Decode Application as a Service in less than 6 minutes: All you need to know about

While artificial intelligence dominates technology headlines, cloud computing continues to flourish and demonstrate its transformative impact across industries. The cloud revolution isn't just growing – it's accelerating.

Navigate the cloud computing scene

Rising adoption rates and market growth for cloud computing

The Cloud Cost Playbook indicates 94% of enterprises now utilize cloud services, and, according to McKinsey, large enterprises aim to migrate approximately 60% of their environment to the cloud by 2025. This spike in adoption is reflected in market growth, with the global cloud computing market experiencing a remarkable 635% expansion, jump from $24.63 billion in 2010 to $156.4 billion in 2020.

Cloud computing brings financial benefits to businesses

In a research from McKinsey, Forbes Global 2000 companies are projected to generate $3 trillion in value through cloud adoption by 2030. Cloud adoption can generate values for businesses in diverse aspects, from accelerating product development and optimizing IT costs to digitalizing core operations.

Models of cloud computing

With such values cloud computing can generate for a business, you may feel interested in adopting cloud-based tools for your business. Understanding their distinct characteristics and potential impact on business performance is crucial.

The cloud service market primarily operates on three models:

• Software as a Service (SaaS)
• Platform as a Service (PaaS)
• Infrastructure as a Service (IaaS)

In this blog, we'll focus specifically on Application as a Service (AaaS), a specialized subset of SaaS.

Let's start with the fundamentals to understand how this service model can transform your business operations.

What is Application as a Service?

Application as a Service (AaaS) refers to the cloud-based delivery of software applications that enables businesses to access and deploy applications through a cloud platform. Unlike traditional software installation methods, AaaS provides a more flexible and accessible approach to software utilization.

How AaaS works

While traditional software requires installation on individual devices, with AaaS, users can access and deploy specific software applications through the internet. This eliminates the need for local installation.

Popular examples of AaaS that you likely use daily include:

• Google Docs for document creation.
• Spotify for music streaming.
• Grammarly for writing assistance.
• Zoom for video conferencing.

Core characteristics of AaaS

1. Cloud-based hosting and delivery

AaaS operates on a server-hosted philosophy where providers maintain all aspects of the application, including:

• Server management.
• Feature updates.
• Security measures.

Users can access these applications through web browsers or dedicated client apps, enabling global accessibility without geographical restrictions.

2. Subscription-based pricing

AaaS typically employs a subscription model with flexible time span (daily, weekly, monthly, or annual). Depends on the service providers, AaaS service can cost flexibly with:

• Tiered pricing based on usage, features, or user count.
• Free tiers with premium upgrade options for advanced features.

3. Managed backend infrastructure

Service providers handle all infrastructure components, including:

• Server maintenance.
• Storage management.
• Database administration.

Get to know application service providers (ASPs)

The term “application service providers” (ASP) refers to technology businesses that offer applications as a service (sometimes referred to as on-demand software). They can be categorized into four main types:

• Specialist or Functional ASPs: These providers focus on delivering a single, specialized application, aiming to perfecting specific functionalities for their users.
• Vertical Market ASPs: These companies offer comprehensive software suites designed for specific industry sectors, providing tailored solutions for particular market needs.
• Enterprise ASPs: These providers specialize in delivering integrated applications that manage multiple functional areas within a single enterprise.
• Local ASPs: These providers focus on serving small businesses within specific geographical areas, offering various applications with localized support and service.

What’s the difference between SaaS and AaaS?

Application as a Service is often considered a subset or a specific approach within the broader category of Software as a Service (SaaS). Here’s how you can differentiate AaaS and SaaS:

1. Scope of work for the service

• SaaS: Encompasses a wide range of software solutions, from full-scale enterprise tools to consumer apps. They are designed to work together seamlessly.
• AaaS: Focuses on delivering individual, specific applications for a specific task or function rather than a broad platform or suite of tools.

Example:

• SaaS might offer a full suite of business solutions (e.g., Microsoft 365 for email, spreadsheets, and presentations).
• AaaS might focus on one specific app within that suite, like Google Docs for document editing.

2. Target user and usage

• SaaS: Often targeted at businesses and enterprises that need multiple functionalities in one platform.
• AaaS: Can cater to both individual consumers and businesses, focusing on a single application’s usability.

3. Deployment complexity:

• SaaS: May require some setup, configuration, or integration with other systems (e.g., integrating Salesforce with your CRM or ERP systems).
• AaaS: Typically simple to use, often requiring minimal or no setup, since it focuses on a specific use case.

The advantages & limitations of Application as a Service

The advantages of Application as a Service

Enhanced data security

AaaS ensures data protection by storing sensitive information on secure servers rather than local devices. This ensures data remains protected even if devices are lost or stolen, while providing enterprise-grade security protocols and automated backups.

Boost business efficiency

The service automates tasks like user provisioning, account management, and application lifecycle management. This automation reduces manual workload, minimizes errors, and accelerates business processes.

Reduce infrastructure overhead

As AaaS providers handle updates and system maintenance, business can save resources invested in hosting locally installed applications. Hosting on major public clouds also brings added benefits like scalability, high availability, and global access with minimal effort.

Optimize resource allocation

AaaS frees up business valuable resources by:

• Reducing IT staff workload.
• Lowering administrative costs.
• Accelerating time-to-market for new initiatives.

The limitations of Application as a Service

Weak performance under high traffic

AaaS platforms can face challenges with high user traffic volumes. While solutions like load balancing exist, implementing these advanced features often leads to:

• Increased costs for both providers and users.
• Potential service disruptions during peak times.
• Higher bandwidth requirements.

Limited customization options

Standard AaaS solutions may not fully address unique business requirements:

• Pre-configured features that can't be modified.
• Restricted ability to adapt to specific workflows.
• Standardized interfaces that may not align with company preferences.

Cumulative subscriptions cost

While AaaS eliminates upfront costs, ongoing subscription fees can add up over time, potentially making it more expensive than one-time purchases for some users. Also, there are additional charges for premium features or increased usage.

Compatibility challenges

Despite supporting major platforms, business users may encounter:

• Integration issues with legacy systems.
• Limited functionality on certain devices.
• Compatibility problems with older operating systems.

Key Takeaways: Application as a Service (AaaS)

1. What is AaaS?

Application as a Service delivers specific software applications via the cloud, allowing businesses and individuals to access and deploy them without local installations.

2. How Does AaaS Work?

AaaS functions through server-hosted infrastructure, enabling users to access applications through web browsers or dedicated apps, often on a subscription basis.

3. SaaS vs. AaaS: How they are different?

While both are cloud-based, SaaS offers a broad suite of tools, whereas AaaS focuses on delivering individual applications for specific tasks.

4. Advantages of AaaS

• Enhanced data security with server-side storage.
• Boosted productivity through automation and resource optimization.
• Cost savings and scalability by eliminating the need for local app hosting.

5. Limitations of AaaS

• May require high availability features like load balancing, increasing costs.
• Limited customization options for specific business needs.
• Subscription fees can accumulate over time.
• Compatibility issues may arise with certain devices or older systems.