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Breaking Down SaaS: The Cloud

In January I started writing about SaaS, and although I mentioned getting into B2B and different industries, I need to backtrack. Understanding the context of everything is too important to brush over. Having been born in 2001, I’ve known nothing but the internet, mobile devices, and the cloud. On one hand, it is great–almost no technology is too hard to use. On the other came a problem–I had no idea where it all came from. Am I embarrassed to admit it? No, just ask anyone my age how a computer actually works. With that in mind, I will address a key component of SaaS: the cloud.


To begin, I have to talk about servers. Servers are really just computers. They store and manipulate data with instructions from software. What makes them different from a computer, as we think of the word, is that there isn’t a screen, a keyboard, or a mouse–basically, they are big boxes, but nonetheless a necessary component of computing. Large databases of companies can’t be stored directly on the hard drive of an employee’s desktop or laptop, nor can the logic (fancy algorithms) behind complex applications. Servers do the heavy lifting with large amounts of memory and storage, so when an employee requests data, or runs an application, their computer’s software calls the server to execute the task. This process is commonly called the client-server model. The burden shifts from the desktop or laptop to the server.

The Web

Before addressing the cloud, I also have to touch on the web which relies on the client-server model. Any web browser: Chrome, Safari, Firefox, is the client which calls a web-server for information. Nobody’s personal computer could contain all of the files found on the web, so by storing the data on servers we can access all of it at any time. The massive, complex, interconnected computer network we know as the internet makes this possible. It is similar to how mobile apps work. Many apps are not stored entirely on smartphones, but rather a smaller portion of them (the client) are downloaded which will call for the rest of their functionality on a server through the internet. The cloud is similar.

The Cloud

In the past, when companies wanted to run big applications, store data, or even have email, they needed their own servers. They bought, stored, and maintained them. If they wanted more computing power, they needed more servers. The spirit of economies of scale applies here. This was, and still can be, a huge cost. As described it would be challenging for small businesses and startups who lack funds. Additionally, we know in hindsight that they were missing out on immense computing power. Why? They were not utilizing a cloud system. With the cloud, companies do not need to purchase their own servers, nor pay to maintain them. Rather they pay to use servers stored in large data centers and benefit from the massive scale at their disposal. As with the web and mobile apps, the cloud uses the internet to deliver services. The sophistication of the internet in turn has a direct impact on the efficiency and scalability of the cloud.


Finally, here is where SaaS enters. Rather than installing an app on the hard drive of a computer, the software can be deployed through the web and hosted on the cloud. That is, the buyer purchases applications made available to them over the internet without needing to worry about their own servers. The seller doesn’t need their own servers either. They can build their app on a cloud provided by companies like Amazon (AWS) or Microsoft (Azure), and then sell the right to use it. What has been the effect? Cost-saving, scalability, ease of deployment, and quicker product development to name just a few.

It is with this understanding of the relationship between applications, servers, the internet, and the cloud that I will move on to more specific benefits of SaaS, how it looks in different industries, and what is happening in the B2B world. I know that before doing this research I had a choppy idea of the subjects covered, and it was my intention to present it as simply and plainly as possible. If before reading you didn’t have a grasp on all of it, I hope you found this helpful and can refer back whenever you need a refresh.

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