SaaS Migration: Why You Should and How to Do It

Natalie Gagliordi | Content Strategist | March 16, 2023

As businesses accelerate IT modernization projects to minimize risk and cut costs, cloud computing and the as-a-service economy continue to gain momentum. Software as a service (SaaS) is the most widely adopted of the cloud computing segments. Organizations using SaaS avoid the up-front cost and complexity of owning and maintaining their own applications while knowing they’re using the most current version of the software with the newest capabilities. SaaS now delivers core business software that’s used to run operations for many of the world’s largest companies. Understanding what SaaS migration is, and why and how to do it, is the first step in deciding if it’s the right choice for your business.

What Is SaaS?

Software as a service is a cloud-based software licensing and distribution model in which software and applications are made available via the internet on a pay-as-you-go basis. SaaS replaces the traditional on-premises software model where a customer pays once for a license, plus any fees for maintenance and updates, and runs it themselves. SaaS providers develop, host, and maintain the cloud application and manage the hardware, servers, databases, and code required to deliver it. Software as a service is one of the three main categories of cloud computing, along with infrastructure as a service (IaaS) and platform as a service (PaaS), and it delivers applications for critical business functions such as ERP, human capital management (HCM), marketing, supply chain operations, and more.

SaaS has existed for decades, but it’s now the preferred way for companies to purchase and use software. Although many catalysts have driven this shift, businesses favoring OpEx over CapEx, teams wanting to always have up-to-date technological capabilities, employees having pervasive internet access, and people expecting to have mobile access to their business applications have all played a major role in making SaaS the best option for many businesses—both technically and financially.

IaaS vs. PaaS vs. SaaS

  • Infrastructure as a service refers to cloud system infrastructure services that can be rented from a service provider, such as servers, storage, and networking. These elements are the fundamental building blocks of cloud computing. IaaS is typically used by companies that want to build applications from the ground up, that have on-premises apps they want to lift and shift unchanged to the cloud, or that want to control most aspects of their infrastructure internally.
  • Platform as a service refers to the underlying storage, networking, and virtualization used in cloud computing, as well as the tools and software—such as middleware, database management, operating systems, and development tools—that developers need to build applications.
  • Software as a service is the delivery of cloud applications as a service, in which end users access software and applications via a web browser or app. SaaS applications are often bought on a subscription or per-user basis.

Key Differences

  • SaaS products are entirely managed by the vendor, unlike PaaS and IaaS products, which require some in-house technical expertise.
  • IaaS requires businesses to have the in-house technical skills to successfully orchestrate services, which is not always the case with SaaS or PaaS, and offers more control over operating systems.
  • Decisions to purchase SaaS are often led or heavily influenced by the leader of the business unit that will use the app—for example, the CFO may choose SaaS accounting applications—whereas IaaS and PaaS strategies tend to be guided by IT.

Key Takeaways

  • SaaS applications are hosted centrally by a cloud provider and are made available via the internet on a pay-as-you-go basis.
  • SaaS lets users access applications and data from anywhere via a browser or mobile app.
  • SaaS provides the ability to react to industry and market fluctuations quickly with access to new features and technology.
  • SaaS reduces the resources required to install, manage, and upgrade software.
  • SaaS enables businesses to move from capital expense spending to operating expense spending that is more predictable.

Why Migrate to SaaS?

With a traditional on-premises architecture, businesses install software on their own computers and servers and in their own data centers. SaaS allows businesses to move to a model where software is hosted centrally by a cloud provider.

By using SaaS, companies can add new capabilities and applications quickly without a major up-front investment in infrastructure and IT staff to set up and deploy the apps and supporting hardware. Migrating to a SaaS business model also eliminates the need to purchase bulk software licenses, letting organizations pay for services via a monthly subscription fee and thus reducing the up-front cost of a deployment. SaaS spares companies from the dreaded software upgrade cycle, where they have to decide whether to do a costly and complicated upgrade to get the latest version’s new features. Instead, cloud providers deliver the software’s new capabilities and latest security updates online at regular intervals.

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Benefits of SaaS Migration

8 SaaS Migration Benefits: Speed of deployment, Cost savings, Security, Scalability, Reliability, Ease of operation, Focus on IT innovation, New features faster
The main benefits of SaaS migration include cost savings, scalability, speed of deployment, and reliability.

