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Understanding the eCommerce Platform: Part Two | SaaS

January 21, 2016

In the first part of this series we talked about the different ways B2B commerce applications are being delivered today, the different application models available and the trade-offs associated with them.

Now we want to look more specifically at the trade-offs in these application delivery models and provide some insight into why businesses choose one model over another.  

SaaS

SaaS, or software-as-a-service, bundles all three elements into a single deliverable via a web browser.

Users get pre-defined interfaces to configure functionality based on the underlying data model and business logic.  Infrastructure is inherent in the service, so users don’t have to manage any of the servers, storage or network components associated with the application.

Pros:

  • Speed of Implementation: Very quick to implement since all elements are packaged together and delivered from the cloud.
  • No development required: All user interfaces and are fully developed so non-developers can configure application functions to achieve desired outcomes within the capabilities of the app.
  • Bundled infrastructure:  Since the infrastructure is bundled, it is optimized to perform and scale with the application.  It is also managed by the SaaS provider, so there is no need to have those resources on staff.
  • Lower upfront costs:  Relative to code or “on-premise” applications, SaaS typically has lower upfront costs since you don’t have to buy software licenses and hardware to get started.

Cons:

  • Limited customization:  Since SaaS applications are fully developed, true customization is not available.  Modifications to the user interfaces are accommodated through configuration options and controls in the administration capabilities of the application.  In most SaaS applications, the “theme” or look-and-feel of the application can be controlled via admin but the underlying functionality of the application cannot be modified by anyone except the SaaS company.
  • Vertical specificity:  In B2B, SaaS applications tend to be very specific to verticals.  Since the user interfaces of SaaS applications are not customizable, the applications tend to evolve to support vertically specific B2B workflows, supply chain structures, and nomenclature.  So, while they can be excellent at supporting a given vertical or function, they may not transfer well or intuitively support processes they were not specifically designed for.
  • Roadmap control:  Since outside developers cannot make changes to the underlying code, SaaS application roadmaps are controlled by the providers.

Based on the points above, businesses choose SaaS applications when they require vertically specific functionality that is fast to implement and easy to run without technical resources on staff.

They enjoy the ease of implementation and lower upfront expense SaaS provides versus “on-premise” applications and they are willing to trade-off high degrees of customization and roadmap control for ease of use and speed.

Stay tuned for the next post, we’ll take a look at the pros and cons of “code” or “on-premise” applications!