitions as well as twists and loopholes in the definitions of SaaS.  But to make it a bit easier for an individual to understand what SaaS is, four basic characteristics have to be present in order for a company to truly be called an SaaS company:  it should be multi-tenacity, the services should be shared, it should have a feedback mechanism, and most important of all, it should be a pay-as-you-use only service.

What is SaaS when it comes to multi-tenacity and shared services?  SaaS is a multi-tenant software that allows different customers, from single individuals to large corporations, to run the same program.  There may be basic differences here and there but the program should basically be the same.  SaaS should be able to link up to other services that are available online like third-party programs that have partnered with the company.  For example, if an SaaS company offers web statistics service, it should also be able to access other programs that enable it to monitor the activities of the website, user database, and many others.

What is SaaS when it comes to feedback mechanisms and pay-as-you-use service?  SaaS companies should always have a feedback mechanism in place so that customers, and even the software, are able to immediately report problems or difficulties encountered as the program was used.  This makes it easier for updates to be made.  It should also be a type of program that does not bind the customer to the service for a long period of time.