What is software as a service (SaaS)?

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Even if you’ve never heard the term software as a service (SaaS) before, you know what it is already. You’re using it right now, and I’d wager that you have at least a couple of other software as a service programs open in another tab (or another window). It’s everything from Google search to Facebook to the Thoughts on Cloud blog.

What makes these SaaS? They’re all cloud applications, which means that most of the storage and processing takes place on computers, called servers, owned by Google, Facebook or IBM. Then, when you connect to them, you use a fairly simple and common client (often a web browser) to access the service and interact with it. It often doesn’t matter if that browser is on a PC, a Mac, iPhone, Pebble smartwatch or any other kind of computer; SaaS makes the same cloud-based services available on a multitude of devices.

(Related study: Champions of Software as a Service: How SaaS is fueling powerful competitive advantage)

What makes SaaS so great?

It seems simple enough: do most of the application’s work in the cloud, then provide access through a web browser or thin client and you’ve got SaaS. So what makes SaaS powerful? Well, if you use YouTube or Craigslist, you already know. When everything is stored and processed on the cloud, thousands (or even millions) of people can interact with the same bit of information at once. While you’re liking your friend’s Facebook post in Boston, her friend in Singapore might be commenting on it.

And even better, software as a service means you don’t have to have a powerful computer to do truly powerful things. In IBM Enterprise Marketing Management group, we’ve harnessed the power of SaaS to answer questions like “How would my overall profits for North Carolina be impacted next week if I lowered the price of these three beer 12-packs by two dollars?” With SaaS, you can kick off that analysis from your phone, tablet, or computer—and recruit dozens of servers in the cloud to calculate the answer for you. Until recently, you could even Google search over text message. That means you could have used a phone made 20 years ago to perform a computing task utilizing thousands of servers!

What SaaS means for enterprise

Consumers aren’t the only winners with SaaS; enterprise SaaS was worth $14.5 billion in 2012, a number that is expected to grow by more than 50 percent in just two years. From to NetSuite, SaaS is starting to reshape the way we work in the same way it changed how we play and connect. If you’re like me, you use dozens of applications for work, each more clunky and less useful than the last. Why can I load that viral video in half a second by googling “ketchup robot,” but can’t find that one e-mail from last week?

IBM has spent the last century helping businesses run better, and it’s turning that juggernaut to enterprise SaaS. Wikipedia’s history of SaaS shows how deep those roots go—IBM was one of the first companies in the world to centralize computing resources. And now we’re working on the next step in enterprise SaaS: collecting the power of human resources.  The problems we face today require collaboration on a scale humans have never seen before, and it’s time for our tools to catch up to a globe that’s already connected. We’ve already built over 100 SaaS applications to address the changing needs of businesses worldwide, with more on the way.

(Related: Top five advantages of software as a service (SaaS))

Building your own SaaS

So how do you create your own powerful SaaS solution and make it available to that multitude of devices? First, you’re going to need to build your application in the cloud. Lucky for you, IBM’s very own SoftLayer is currently offering one month of free cloud service on a machine with one core, one GB of RAM and 25 GBs of local storage:

Whether you use SoftLayer or another cloud provider, I’m happy to answer your questions. So leave me a comment below or find me @triswarkentin on Twitter!

Learn more about cloud basics in our series: Cloud 101

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Caroline Langley

Read your blog. It was very informative. Was always interested in cloud technology and with it the use of SaaS through cloud. I have been using some applications stored in cloud myself and it has a lot of potential in future.The only concern with cloud technology is the security of data.



Hi – If one were to setup a SaaS Model choosing an instance of a Product like Google Appliance sitting on-top of IBM Softlayer as a infrastructure, then how can one calculate the cost of such a service in terms of “Per User Cost” or “Per CPU consumption cost” -for using such a customized SaaS service….

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