SaaS provides numerous advantages to companies by greatly reducing the resources required to install, manage, and upgrade software. SaaS also lets app users access applications and data from anywhere.

1. Cost savings
SaaS involves third-party providers developing, hosting, maintaining, and supporting software with lower initial up-front costs. SaaS also enables businesses to move from capital expense spending on infrastructure to operating expense spending through subscriptions, which is more predictable.

2. Speed of deployment
Conventional on-premises deployments require setting up data center hardware and customizing the software to meet a long list of business requirements, so software users don’t see the system for many months. With SaaS, industry best practices are built in and users only need a browser to access the application, so teams can see the system working in days or weeks. That means faster adoption.

3. Security
Cloud hosting services are designed to address privacy demands and help safeguard sensitive data. Cloud providers can invest in expertise and automation to help them stay up to date on security threats, trends, and the latest vulnerability patches.

4. Scalability
SaaS platforms offer the ability to scale usage up and down based on the demands of the business.

5. Reliability
Under the SaaS model, the service provider is responsible for maintenance, operations, and business continuity, and service level agreements help set expectations for continuity of service.

6. Ease of operation
By choosing SaaS, organizations don’t have to install and run applications in their own environments or data centers since users generally access SaaS through their browsers or a mobile app.

7. Greater focus on IT innovation
With SaaS, businesses no longer need to invest in extensive data center hardware and networking gear, and IT teams don’t have to spend their time managing on-premises software and infrastructure. Instead, IT talent can focus on process improvements and technology innovation.

8. New features faster
With SaaS software’s steady update cycle, businesses can incorporate new features and upgrades into their operations more quickly, helping them embrace the latest capabilities and respond faster to market shifts.

Challenges of SaaS Migration

The transition to SaaS can pose certain challenges. Moving data can be a slow process that requires a lot of bandwidth and resources, but with careful planning and preparedness, businesses can ensure the process is smooth.

6 Challenges of SaaS Migration: Transition costs, Interoperability, Culture shift, Dependable connectivity, Vendor lock-in, Security planning
The top challenges of transitioning to SaaS are interoperability, vendor lock-in, cost, a shift in culture, security planning, and dependable connectivity.

1. Transition costs
While the SaaS model generally helps businesses save money over time, there are costs associated with migrating data and processes to a new application and training staff to learn that new application.

2. Interoperability
Depending on what legacy systems are in place and what cloud apps a business adopts, it might be difficult to integrate SaaS with existing tools.

3. Culture shift
SaaS implies a reliance on a cloud provider to maintain dependable software and infrastructure. IT teams can struggle with this shift in responsibilities if organizations don’t adequately invest in change management to help them prepare for a SaaS migration.

4. Dependable connectivity
Users access SaaS via browsers or mobile apps, so they need reliable internet access. SaaS might not meet the needs of functions that require extremely low latency and a fast response.

5. Vendor lock-in
Businesses tend to stick with the same cloud provider they used during their initial migration, so they should take care to choose a trusted, stable provider that can be their technology partner for the long term.

6. Security planning
Businesses new to cloud computing and SaaS need to establish sound data security policies to protect critical data. Businesses are still responsible for their own security policies, configurations, and assessments. They need to be clear with cloud providers about who does what.

SaaS Migration Models

SaaS migration is typically very specific to a business and is dictated by that business’s priorities. Once those business priorities are established, the exact SaaS migration path becomes an exercise in prioritization. Regardless of a company’s size and complexity, the goal is always to minimize the disruption, risks, and time it takes to move from one platform to another.

A couple of key terms to keep in mind when considering SaaS migration models are single tenant and multitenant. Single tenancy provides each customer with a dedicated software instance running on infrastructure that isn’t shared with other users. Multitenancy uses a shared infrastructure to provide multiple customers with access to the SaaS application.

1. Siloed migration model
This is a single-tenant migration model where an organization implementing SaaS uses a dedicated server or infrastructure for their product or service. This model is ideal for businesses that want to avoid sharing infrastructure with other SaaS users and want maximum control over their data, including where it’s located.

2. Layered migration model
In this model, systems are migrated to SaaS incrementally, with components and capabilities moving onto the new architecture service by service. This model lets companies start off small and slowly move to a multitenant model.

