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How SaaS Works PDF

How does SaaS or Software as a Service work?

We tend to answer this by addressing how software was purchased and deployed in the past and how SaaS differs.  The truth is, you probably use SaaS or "Software as a Service" now without even realizing it.


    "Conventional" software has operated like this for decades:

  • Users buy a license for a software program or application from a vendor
  • Users may buy a boxed CD/DVD or download the software, or it may come bundled with a hardware purchase
  • Users install it on their own PC and are responsible for maintaining it and updating it themselves
  • Users may or may not purchase (or be required to purchase) a maintenance or upgrade package that provides support, patches and/or updates to the software as they are released by the developer

One of the key items here is that you do not OWN the software -- rather, you own a license to USE the software as permitted by the License Agreement.

SaaS or Software as a Service can offer a variety of changes to this model that may make it a better or more economical solution for many customers:

  • Companies RENT licenses or access to the software from a Service Provider or Managed Service Provider (MSP), that actually runs on servers or devices owned and maintained by the service provider
  • SaaS offerings are usually run from large datacenter facilities with redundant power, battery backup, climate controls, etc. that are often out of reach of small and midsized companies
  • Users may need to install something on their PC to allow the MSP to manage the software
  • The Managed Service Provider is generally responsible for maintaining and updating the software, and often includes some level of support for users in the monthly (Quarterly or Annual) fee.

This model has certain benefits for companies and end users of applications that can help smooth over some of the problems associated with maintaining software that is purchased under the "conventional" model:

  • SaaS allows MSPs to specialize in maintaining a specific application or suite of applications in a consistent and repeatable way, thus simplifying operations and efficiency for all users
  • SaaS allows MSPs to maintain their offerings consistently by automating testing, monitoring, maintenance and upgrades without sending out constant updates that need to be applied by end users
  • SaaS allows smaller firms or organizations with limited (or no) IT staff to benefit from economies of scale and efficiencies implemented by MSPs
  • SaaS allows SaaS applications or even a fully hosted desktop to be highly available, monitored and kept up-to-date with the latest versions of applications
  • SaaS allows companies to pay to USE the software they need, without making a huge investment in infrastructure such as servers, generators and climate control that is often recommended for "server rooms"
  • SaaS helps companies avoid the large up-front capital outlay for servers, software, etc. by "renting" access to what they need and paying monthly, quarterly or annually
  • Services are generally accessed via the internet.  As such, they are often available to users from the office as well as on the go

In its most basic form, webmail or online banking are examples of software as a service.  These services allow you to access information and interact with information without installing a software package to do so.  You simply log on and access the information you need as a service.

As high-speed internet has become more accessible to businesses, the Software as a Service model has helped businesses with stretched or limited IT resources take advantage of technology to help their business processes improve. The SaaS model has been used extensively for email, CRM, and even accounting packages.  The ability to access the software as a service helped speed the adoption of email and CRM over the last decade and a half.  The high level of complexity of managing each of these services as well as the need to "centralize" the information they contained made them ideal candidates for SaaS deployment.  By accessing a central mail server, most small businesses now have access to email -- without the trouble of hosting their own email server.

The IDO Group, Inc. is a managed service provider that works with companies that are looking to put the benefits of SaaS to work for their business.  IDO provides a variety of solutions for centralizing, hosting and maintaining the tools businesses need, from single application hosting to a full hosted desktop. We would enjoy an opportunity to learn about your business and see if SaaS might help you reach your goals, without straining your IT resources or your budget.

To learn more about our services, call us at 336-987-4335 or email This e-mail address is being protected from spambots. You need JavaScript enabled to view it