Investment managers rely on software systems for a variety of operational tasks. Data aggregation, accounting, reporting and statement generation, performance, compliance monitoring—the list goes on.
The technology behind these important tasks is constantly evolving. Paper ledgers gave way to computer systems half a century ago and forever changed the way business is done. And the software designed for the powerful machines at every office workstation continues to provide greater automation and sophistication.
Software-as-a-service, often abbreviated as SaaS, is a broad term for an innovative new type of software. SaaS is web-based, meaning that it’s accessed via a web browser, rather than hosted on the users’ computer.
Even if you’ve never heard the term “SaaS,” you’ve likely already used and benefited from it. If you log in to your email account through a web browser, you’ve used SaaS. If you have streamed movies on Netflix, or maintain a LinkedIn account, you’ve used SaaS. Perhaps you even rely on a SaaS vendor for daily work-related tasks.
There are some key characteristics that differentiate SaaS from the installed software solutions that have been prominent during the previous few decades.
Installed software is difficult to keep up-to-speed as the needs of its users evolve. To add functionality, updates and new versions must be built and reinstalled, which is costly and time-consuming.
SaaS, on the other hand, can be updated frequently and seamlessly. Because the software is hosted on the SaaS vendor’s own servers, and then accessed by users via the web, new functionality can be built, tested, and released at any time, and is available to users as soon as its deployed.
For this reason, best-in-class SaaS solutions are an appreciating asset—their relevance and worth only grow over time.
True SaaS solutions represent a full paradigm shift in technology. Best-in-class SaaS solutions provide:
To learn more about how software technology is changing, and what those changes mean for investment managers and their clients, read Clearwater’s white paper, The Evolution of Software.