SaaS is often referred to simply by the product name or as "cloud" or "app," so the term is not very well known. As a result, some people are not aware of what kind of business model it is.
In addition, the SaaS industry is full of katakana terms and English technical terms, so even when reading media articles, it tends to give the impression that it is difficult. However, in reality, SaaS is not a particularly difficult business model. Most of the English characters used are combinations of simple English words.
However, SaaS is quite different in some ways from previous business models, and it is true that there are key indicators and terminology unique to SaaS.
In this article, we will explain the basic knowledge of SaaS that people involved in BtoB SaaS business for the first time should know.
What is SaaS (Software As A Service)?
SaaS is an abbreviation for Software as a Service and refers germany business email list to software services (cloud services) that can be used via the Internet.
Users can use software developed by vendors (service providers) via the Internet, as shown in the diagram below. As mentioned above, SaaS is now quite widespread, and many companies use it in a wide range of areas, including human resources, accounting, procurement, sales support, marketing, customer service, and travel expense settlement systems.
SaaS Structure
(Image source: Ministry of Internal Affairs and Communications )
The advantage of SaaS is that you can use the software without having to purchase a package or develop it from scratch.
No initial cost required, can be used immediately, generally low price, and cancellation is easy. Server management and security measures are handled by the vendor, so it is not a problem even if there is no server administrator in the company. It can be easily introduced even by small and medium-sized enterprises with low IT literacy. For this reason, the number of companies switching to SaaS instead of on-premise (self-developed systems) is increasing year by year.
The definition of SaaS can be limited to "all cloud services being called SaaS" or "software services provided via the cloud." For example, the Ministry of Internal Affairs and Communications' Communications White Paper provides statistics by classifying them as follows. When looking at the statistics for SaaS, be sure to check the definition of SaaS used in that survey .
Types of Cloud Services
(Reference: Ministry of Internal Affairs and Communications )
The background of the birth of SaaS
The background to the emergence of SaaS is the advent of the Internet, its increasing speed, and technological innovation.
As shown in the diagram below, the software market has evolved from general-purpose computers to downsizing to PCs and then to cloud computing.
Changes in IT architecture
(Source: Ministry of Economy, Trade and Industry )
With the advent of the Internet in the 1990s, ASP services emerged that allowed users to use software over the Internet. The functions and uses were the same as current SaaS. However, the Internet was not as fast as it is now, and there were high hurdles to using it, such as the need to install software on the user's computer, so it did not become widespread. This was the so-called on-premise era.
Cloud computing (Software as a Service) appeared in the mid-2000s, when high-speed internet lines became widespread. It was an evolved version of ASP services, and the term SaaS was coined and started to be used by various vendors.
SaaS has spread rapidly because users can now use software without stress via high-speed internet. Furthermore, in recent years, with the emergence of technologies such as AI and machine learning, SaaS functions have become more advanced, and some companies are gradually evolving from SaaS to platform providers known as PaaS (Platform as a service).
