Software as a Service (SaaS)

Published 26 February 2020

Gartner, Inc predicts the global public cloud services market will grow by 17% in 2020 to £206.2 ($266.4) billion. Of this, the software as a service, or “SaaS”, market will continue to be the largest contributor, which is predicted to grow to £98.9 ($116) billion this year.

In the simplest sense, software as a service is a specific strand of cloud computing, whereby computing resources, for example software, development platforms, servers, storage and software, are accessible over the internet as a utility service.

In this article, Chris Little, a solicitor in our Corporate, Commercial and Regulatory team, considers the move away from the more traditional on-premise software model by looking at the benefits and drawbacks of cloud based computing, in particular SaaS. He also considers a number of the upcoming trends of this major cloud-based service.

SaaS Benefits:

• SaaS is location and device-independent, meaning that data stored on the cloud can be accessed anywhere in the world, via any computer that is connected to the internet and which has a web browser.
• SaaS is ‘task-centric’, as it is not linked to particular hardware, software or network infrastructure, and users are not required to install these things prior to making use of a cloud computing resource.
• SaaS is dynamically scalable, allowing users to utilise as many or as few computing resources as they require, thereby preventing users from investing in resources which may ultimately not be used.
• SaaS facilitates collaborative working, as multiple users are able to have access to, and exchange information in relation to relevant data, in a secure way.
• cloud providers often have significant resources available to undertake regular updates, maintenance work, patching, security testing, and also generally offer 24/7 technical support, in order to assist with any incidents which occur.

Having said that, SaaS does also have certain drawbacks:

• Users have little or no control over the service, including for example, the security measures in place. This is because any information used as part of a SaaS solution is stored and controlled by the service provider.
• SaaS programs require a working internet connection to be able to properly function. This means in the event of internet service outages, users may not have access to their software or data.
• Unwanted updates can be problematic, as although regular upgrades are generally viewed as a positive feature of SaaS, there are instances where users need to remain on older versions of software, for example, in order to remain compatible with third party applications.
• Customisations can be difficult to obtain, as SaaS applications often come in a standardised from. Therefore, the ability to customise the functionality and features to a user’s particular requirements is less advanced than that of on-site solutions.

Future Trends

Below are three future trends which we believe will have the most significant impact on the delivery of SaaS solutions:

Greater Focus on Mobility

Thanks to the rapid rise of mobile connectivity, there is a global trend towards internet usage through use of mobile devices, which SaaS providers are alive to. We predict that software providers will continue to develop their solutions for usage on tablets and smart phones, in order to keep pace with this growing demand.

Micro SaaS

The SaaS market is becoming increasingly saturated as the cloud computing solutions industry continues to grow. One way in which service providers are able to differentiate their offering is through “micro SaaS” solutions, which refers to the provision of additional features which are not available on an existing platform, thereby improving the user’s overall usage of the overarching SaaS product.

Artificial Intelligence

AI and other forms of machine learning are likely to continue to impact SaaS by automating certain features previously undertaken by members of staff, a common example being the use of ‘chatbots’ to answer customer’s queries in relation to their use of the solution. We also see an increased focus on personalising a customer’s experience through use of natural language processing and machine learning. In this regard providers are able to track and analyse a user’s online activity (interests and preferences), thereby allowing them to tailor the user’s experience accordingly.