Software as a Service (SaaS) is a product licensing, delivery, and management model that empowers software solution accessibility, scalability, collaboration, and security without consuming in-house IT resources – unlike traditional on-premises solutions. In many instances, SaaS also creates new capabilities and functionality to existing software.
SaaS has been around for nearly two decades, but more recently adoption has accelerated to become standard across all industries and most business functions. For example, SaaS represents over 80 percent of customer relationship management (CRM) and over 70 percent of human capital management (HCM) software solutions.
Where SaaS has not been prevalent, until recent years, is in manufacturing and industrial software. Programs like computer-aided design (CAD) and product lifecycle management (PLM), which are the backbone of product development, have been slow to make the transition to SaaS. This, however, is changing. We are seeing an inflection point in technology, attitudes, and availability toward manufacturing-focused SaaS solutions. In recognition of this shift, PTC has been making consistent efforts to become the leader in SaaS for industrial applications.
Enterprise SaaS delivers a powerful software solution at the scale and complexity necessary to serve a large and global businesses. It pairs functionality with flexibility. As a cloud-based service, the software is accessible regardless of location, delivers increased security, and can scale (up or down) based on the needs of the organization. To serve large organizations, enterprise SaaS typically has different permission levels so separate roles and functions can leverage the tool and its data in relevant ways.
SaaS has three critical elements that differentiate it from other types of software licensing models. Those elements define how the software is licensed, deployed, and most importantly, architected.
Licensing model: Customers pay to access the software on a subscription, often monthly or annually.
Deployment: The software is owned, delivered, and managed in the cloud and by a third-party.
Architecture: The software is uniquely designed to deliver new value through multi-tenancy and non-relational databases.
SaaS is most likely part of your everyday life. Here are a few common examples:
Microsoft 365, Slack, Salesforce, Workday, Oracle Cloud Applications, HubSpot
Most streaming services, like Netflix, Disney+, Apple TV, Prime Video, YouTubeTV, and online video games, like World of Warcraft.
Apple iCloud, Gmail, DropBox, DocuSign
Choosing enterprise SaaS solutions yields both strategic and practical advantages. Here’s how we see them at PTC:
Infrastructure as a Service (IaaS)
Infrastructure as a Service (IaaS) is a type of cloud computing that delivers computing resources over the internet. For many SaaS, IaaS is included in the subscription fee, so customers don’t need to worry about the computer power, storage, and networking resources. Well-known IaaS vendors include Amazon Web Services (AWS) and Microsoft Azure.
Platform as a Service (PaaS)
Platform as a Service (PaaS) takes IaaS one step further where a third-party vendor delivers not only the computer power, but also development tools, database management, and business analytics for customers. Essentially, it supports the web application lifecycle from build to test to deploy to scale. Well-known PaaS vendors include Amazon Web Services, Microsoft Azure, Salesforce Platform, Google App Engine.
Everything as a Service (XaaS)
Everything as a Service (XaaS)—or sometimes anything-as-a-service—describes an overarching trend where services and applications can be accessed on the Internet. The type of “service” runs the gamut from artificial intelligence to database management, or a total package of cloud computing services. Many companies are using digital transformation to unlock new service opportunities that deliver more (and unique) value to customers.
Our latest research offers a glimpse into the evolving workplace trends driving adoption of SaaS technologies.
SaaS has become a business essential: Research estimates 85 percent of business software will be SaaS products by 2025. The reasons why are tied to its unique benefits and current work trends. Software like Microsoft Office 365, Salesforce, and GoogleApps match the needs of a modern business: fast, easy collaboration, always-on availability, and secure access.
Industrial software, like CAD and PLM, have been laggards in the transition toward SaaS but are now accelerating toward that future. Not only are companies realizing they need the benefits and flexibility of SaaS to compete in a fast-evolving marketplace, but there are also powerful cloud computing options available to support the large processing need that comes with product development.
PTC is leading the way as product development software moves toward SaaS. Many of our products are already available as SaaS and cloud-native offerings, and we are aggressively working to deliver SaaS solutions for our entire technology portfolio.
PTC has made considerable progress on the execution of our SaaS strategy in recent years. First with the acquisition of Onshape and its Atlas foundation, then with Arena, the leading cloud-native PLM.