3. Data migration model
This model involves transferring all the data at once from on-premises infrastructure to a cloud native infrastructure and can combine both single-tenant and multitenant migration strategies. A major advantage is that your data won’t straddle operating models, and you can shut down more of your on-premises facility—maybe even all of it.

4. Parallel migration model
In this model, a company runs the same process in two systems and compares the results. The most common reason to do this is for statutory or regulatory compliance. The best example is software used for the financial consolidation and close of a publicly held company. The company may want to compare the consolidated outputs from the old on-premises system to those from the new SaaS platform for a quarter to make sure the new system is generating accurate results before publishing them.

5 Steps in the SaaS Migration Process

SaaS migration requires careful planning, but even the most-prepared businesses can find that the steps in a migration process don’t always happen sequentially. The main goal is to minimize the turmoil from migration by using planning, analysis, and mitigation strategies to deal with the changes in the business.

5 Steps in the SaaS Migration Process -- 1. Road mapping: How much is moving to Saas? 2. Design: What's your architecture and integration strategy? 3. Change management: How do you help teams adopt new apps and processes 4. Testing: How will you check that you're ready to move? 5. Data migration: Do this alone or bring in experts
When transitioning to SaaS, there are five key steps to complete: road mapping, design, change management, testing, and data migration.

1. Road mapping
Assess the scope of work by evaluating the existing architecture and application capabilities, and build a roadmap using research, analysis, and strategic planning. This stage helps businesses estimate the amount of work required.

2. Design
This stage aligns closely with the road mapping stage. During this stage, businesses determine whether they need to completely redesign their existing architecture, database, and codebase. Integration strategy is important here. The design goal should be to minimize customizations to the SaaS application—to get teams to adopt the built-in best practices by changing their processes, not changing the app to fit old processes.

3. Change management
The change management stage should span the entire migration process to increase the adoption of new systems through training and feedback loops. This step can make or break a SaaS migration.

4. Testing
This is when applications, integrations, and systems are tested for performance and stability to ensure a smooth migration process.

5. Data migration
Once analysis and planning are complete, it’s on to implementation and deployment.

How to Tell You’re Ready for SaaS

Organizations are ready for SaaS if they want to run their business processes using industry best practices and access the latest capabilities and features. With SaaS, industry best practices are built into the applications. That means most organizations will need to change their work routines to use those best practices—unlike in the old software model, where organizations would customize software to fit their unique approach to billing, HR, sales management, and so on. Related to this, SaaS providers constantly add new features to their apps. Some cloud providers deliver new capabilities as often as quarterly, and updates are delivered online via a browser so no upgrade is needed on the customer’s end. Having employees use the most-effective apps and newest capabilities can improve productivity, which leads to cost savings and ultimately higher profit.

Businesses that no longer want to be responsible for application upgrades and maintenance are also prime candidates for SaaS migration. SaaS lets an organization’s technology pros spend more time on innovation, such as applying machine learning to new areas of the business or finding additional opportunities for increased automation.

Modernize Your Business with SaaS

Ultimately, organizations will choose to migrate to SaaS if their conventional on-premises approach no longer supports their business goals. And, taking capabilities, cost, and security into consideration, more and more companies are recognizing SaaS migration as a better way to accomplish their goals.

Once you’ve determined that SaaS migration is right for your business, it’s time to select a cloud vendor that can meet your needs. Oracle Fusion Cloud Applications Suite is a complete suite of SaaS applications that provide built-in industry best practices for key business functions, including finance, human resources, supply chain operations, and sales and marketing. These applications help organizations improve performance, lower IT costs, and drive better results. Oracle releases updates for its cloud applications every quarter, giving companies access to new functionality and features and keeping them on the most up-to-date technology. And having ERP and HCM in the cloud makes it much easier to offer remote access to tools such as expense reporting and benefits portals via mobile apps.

SaaS Migration FAQs

What are the three main phases to a cloud migration?

The three main phases are prepare, plan, and migrate.

What are the seven Rs in cloud migration?

The seven common migration strategies for moving applications to the cloud are refactor, replatform, repurchase, rehost, relocate, retain, and retire.

What is a SaaS deployment model?

A SaaS deployment model refers to the delivery of software on a subscription or per-user basis, as opposed to the traditional on-premises model of software deployment.

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