Software as a Service (SaaS) has transformed the tech industry over the last decade. This post defines what it is and what it means for small charities in the UK.
What is SaaS?
SaaS, as the name suggests, is a way of delivering software as an ongoing service rather than as a one-off product. Most SaaS products are:
- licensed on a monthly or yearly subscription basis,
- hosted in the cloud so you have access from anywhere, and
- built on a multi-tenant architecture.
These characteristics of SaaS combine to create a system that is very beneficial for both client and vendor. We’ll explain each in turn and what the benefits are.
With SaaS you don’t buy software, you license it. You don’t own the code or any rights to copy or redistribute it.
The license model in itself is not radical or new - software has been sold on a licensing model for years. For example, if you buy a copy of Microsoft Word for your laptop, once you've paid you can use it forever.
But SaaS licensing is based on a regular subscription and that has radically changed the relationship between supplier and customer. In the old world of lifetime licenses, once the sale was made the supplier had no incentive to keep the customer happy. If they happened to issue updates to the software post-sale they were often minor and sometimes incurred additional cost. Now, if a product is not continually improving the customer will cancel their (often monthly) subscription and move to a better system. So suppliers need to keep on their toes and constantly improve their software.
Monthly subscription licensing is increasingly becoming the default. Even Microsoft has moved in this direction with its Office 365 product. Other examples of popular SaaS products include Dropbox, Xero, Mailchimp and Salesforce. Our post on software for charities lists SaaS systems that offer a charity discount.
The benefits of a subscription licensing model are:
Hosted in the cloud
A decade or so ago, most software was not hosted 'in the cloud'. Rather, it was hosted either locally (on your own desktop computer or laptop) or on a server (a powerful computer) in your office. For example, you downloaded your own copy of your financial management system onto your computer or you connected to your office server to use this system. This approach is quickly becoming unthinkable, as people want the ability to work anywhere and companies don't want important data stored only on one desktop or laptop that could break at any point.
Now, most software is hosted on enterprise-level server systems somewhere in the world that tap into a huge amount of processing power and allocate this efficiently across lots of different tasks. All laptops, desktops and mobiles do now is connect to these servers with a browser and they can immediately access the software and all the associated data.
With SaaS, centralised cloud-based hosting is all part of the package that you pay for with your monthly subscription.
The benefits of cloud-based software are:
A multi-tenant system is one in which the core code of the software can be accessed and used by lots of people at once while their data remains private. Multi-tenancy works really well when your needs are simple and mainstream. If lots of other people have the same needs, there will be a well-established product out there for you that’s easy and affordable to get started with.
Single-tenant systems provide the core code of the software in isolation so it can be configured in a customised way. This is how open-source software like Wordpress or Drupal works. It’s a great solution if you have complex and unique needs because you can customise things almost indefinitely without affecting anyone else. The downside is that you’ll have to manage updates or pay someone to do so and the added complexity introduced by your customisation may make it quite expensive to maintain. If you want to read more, we have a detailed post on SaaS alternatives to open source website systems like Wordpress.
The benefits of a multi-tenant system are:
How do charities embrace SaaS?
Commissioning complex projects using customised software can quickly get very expensive and leave a legacy that is hard to maintain and pass on to future staff.
Good SaaS products are often simple in nature and built around common requirements that other charities also face. It will be thoroughly tested, well optimised and regularly updated. Moreover, strategic best-practice will often be built-in to the product so that as you begin to you use it your knowledge and understanding will quickly improve.
Finding good SaaS products isn’t always easy. It’s a crowded marketplace and it can be hard to discern which products meet your needs. Here are a few tips on how to quickly narrow down your search for technology solutions.
List your requirements
This may seem obvious but it’s essential to being able to evaluate the claimed features and benefits of a product. How closely does it match up with your requirements?
Talk to someone
Small and large companies alike will often have sales teams with real people willing to talk to you. It can be a lot easier to find out whether a product is right for you if you can talk to an expert directly.
View a demo or start a trial
The difference between a product you’ll love and one that quickly becomes frustrating is found in the details. If you can get hands-on with a demo and have a go at performing common tasks you may be able to get a feel for whether you’re likely to love or hate it. A well-designed product will have your needs in mind and should provide an enjoyable user experience.
Check the support on offer
Good support is essential to a good product. Make sure that the company offers a good support structure so you can quickly troubleshoot any problems, anytime.
Either while you’re evaluating a product or while you’re actively using it, provide feedback to the creators. The company behind the product will be wanting to support their community of clients and they need your feedback if the product is going to improve.