SaaS or not: bringing clarity to the confusion around cloud software

Ask these 10 questions to find out if the solution is truly SaaS:

SaaS or not questionnaire

Demand is growing among financial institutions like rural banks, microfinance banks (MFBs)  and microfinance institutions (MFIs) for Software-as-a-Service (SaaS) core banking software – and with good reason. SaaS gives you near-instant access to affordable solutions that allow you to run your business more efficiently and effectively.

Yet not every solution being sold as SaaS is a true SaaS solution – some are actually hosted applications. SaaS offers huge benefits to MFIs and rural banks – but before you buy, make sure you are buying a true SaaS offering.

Cloud versus SaaS

The terms cloud and SaaS are often used interchangeably, but they don’t have the same meaning.

Cloud computing refers to a broad range of technology services provided across an Internet connection, including SaaS, Platform-as-a-Service (PaaS) and Infrastructure-as-a-Service (IaaS). Services that reside ‘in the cloud’ are hosted in a cloud service provider’s data centre and accessed from a browser on an end-user’s computer or mobile device.

There is no software installed on the user’s device; the data, the application and the processing all reside in the service provider’s data centre. Some examples of public cloud service providers include Amazon Web Services, Microsoft Azure, and Google. Some larger companies run their own ‘private’ clouds or pay a service provider to offer them access to a dedicated private cloud rather than sharing it with multiple ‘tenants’.

Lower cost, better data security

The cloud frees you from installing and managing your own networks, servers, operating systems, storage and software—reducing your upfront capital costs and eliminating the need to hire specialist IT skills. Because cloud providers share the costs of their infrastructure across multiple customers they can offer you far lower operating costs than you could achieve when running your own software.

Cloud providers also have the skills and infrastructure to deliver better security and uptime than most mid-sized companies can attain when running their own IT environments. Another benefit of the cloud is that you can access your data and applications from nearly any mobile device or a computer,as long as you have access to the Internet.

Less maintenance, always up-to-date software

SaaS or “Software-as-a-Service” is a cloud-based model of software usage where you access an application or software program that resides in the cloud across the Internet. You will usually pay a monthly, quarterly or annual subscription, but some services are free or paid for per-use. Pipedrive, Microsoft Office 365, and Oradian are examples of cloud service providers offering SaaS.

You will not install any software on your own devices. Your SaaS provider will manage, maintain and update the software (and the associated database, operating system, storage and servers) in its own data centre.

The provider will provision a secure, virtual database for your data in the background to keep your data confidential. Your data is safe and you benefit from the lower costs your vendor achieves from sharing infrastructure across its client base.

Hosted Software

There are many vendors that are selling hosted software, yet claiming that they offer a SaaS solution. In this case, you may still need to install software on your end devices to use the application; the only difference is your software provider (often through a third-party) hosts the database and/or the server software on your behalf.

Often, the provider will build individual instances of software, databases and hardware for each of its customers. A hosted solution may require that you install a ‘thin client’ such as Citrix on your devices to use it. It may also require you to actually own the software licence (and licences for databases), in addition to paying for the hosting costs.

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