How Does Software-as-a-Service Benefit Manufacturers

July 11, 2022
See how software providers are continuing to move towards SaaS models for developing, delivering, and monetizing their work, and how that trend is breaking into the manufacturing space.

Remember when you used to buy a license for Microsoft Office 97, then three years later buy an upgrade for Office 2000, then Office XP? Not anymore! Most users have migrated to Office365 and are paying a yearly subscription for the software, and in return they do not need to worry about individual upgrades. They are always on the latest version of the platform. Most modern software, from Office365 to Facebook to Zoom, has migrated to this software-as-a-service (SaaS) licensing and delivery model.

While business and commercial software has already made the transition to SaaS, these models are just now starting to pick up momentum in the manufacturing world. Adoption has been slower in automation and manufacturing for legitimate reasons: frequent software updates for complex and interconnected systems can introduce significant downtime risks, a reliance on internet connectivity can prove a challenge for industrial networks and IT teams, it can be difficult to balance operational and capital expenses, and storing significant product and manufacturing data in the cloud introduces new security concerns.

Software providers are continuing to move towards SaaS models for developing, delivering, and monetizing their work, and that trend is breaking into the manufacturing space. Many traditional manufacturing software providers are offering SaaS and subscription options, and some new players may not offer classic licensing models at all.

SaaS is not just some scheme to put more money in the pockets of software providers. There is real value to be gained by manufacturers who learn when, where, and how to embrace this new paradigm.

Keeping software up to date is more important now than it has ever been. Not necessarily to get access to all the latest features, but to make sure the software is fully patched and resistant to cybersecurity risks. Most cyberthreats to manufacturers take advantage of known security flaws that have been addressed through patches and software updates. Without SaaS it is the manufacturer’s responsibility to obtain the proper licenses for any software upgrades, maintain service and support agreements with software vendors, and plan and install any patches. In a SaaS model, manufacturers always have access to the latest software and the vendor is responsible for software updates, allowing the manufacturer to focus more on planning and supporting the change. Essentially, SaaS is making it easier for us to do what we should be doing anyways. Planning and supporting these software upgrades is no simple feat, especially in regulated industries like life sciences where change control processes are so important. Sharing the responsibility with a SaaS provider simplifies the process and reduces overall risk.

Another significant benefit of manufacturing software hosted in the cloud and delivered through a SaaS model is simplified infrastructure and scalability. Most manufacturing plants built over the past 40 years have their own industrial data center onsite, where corporate IT teams own and manage the significant server and network infrastructure to run an entire manufacturing operation. This was and still is done out of necessity, as there are some applications where it remains best practice to host on-premises. However, if and where there are opportunities to host applications in the cloud, there may be opportunities for significant cost savings. Cloud-hosting leads to less IT overhead and less physical infrastructure on site that is difficult to procure and maintain. This also makes cloud-hosted SaaS applications easier to scale, especially for multi-site applications.

SaaS and cloud-hosted software are not silver bullets to solve all our manufacturing problems, but they do help us better focus on them. Manufacturers do not need to be in the business of negotiating one-time license costs, managing all aspects of every software upgrade, or procuring and maintaining expensive server infrastructure. Every hour and dollar spent patching software, procuring servers, and installing upgrades is effort we are not spending on continuous improvement programs, training, and optimizing our operations. When we use SaaS applications, we get tangible benefits like up-to-date software and no-hassle hosting, but we also get our time back to focus on what matters most: manufacturing!