What is SaaS?

SaaS stands for “Software as a Service.” Software as a Service is the process of creating a piece of software to perform a specific function, or service, for its users. Typically SaaS solutions are “cloud-based” software solutions that operate on external servers and not on an application on the local user’s computer. As with all software, you purchase a license to use the software. Unlike applications you install on your computer, if you stop paying for the service, you lose access to the software.

Access

Users will typically access SaaS solutions via their web browser on their computers or mobile devices. All of the information and application functionality happens on the servers where the SaaS is hosted.

What are some examples of SaaS Solutions?

There are SaaS businesses everywhere, and you probably are using some right now. There can be technology solutions, sales solutions, entertainment solutions and even dating solutions.

Some examples of SaaS solutions include:

What is SaaS? Salesforce Logo

Salesforce, which is a CRM (customer relationship manager), that helps salespeople control sales pipelines;

Calltime Logo - Online Entertainment Casting

Calltime, an online entertainment casting, and performer evaluation dashboard for professional entertainment producers and talent;

G Suite from Google - What is SaaS?

G Suite, a suite of online tools such as email, worksheets, calendars, online storage, and other office productivity tools from Google;

iThemes Sync logo - What is SaaS?

IThemes Sync, a control panel to monitor the health of multiple WordPress websites from one location;

Wealthy Affiliate, a suite of online tools, education, hosting, domains and affiliate programs for affiliate marketers;

Jaaxy, online keyword, and digital marketing platform;

What is SaaS? Realty.link - Link Marketing for Real Estate Professionals

Realty.Link, an online professional link marketing web application targeted at helping real estate professions get an online presence;

(Levered Income readers can get 20% off by using the discount code Levered20)

What is Saas? - Hybrid SaaS Solutions

A hybrid SaaS solution combines both local applications on the user computer and application functionality in the cloud. This is to control the user interface on the local side and give users more functionality than what a browser could achieve.

Some examples of Hybrid SaaS solutions include:

Grammarly Logo - What is SaaS

Grammarly, a writing application that checks your grammar, spelling, and offers help in improving your writing (which I use every day and am using to write this article!);

What is SaaS? Evernote Logo

Evernote, the cloud note application that has desktop and mobile apps to help with note-taking, research and note organization;

What is SaaS? Microsoft Office 365

Microsoft Office 365, the ultimate cloud/ desktop combo that melds Word, Excel, Powerpoint and other apps with nifty cloud functionality like online storage;

Adobe Creative Cloud - What is SaaS?

Adobe Creative Cloud, a collection of creative tools for graphics, video and web media;

What is SaaS - Vectorworks

Or Vectorworks, a CAD (Computer-Aided Design) design software that enables you to design almost anything.

Charging for a “Service”

As these applications perform a “service,” the software creators typically charge a subscription to use the software on a monthly or annual basis. Included in these fees are software upgrades that happen along the way.

True cloud SaaS solutions handle software upgrades in the cloud, without the need for users to upgrade anything on their computers (a huge plus for users and why SaaS has become so popular). A user logs in via their browser and is ready to go. The company’s software engineers have dealt with all of the upgrade issues and conflicts.

Pros and Cons of using SaaS Solutions

Pros of using SaaS Solutions

  • Less expensive than purchasing the application.
  • You don’t have to worry about software upgrades.
  • Access from any device.
  • No “upgrade” costs.

 

Cons of using SaaS Solutions

  • Lose access to files when the subscription is canceled.
  • There is no functionality without an internet connection.
  • There are no local apps on your computer, and the ability to use the software after the subscription period is lost.
  • Expensive Upgrades
  • OS updates can crash the software.

 

My Thoughts on SaaS and Lever Rank as a User

I like SaaS and hybrid SaaS applications and use them in my everyday work.

I currently use all of the SaaS and Hybrid-SaaS solutions in this article except for Salesforce (which I used for a few years but decided it was too much software for my needs).

I find the true SaaS solutions the easiest to use, and they have some of the highest Lever Rank due to that ease of use and “bang for the buck”. I would be lost without G Suite, and at only $5.00 per month, it is an unbelievable value. I am thinking about raising its Lever Rank from 90 to 100 because it is something everyone should have no matter what you do. It has everything you need for business, all in one place.

As a user, I focus on getting work done, not messing with software. The ease of not having to deal with software upgrades on your local computer crashing your software is invaluable. In fact, in our mission-critical production machines running custom software, we configure the machines never to update. We disconnect them from the internet, so an operator doesn't perform an operating system update and crash a critical system. With a SaaS solution, it is improbable that an operating system update will crash all of your software.

As a business owner, a SaaS application business with recurring income is the “Holy Grail” of businesses, and is highly valued by investors. This article's goal was to introduce you to the world of SaaS and give you an overall understanding of the concept. I will go into developing SaaS applications as a source of income in another article.

Let me know if you have any questions in the comments section – I am happy to help and thanks for reading!