SaaS - what exactly does it mean

SaaS has developed from a service hosting technology and on-demand usage model to the mainstream form of enterprise services today.

SaaS (Software as a Service, software as a service).

1. The evolutionary process can be divided into 4 stages:

  • Terminal equipment: access the centralized host computer room through remote terminals to process or obtain business information and data. This kind of terminal equipment can still be seen in some movies.
  • C/S application: client/server access mode. Access independent servers through desktop clients to process or obtain business information and data. This is an application architecture commonly used by early developers and users in local area networks.
  • Web hosting: Access distributed servers through web hosting to process or obtain business information and data, which is the so-called ASP (Application Service Provider). At this time, forms such as multi-tenancy, application sharing, subscription charging, etc. have emerged, and there is a little prototype of SaaS.
  • Cloud native applications: Through cloud native applications, access software-defined, virtualized servers, which is today's SaaS model.

2. How to understand SaaS:

For the general public, we use an analogy to explain SaaS: In the past, every household needed to dig a well to solve the water problem; later it was changed to centralized water supply, that is, water supply from the water company. Users only need to pay the water bill on time and turn on the faucet. There will be water. This eliminates the process of finding water and drilling wells, and also saves project costs. The business model of water companies has become "water supply as a service".

For software technicians, SaaS is a new application architecture model that introduces concepts such as sharing a single instance, multi-tenancy, permission model, storage model and billing model.
For SaaS service providers, SaaS means a new business model and new business opportunities due to its different delivery model and subscription revenue model from traditional software.

For customers, SaaS is equivalent to outsourcing IT equipment, software and operation and maintenance services to SaaS service providers.

3. Related to SaaS.

Through abstraction and layering, the IT industry created the concept of "everything as a service", also known as XaaS . In addition to PaaS (Platform as a Service, Platform as a Service ) and IaaS (Infrastructure as a Service, Infrastructure as a Service ), SaaS has also derived many "as a service" concepts, such as DaaS ( Data as a Service ), OaaS ( Operations as a Service ), etc.
aaS is equivalent to a virtual server defined by software. SaaS companies generally do not involve IaaS. However , there is still debate whether SaaS companies should develop PaaS . This is mainly because there are still different understandings of the definition of PaaS in the industry.

In the strict sense, PaaS is a service operated by a professional platform service provider. It provides a deployment environment and public tools for SaaS, such as organizational structure, permissions, billing, API, etc. That is, PaaS is a public service.

Therefore, if we strictly follow the definition of PaaS, it is impossible and unnecessary for most SaaS service providers to do PaaS, at least in the early stages of SaaS business. In fact, the technical capabilities and resources required to do PaaS are not possessed by SaaS startups. Because the strength of SaaS service providers lies in business and applications, not platform technology and service capabilities.

In fact, the current domestic understanding of PaaS is not accurate. The so-called PaaS is actually the internal application platform of a SaaS company. It is actually a part of SaaS. In order to facilitate the distinction from a hierarchical concept, it is called application PaaS (Application PaaS, APaaS).

4. Several concepts related to SaaS

When talking about SaaS, we often hear concepts such as ToB, enterprise services, software, PaaS and so on. These concepts are easily confused, so it's worth explaining what they mean and how they relate to each other.

1. ToB

From the perspective of service objects, services can be divided into two categories: ToB, which is for organizations; ToC, which is for individual consumers. In addition, there is the so-called ToG (for government agencies), which we generally count as organization-oriented, that is, treated as ToB.

The scope of ToB is very large, and SaaS is just a category in ToB. There is an inclusive relationship between them, but sometimes these two words are used interchangeably.

2. Enterprise services

Enterprise services are a general term for organization-oriented services. In fact, there are many types and forms of enterprise services, including providing enterprises with services such as IT service outsourcing, human resources, legal services, consulting services, financial and taxation services, corporate training, and even logistics services and corporate cleaning, which are also enterprise services.

SaaS is just one of many enterprise service methods. Enterprise services in the SaaS field refer specifically to services provided to enterprises in the SaaS method, such as SaaS CRM, SaaS finance and taxation, etc.

Although SaaS and enterprise services are often used interchangeably, there is a difference between the two: SaaS represents a way of providing a service; while enterprise services represent the specific content of the service. In other words, SaaS service providers see SaaS, while enterprise customers see services. What SaaS changes is the service method, not the content of the service.

3. Software

Although both software business and SaaS include software, they are two completely different businesses with different business models. In other words, software and SaaS are two different businesses, one sells products and the other sells services.

From the perspective of the industry market, software and SaaS are in a competitive and substitutive relationship, and the software itself is also transforming into SaaS.

4. PaaS

According to the definition of PaaS business model, most PaaS developed by SaaS companies are not PaaS in the true sense. These PaaS are actually SaaS. On the other hand, all SaaS must have the business definable and scalable capabilities of PaaS, which is to compensate for the lack of SaaS personalization capabilities.

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