Software as a service stands for the software that runs on internet or behind a firewall in local area network or on personal computer, this software can be a general application, an ERP, an accounting package etc. Software as a service or SaaS is also popularly known as software on demand. In SaaS, software vendor licenses an application or set of applications in one software or complete software to a customer through a subscription. The software is deployed on internet and customer can access that through a gateway provided by the software vendor to perform his business tasks.
Though SaaS is a nascent industry yet, but it has given companies an option to save exponential investment which they have to make in purchasing, implementing and training of ERP software. Now with advent of SaaS, companies can simply plug in and use the software on a shared platform via internet. It is not that SaaS is beneficial for users only it has given immense advantages to the vendors too. The popularity of ERP SaaS is increasing amongst vendors as they can support multiple clients via one product and one version, this process is called multi-tenancy which also in return gives benefit to the users to scale the ERP software as much as they need and as fast as they need without investing on IT infrastructure and staff.
Amongst other benefits of ERP software as a service is its global availability, though many on premise ERP software can be used outside of the premises but ERP software available as SaaS can be accessed from anywhere and in complete. Troublesome activity of installing, implementing, training and pile up IT infrastructure for on premise ERP software is not required. Deployment is done in minutes compared to months. Practically the most important benefit of ERP software as a service from the client's or user's perspective is frequent upgrades and refinement which he gets regularly. Instead of getting a whole new version which needs time to understand, subtle and regular upgrades are far easy to understand and implement.
Another big benefit companies have received from ERP software as a service is that now they can utilize the big IT budget and staff in more fruitful and profit oriented functions and processes rather than simply using them for troubleshooting and purchasing latest computer systems.
From ERP software's vendor perspective software as a service has resolved the biggest problem of maintaining the huge and bulky software for all of their clients in different industries. ERP SaaS provider owns the domain, the refinements and upgrades are loaded at one single place to make it available to all, which not only saves money but improves quality and versatility of the ERP software. Obsolete IT infrastructure or bad implementation does not raise a question mark on their product's performance. Reliable revenue generation gives freedom to plan strategies for growth. ERP SaaS has made sales equation quite simple by making it proportional to customer relation. Satisfied bunch of subscribers can fetch in new subscribers which is simpler than closing big deals with lot of money and time at stake.