The intersection between HR strategy and HR technology


Defining SaaS

systematicHR Avatar

Since I defined Web 2.0 already, I thought I’d also define SaaS for the masses.  Again, this is actually a fairly easy and straightforward technology to put some boundaries around.  First of all, I don’t actually like the moniker “Software as a Service” because it confuses most HR people.  At the core, SaaS does not add any additional “service” that it’s genetic predecessors did (simple hosting of applications in 3rd party data centers).  Regardless of my personal complaints about the name, some SaaS vendors do indeed provide additional services, but I don’t think these services are parts of SaaS, just differentiators between vendors.

So what is SaaS?

  1. Hosted:  First of all, the obvious.  A SaaS application is hosted by someone else – almost always a vendor.  Actually, I can’t think of a single SaaS application that is not hosted by the vendor who sells it.  The whole idea is to generate incremental revenues on a long term basis that are higher than premise based application’s license fees.
  2. Singe codebase:  I know that some vendors call themselves SaaS when they have the ability to host your application separately because you want to do something different than the rest of the vendor’s customers.  This is not SaaS.  To qualify as SaaS, the vendor supports a single codebase across all its customers.  There are exceptions, as the customer base expands and they have to increase the number of servers, vendors may take time to update all the servers.  However, in general, the vendor is supporting a singe codebase, or getting all the servers and customers up to the same codebase.

And to me, that’s all she wrote.  At the very basis of SaaS, there is not a whole lot to it. But you’ll see why I think the “software as a service” can be misleading.  People in HR misread “service” as some sort of additional customer support.  Indeed, a technologist would read it quite differently, and service really just means the provision of the application in a particular manner.

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11 responses to “Defining SaaS”

  1. Syris Avatar

    Nice straightforward definition. You are correct in stating that the single code base is the key to this model. Many vendors make the argument that it is multi-tenancy (of the degree of multi-tenancy) that is the true mark of SaaS vs. a traditional ASP, but the real key is whether or not you maintain a single code base w/o customizing it for individual customers.

  2. systematicHR Avatar

    Agreed. Single codebase allows you to pursue multi-tenency, but the root of the SaaS definition is the codebase, not how you end up hosting all the customers. IMHO.

  3. Charles Koegler Avatar
    Charles Koegler

    Given your assessment of SaaS, ADP is the epitome of SaaS.

    1. ADP delivers ADP owned and maintained solutions that are implemented and hosted by ADP
    2. Providing the same client “configurable” solutions that are being used across many hundreds of clients along with data management services that ensure feeds to and from providers they virtually eliminate client’s IT support
    3. A host of services ranging from Background Checks, Benefits Administration, Call Centers and more; handling HR functions that address Recruitment thru Retirement.

    Having grown from a payroll centric company, they are often overlooked or dismissed by the HR community.

  4. Bryon Abramowitz Avatar

    One critical component of SaaS is the subscription-based license model. You can’t have SaaS with a perpetual license.

  5. […] I came into work a few days later and happened across this blog at the Web site, titled “Defining SaaS.” had an even […]

  6. James | Employee Scheduling Software Avatar

    Ahh.. yes the world of SaaS. Whoever made the second ‘S’ captalized? Anyways, I agree with you on the single codebase, some don’t and try to pass as it is.

  7. daniel Avatar

    Who are your top picks for SaaS HRIS vendors? I’ve heard alot about WorkDay and Successful (especially with their acquisition of InfoHRM). I am particularly interested in the analytics component e.g. headcount, payroll, performance, staffing pipeline reporting.

  8. systematicHR Avatar

    Daniel: While I definitely am not going to go out of my way to name “top HRIS SaaS vendors” I’m going to stick by my philosophy that it’s basically a matter of cultural fit who you should go with. That said, I think you might actually have a hard time finding a SaaS vendor that does all of the above you listed. There may be just a handful that on further research have a few partnerships, or have a couple of gaps.

    I think by “Successful” you meant SuccessFactors?

  9. […] Defining SaaS Systematic HR • Wednesday, July 21, 2010 already, I thought I’d also define SaaS for the masses.  At the core, SaaS does not add any additional “service” that it’s genetic predecessors did (simple hosting of applications in 3rd party data centers).  So what is SaaS ? A SaaS application is hosted by someone else – almost always a vendor.  This is not SaaS.  READ MORE […]

  10. […] (2010) Pages: [cited 2010 August 20] Available from var sourceLinkHandler = function(){ var log = […]

  11. […] to think about this statement about ADP, and have decided that I can’t really abide by it.  I have defined SaaS by two simple parameters: hosted and single code base.  All that means is that the customer does not maintain anything […]