Software as a service – a model for the future

18.04.2016

Nowadays, monthly subscriptions for digital services are a matter of course – for example storage space in a cloud or music streaming services. Instead of purchasing a product individually, a type of subscription is frequently utilised – especially in the digital world. Flexibility is written with a capital F in the 21st century. This is the route that SAP is also pursuing.

When software is purchased normally, most licences are designed so that they may only be installed legally on a single computer. If they are required on several computers or are to be used as a network version, the purchase price becomes considerably more expensive. The purchase of ERP licences is normally associated with relatively high one-off costs, while an annual service rate is also due. The principle of software as a service, or in short SaaS, allows the resultant disadvantages to be avoided.

How does the SaaS principle work?

When providing software as a service, the programs are not installed on individual computers – instead they are used freely via the Internet. This means that the software can be accessed from any computer. In most cases, it is not even necessary to install special software – instead a totally normal web browser (Google Chrome, Mozilla Firefox etc.) is sufficient to access and execute the software fully.

Software as a service saves companies time and money

Especially for small and medium-sized companies, it is often not worthwhile to employ their own IT experts. Instead, they can use external service providers to install, update and maintain their IT, thereby saving time and expense. The provider of SaaS/cloud software issues guarantees for availability in the “lease agreements” of the software, which are nowadays almost a hundred percent owing to the use of redundant systems. The user leases the software and thus pays for the booked time period only.

SaaS is the future of software provision

Thanks to the SaaS principle, the idea behind installing software on an individual workplace computer is becoming ever more a thing of the past, above all in the commercial sector. One of the main reasons for this is the fact that companies are expanding into the entire European or global market. This means that external employees are frequently employed or branches are opened in other countries.

When leasing software as a service, the agreements can be adapted at any time so that external employees and branches can also gain access to the programs and data stored in the cloud, without any need for new installations. What is more, all employees always have access to the most up-to-date data. That boosts efficiency in daily work, while helping to maximise corporate profits at the same time.

SAP Business ByDesign

A good example is the ERP solution SAP Business ByDesign. The SAP software developed for medium-sized companies is available exclusively as a cloud solution. In contrast to conventional ERP solutions, in which individual modules have to be purchased (e.g. for accounting, production or marketing), this solution lets customers use all functions of the software for a monthly flat rate. The customer also invests a low monthly flat rate for each employee to use the software. The amount here is oriented to the functional scope used by the employee in daily business. The licences are booked for a definite period of time and can be adapted flexibly afterwards.

We shall be pleased to help for any questions concerning SAP Business ByDesign.