Software-as-a-Service (SaaS) is not a novel concept. We’ve seen it, we’ve used it, and in today’s super-connected world, we certainly hear about it all the time. But what exactly is SaaS? What does it look like in smart buildings? And, how does it differ from other building solutions?
What Exactly is SaaS?
Sometimes referred to as "web-based software," "on-demand software," or "hosted software," SaaS is essentially a way of delivering software over the Internet or via the “cloud.” A third-party service provider hosts the application off-site and manages the fundamental aspects of maintaining the software, such as security, support, and performance. Customers don’t need to invest in expensive hardware or IT services to host and maintain the software. Instead, they typically pay a low monthly rate based on the number of users. Anyone who has ever used Google calendar, Salesforce.com, or Microsoft Office 365 has used a SaaS solution.
SaaS and Smart Buildings
While SaaS solutions have been adopted quickly in the consumer electronic world and even on the enterprise level in workplaces, they are still relatively new to the buildings industry. With nearly half of all commercial buildings in the U.S. constructed before 1980 (nearly 40 years ago!), there’s a common misconception that the physical infrastructures of buildings are too arcane to support digital-age technology. However, SaaS is not just for newly constructed buildings. "Legacy" building controls, systems, and communication protocols have come a long way in recent decades and are ripe to integrate with exciting, new SaaS solutions.
So what makes SaaS such a great solution for buildings? Let’s take a look at some of the (many) benefits the SaaS business model can offer—with no hammer required.
With rising rental rates and a constant battle to attract and retain employees, businesses are compelled to provide a superior workplace experience with a smaller staff and thinner wallet. SaaS solutions offer a great way to supplement or improve a building’s offerings with limited resources.
Low CapEx = Lower Barrier to Entry:
SaaS products are typically deployed on monthly, “pay-as-you-go” subscription plans, which means essentially no installation/implementation fee. No matter what department you’re in, it’s much easier to get approval to purchase a low-risk SaaS product than other tools and amenities that require significant capital expenditure upfront.
Lower Total Cost of Ownership (TCO):
Considering all the factors that make up a product’s TCO, all signs point to SaaS as a more economical option— not just upfront, but overall—compared to their on-prem or “hosted” software counterparts and other workplace amenities. With hosted software, for instance, you can expect to shell out a significant sum on both human capital (training, project management, help desk resources, database management) as well as necessary infrastructure (servers, firewalls, security, repairs). As Derek Singleton from Software Advice explains, “The true savings of a SaaS system come from not having to manage your own IT infrastructure to manage hosting, data security, hardware maintenance.” With SaaS, you simply plug and play, leaving the grunt work, maintenance, and all the associated costs with the vendors themselves.
As opposed to their depreciable hard-asset counterparts, SaaS products typically only get better over time. Given that service is quite literally the name of their game, vendors are constantly working on improving their products, fixing bugs, and adding exciting new features and products to their suite of services. And as we know all too well from the red flag constantly hovering over our smartphone App Store, these updates are often provided on a monthly, weekly, or even daily basis...all at no additional cost to the consumer. Compare that to physical infrastructure and equipment, which lose value immediately at installation—“the minute you drive it off the lot”—or hosted software that will run you 25% - 75% of the original cost just to upgrade your license and the benefit is obvious. Upgrades are expensive, updates are not.
Support & Service
Since customers can “pull the plug” at anytime, SaaS companies are only as valuable as the continuous, quality service they provide. What that means is when you purchase a SaaS product to help run or manage your building, you’re also investing in a team of experts to assist with any problems if—and when—they arise. Support teams provide a host of services including on-boarding and training new users, explaining new features, and addressing and solving any issues, remotely, with the product. Some services will even going so far as to diagnose malfunctions in the building itself, such as a broken vent or faulty sensor...now how’s that for support.
Scalable, Accessible, and Flexible
As a result of running completely in the cloud, SaaS products are designed to suit the unique and evolving needs of customers. For one, they are easy to scale, both by scope of deployment (throughout the building) as well as by number of users. To that end, the programs, and controls are easily accessible by all—and only—the appropriate people. Whether that’s a whole suite of employees or only a few members of a facilities team, onboarding a new user to a SaaS program is often as simple as creating a new login. Because there’s no hardware involved, the terms of service can be much more flexible, providing customers the option to modify or add product features as needed.
Secure and Reliable
One of the greatest things about SaaS is reliability. Being hosted off-site means that customers don’t need to worry about system failures, data overload, or even power loss at their site. SaaS vendors manage their services and host the associated data on their own internal systems and are responsible for keeping the programs speedy and secure. Building operators may be concerned about data security or the risk of exposing the system and sensitive company data. However, there are simple and effective measures companies can take to ensure their SaaS products are secure. For example, some vendors use something called a “thin client”, a small, cheap computer that can connect a building management system (BMS) to a SaaS provider without exposing any networks or data to the open internet, keeping private systems safe. Additionally, the process of integrating a building with a SaaS product often leads to inter-departmental conversations between facilities and IT, providing new insights and resulting in greater overall building security.
So what’s the bottom line? Buildings are getting SaaS-y...in a really good way. And while we’ve become accustomed to enterprise SaaS products that that we use in the office, we’re just now scratching the surface of what SaaS can do with the office. From lighting and temperature controls to building operations tools, SaaS provides a cost-effective, secure and scalable way to improve building performance and has become integral to proliferating smart building tech.