Many of the advantages of SaaS over traditional software deployment models fall into the following categories: collaboration, mobility, innovation, scalability, and cost. These benefits have driven significant adoption of SaaS since its emergence as a competitive deployment model for enterprise software in the mid 2000s. Per a recent press release from Gartner, SaaS is the largest component of worldwide public cloud spend and Gartner estimates that SaaS revenue will surpass $104 billion this year.
This explosion of SaaS adoption over the past decade has largely occurred outside of engineering organizations. However, with the ever-increasing sophistication of SaaS technology, we are now at a tipping point where SaaS computer-aided design (CAD) and product lifecycle management (PLM) applications can match the traditional capabilities of their on-premises counterparts. Because of this, it is more important now than ever for engineering organization leaders to understand the unique benefits of SaaS.
Mobility is the most straightforward benefit of SaaS, but until recently was often overlooked or otherwise undervalued. With the disruption of normal office operations due to COVID-19, many organizations now truly understand how powerful an attribute mobility can be. With a SaaS deployment and an internet connection, employees can access their software tools and data from anywhere with the device of their choosing: no need to install software, no need to access a virtual private network (VPN). This advantage of SaaS will be important for many companies to maintain efficiency during the pandemic and fundamental for companies who wish to enable a more distributed/flexible workforce in the future.
One way that SaaS solutions can benefit collaboration is by employing an architecture called a non-relational database (the same type of architecture used by Google Docs). Just as multiple parties can open and simultaneously edit a Google document, with Onshape multiple design engineers can access and edit CAD geometry in parallel.
The collaborative advantages of SaaS can also be used to streamline value-chain communication. For example, a company using a SaaS PLM system can permit its suppliers and customers curated access to important project data with no need for them to download or install software. Further, this process eliminates the traditional and risky practice of sending CAD files, drawings, and other documents by email, which inevitably leads to an abundance of outdated information on personal hard drives.
The previous two benefits were very much user focused. Here we shift to more organizational benefits of SaaS solutions starting with accelerated innovation: providing customers with faster, easier access to technology improvements. It is very likely that the first advantage of SaaS that organizations will experience is unmatched go-live agility. With SaaS deployments there is no implementation process - the hardware systems, networks, and software are ready to go with the click of a button after which employees can start creating value.
Similarly, updates, upgrades and bug fixes, which traditionally come with their own implementation headaches, are likewise instituted by the vendor without interfering with normal customer operations. These improvements can be made near continuously at no cost other than the price of subscription. This benefit of SaaS solutions upends the traditional practice of weighing the advantage of updates and upgrades against the cost of their implementation. With SaaS, users are always on the latest and greatest version of the software.
Scalability is likely the most referenced advantage of SaaS solutions and comes in many flavors. Administrative scalability is the ability to increase the number of organizations and users with access to the software. The same underlying architecture and deployment model that enables SaaS’s go-live agility also makes it simple to manage or add users and organizations to the subscription.
Elasticity is another term that is often used with reference to SaaS and refers to the scalability of compute power. SaaS solutions can draw on cloud infrastructure to scale hardware needs in real time. The customer's IT department doesn’t have to forecast infrastructure requirements based on company growth estimates and engineers don’t have to worry about sharing high-power computing resources.
Last, but certainly not least, is the cost benefit of SaaS solutions. A typical SaaS subscription may appear to cost more over longer timeframes than a corresponding perpetual software license and maintenance subscription. However, these calculations rarely consider the total cost of ownership associated with owning, running, and upgrading on-premises software. Some of these cost advantages of SaaS have already been alluded to in this blog. For instance, unlike an on-premises deployment there is no infrastructure costs associated with implementation or scaling a SaaS solution. Also, because there are no new versions (the service improves continuously) there are no costs associated with traditional software upgrades, the IT resources to deploy those upgrades, or the opportunity costs of scheduled downtime.
Traditional software products have had decades of research and development to deliver the capabilities that users enjoy today. By using their forerunners as a roadmap, SaaS alternatives are quickly incorporating more and more of the functionality that users have come to expect while also providing the novel benefits explored here. For engineering organizations looking to keep pace with disruptive technologies and business strategies these advantages of SaaS must be incorporated into the calculus of vendor and software selection going forward.
Will Hastings is a research analyst manager on PTC’s Corporate Marketing team providing thought leadership on technologies, trends, markets, and other topics. Previously Will was a senior analyst for ARC Advisory Group, where he conducted PLM and additive manufacturing research. Prior to ARC Advisory Group, Will was a lead mechanical design engineer for product development programs at Sensata Technologies.