Efforts have picked up speed with the availability of SaaS solutions, like Vuforia, Windchill+, Creo+ and Kepware+, as well as the acquisition of two complementary SaaS solutions to round out our portfolio: Codebeamer, a SaaS-based application lifecycle management (ALM) platform, and ServiceMax, the leading SaaS field service management provider.
With a focus on delivering a consistently great experience to our customers across our portfolio of products, PTC’s technologies will be made available via SaaS in a nearly seamless transition. Along the way, customers will be able to take advantage of the benefits of SaaS through real-time collaboration, incremental product and feature deployments, and a lower cost of ownership.
SaaS is the delivery method of choice for enterprise solutions. Gartner data shows software and SaaS as the fastest-growing segment in IT in 2022 and anticipated 11.8% growth in 2023, far outpacing any other IT spending category.
SaaS is uniquely suited to meets the needs of a changing workforce that includes global and remote employees, who can all be connected through powerful software. It supports stronger communication and greater visibility across teams, as well as delivering the most innovative, up-to-date software functions (including improved cybersecurity). A recent survey shows 79% consider SaaS as an important part of digital transformation. For manufacturing and industrial software, which has been slower to transition to SaaS, the tide is shifting. The same survey found more than half would consider SaaS solutions for CAD and PLM.
B2B SaaS is a more general term for software designed to support businesses. Enterprise SaaS is specific to software designed for large, global organizations. As we described above, enterprise SaaS solutions have the scale and complexity to meet the needs of a larger business with more employees; things like role-specific permissions and greater computing power.
All PTC software is sold on a subscription basis and many of PTC offerings are available in the cloud, including Vuforia, ThingWorx, and Windchill, which was the industry’s first web-based PLM solution.
Over the past few years, PTC has been steadily working toward transitioning our product portfolio to include SaaS offerings. Within PTC’s SaaS portfolio is Onshape – a highly differentiated, cloud-native product development solution that enables companies to dramatically transform their product development processes – and Arena, the leader in cloud–native PLM and QMS. Leveraging cloud-native technology, Onshape and Arena streamline enterprise collaboration between dispersed product teams and supply chains.
Newer SaaS additions to PTC include Codebeamer and ServiceMax, as well as Windchill+ and Kepware+.
As a leader in SaaS for industrial applications, PTC plans to introduce additional “Plus” products built on its Atlas SaaS platform in the coming years.
PTC Atlas is our foundational SaaS technology. Atlas supports the needs of modern work: flexible collaboration between colleagues, faster innovation for your products or processes, and secure and scalable digital transformation solutions, all at a lower cost of ownership.
It delivers a powerful set of core services that can be used to facilitate many SaaS applications. These core platform services include user provisioning, data management, data translation, cloud deployment and management tools, analytics services, and many other core elements of modern powerful SaaS applications.
As the technical home of PTC’s SaaS future, Atlas will enable a consistent and improved user experience across our portfolio.
Software-as-a-Service (SaaS) has been an established business model since the 1960s, although it has greatly evolved since then.
Back then, for the average business, computers were too expensive and too large, but the technology was there and developing rapidly. To take advantage, the idea of a "compatible time-sharing system" emerged; businesses could log into a mainframe server and leverage simple applications and storage. It was the first form of SaaS and it continued to be adopted over the next two decades.
As desktop computers became smaller and cheaper, they became and more ubiquitous in the workplace and home. Companies in agreements with early software providers could have new versions of the software mailed to them and manually install it on the office computers. There was a growing challenge though; storage space was limited on these computers and the software took up a lot of that memory.
In the mid-1990s, the World Wide Web changed the world as we know it. Through the internet, companies could access cloud-based solutions to run their business. Core business apps began transitioning to SaaS-based solutions. Ecommerce boomed in the late 90s. With software hosted elsewhere, the storage issue was alleviated.
Salesforce is credited as the first modern pure SaaS company when it debuted in 1999. It was the first company to offer its product as SaaS from the start. Over the next two-plus decades, SaaS has transformed how we work, how we entertain ourselves, and how we communicate.
One area where SaaS has not been prevalent—until fairly recently—is in industrial applications, specifically for product development. The large files and data management necessary for CAD and PLM as well as concerns over intellectual property and security have largely kept that type of software in on-premises configurations. With the rise of cloud computing, and the computing processing power that goes with it, product development software is beginning to make the switch to SaaS.
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