The term "SaaS (Software as a Service)" is now unavoidable in the modern business world. According to Tech Touch Co., Ltd.'s "Survey on the Actual Use of SaaS by Large Companies (2023) ," 74.7% of large companies have introduced SaaS.
Because it is so widespread, there are many cases where people are using SaaS without even knowing it. For example, services such as Gmail, Zoom, and Netflix are indispensable in our lives. However, some people may be wondering, "What is SaaS anyway?", "What are the benefits?", and "Is it possible for your company to provide SaaS?"
If you think about it, about 30% of large companies have not yet introduced SaaS, and if you include small and medium-sized companies, the number will be even higher. In this article, we will explain in an easy-to-understand way what "SaaS" is and why it is rapidly gaining importance in the modern business environment.
What is SaaS and how do you pronounce it?
SaaS (Software as a Service) is a software service provided via the Internet. Users do not install software on their computers, but access it online through a web browser thailand b2b leads or app and use the service on a subscription basis.
To put it more simply, it is a subscription-based software service available over the internet.
They are sometimes called "apps," which is also correct, because app is short for "software application."
Some people may think that SaaS is similar to ASP services. SaaS is basically an evolution of ASP. The business model itself has been around for a long time, but with the advancement of technology, the model that evolved from ASP services was defined as SaaS in the 2000s, and each vendor began to use the term "SaaS".
SaaS offers a wide variety of services for both BtoC (general consumers) and BtoB (businesses).
BtoC SaaS examples: Zoom, Netflix, Amazon Prime, G-suite, etc.
BtoB SaaS examples: SaaS in the following areas
Customer Relationship Management (CRM)
Human Resource Management (HRM)
Marketing Automation (MA)
Customer Support (Help Desk)
Office Software
Communications Software
Accounting software
Task Management Software
CAD software
Content management (CMS), etc.
SaaS offers a wide variety of services
History of the SaaS Industry
Young people today who have been using SaaS from the beginning may not understand this, but in the past, it was common for software to be either developed in-house or purchased by paying expensive license fees.
For example, if a company develops a system in-house (called on-premise), it will cost a lot of money (hundreds to tens of millions of yen).Another disadvantage is that it cannot be used immediately because it takes a long time to customize and implement.
However, spending a lot of money does not necessarily guarantee you will get the best system , and you often end up with results that are " not what I expected... ", or even " I'm going to sue you! "
Even after completion, we still needed in-house IT personnel to operate it, and it would cost a lot of money to build and operate it. Because we invested a large budget in the construction, we needed to continue using it for a long time even if we were not satisfied with the results.
However, with the evolution of technology and the emergence of SaaS, it is now possible to use software anytime, anywhere, at low cost. Because SaaS is a subscription service, if it doesn't suit your company, you can switch to a different service midway.
Of course, it took a long time for software to become so convenient. Below is a brief history of the evolution of software technology.
[1960s]
This was the era dominated by mainframe computers, such as those from IBM. Services called time-sharing and utility computing allowed multiple users to use software simultaneously.
[1990s]
As the Internet began to spread, a type of computing called ASP (Application Service Provider) appeared. The concept was similar to today's SaaS. However, the Internet environment was not as fast as it is today, and it did not become explosively popular.
[2000s]
ASP evolved and became known as "Software as a Service." SaaS is essentially an extension of the ASP model.
Its features include the provision of functions that users can freely customize, a multi-tenant architecture in which multiple users share the same application, and the realization of a wide range of collaboration through web services. With the increase in Internet speeds, SaaS has begun to spread rapidly.
[2010s]
Unicorn companies such as Salesforce.com, Zurora, and HubSpot appear one after another, mainly in the United States, and the number of SaaS vendors increases.
In the early 2010s, major software vendors such as Adobe, Microsoft, SAP, and Oracle, which had previously focused on on-premise solutions, began to fully shift to the SaaS market. As the industry expanded, competition also intensified.
Below is the market share of enterprise SaaS in Q1 2019. First place was Microsoft, second place was Salesforce.com, and third place was SAP Oracle.
