Are you still wondering if you should choose SaaS (Software as a Service) model for your business? Making use of standard software is quickly becoming a thing of the past, and today, many companies are making this transition to subscription-based services. SaaS is a successful business delivery model which is centrally hosted on a remote cloud network. This model is becoming the go-to for many businesses for a variety of reasons including scalability, flexibility, affordability, and more.
Of course, with the COVID-19 pandemic necessitating more remote work than ever, the demand for the SaaS business model has been gaining huge attention. There are several reasons that can justify why SaaS software business models are required as per the current trends. Firstly, this model enables quick and easier selection and deployment of business applications. It also provides aesthetic and updated features for many business apps to engage the employees and allow them to be more productive.
SaaS is the business model of today, and according to a study, over 85% of businesses are using some kind of SaaS application.
So, what makes the SaaS business model better or worse the traditional software? To get the answer to this question, let’s understand about SaaS business model first:
What is a SaaS business model?
Also known as SaaS revenue model, the SaaS business model is software owned, managed, and supplied remotely by one or more providers. It’s the latest and new model for sales which has eventually replaced the contemporary and old business licenses. This model supports generating revenue from the software which is hosted remotely. SaaS is a subscription-based service which delivers applications over the web.
In other words, the SaaS model can be explained as an end-to-end remote solution that can be efficiently and effectively handled or owned by the provider. The software which is licensed using SaaS model is known as SaaS application. It’s an approach for the app development and software delivery.
Generally, SaaS companies maintain database, software, and servers that enable the product to be used over the internet remotely. Users can use and access the software from any device, and they have to pay a recurring subscription fee to access that software.
The most popular SaaS business models include:
· Customer Resource Management (CRM)
· Enterprise Resource Management (ERP)
· Project management
· Accounting and invoicing
· Web hosting and eCommerce
· Data management
· HR
How does SaaS work as a cloud computing model?
In the SaaS model, the provider offers its clients with network-based access to a single copy of the precise software or application that the provider has built for this kind of distribution. The source code for the application is the same for all the client bases. Whenever the new features or functionalities are enabled, they are distributed automatically to all the clients in the SaaS model.
According to the service level agreement (SLA), the client data for every model can be stored up locally, in the cloud, or the hybrid. Businesses can integrate SaaS applications with other software utilizing diverse APIs. The most common SaaS applications are utilized for crucial business technologies like ERP, CRM, HRM, sales management, financial management, etc. The key providers of the SaaS include Microsoft, SAP, Microsoft, SalesForce, etc.
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Why do businesses adopt SaaS model?
Because, it’s great! The software installed on any device may undergo harmful interactions with any other software or any kind of OS errors. But, in the SaaS business model, users don’t have to install anything on any device as it works on the cloud.
Apart from this, SaaS model is cheaper than any other software. The most popular example of the SaaS model is Adobe. It was a successful licensed software company, but it has made the move to go to the cloud-based model in 2012. Instead of paying the one-time hefty amount for the software, customers now pay monthly fees to access the creative apps available on the cloud.
The best SaaS companies develop on-demand and customized business solutions for HRM, sales and marketing, asset management, financial reporting, customer support, and more. While big players do have their own key advantages of implementing the SaaS model, the small players can also transform their business completely. With SaaS, businesses can get access to powerful tools which enable them to stay ahead without worrying about the costs.
SaaS provides compatibility, accessibility, and greater scalability to businesses. It doesn’t cause any kind of data loss errors due to device failure or other issues.
How to build a cloud based SaaS application?
SaaS application development varies in many ways from the conventional approach to software development. These differences are quite unapproachable to those who are not experienced with the SaaS product concepts. Conventional app developments and cloud-based development have a lot of similarities.
But the foremost difference in building cloud-based applications is the requirement to choose the right service provider. The significant advantage of the cloud solutions is that the subscribers are not required to install any kind of software on devices, and the costs are also not that much higher. However, you have to choose a trustworthy cloud service provider like Office Solutions that can host your SaaS platform for its optimum performance.
Advantages of SaaS business model
Are you still skeptical about switching to SaaS business model? Here are some popular reasons to transition your business’s digital infrastructure to the SaaS model:
1. Ability to manage software versioning- As we all know that SaaS is hosted on a cloud network, so the updates only need to be applied from the provider’s end. You will always be current on the latest software versions, and have all the latest features through periodic incremental updates. All this is built into the subscription fee. As compared to the expensive on-site software upgrade model which requires frequent updates and greater budgetary requirements, choosing the SaaS business model is the better option.
2. Cloud deployments- With the installation and deployment of the software on the cloud, the SaaS company you are choosing provides membership to the end-users simply by granting them access through the online credentials. All you need is a web browser and internet connectivity. You need not install the on-premise software or the costly infrastructure to host the software, and nor is there a need for any license.
3. Scalability – There is huge demand for organizations to provide real-time information which requires large amounts of data to be processed timely. Fortunately, SaaS applications are known for their scalability features. They have the ability to handle a large amount of data volume and activities like payroll processing etc. Having this feature allows for up-to-date reporting and decision-making. Scalability within the SaaS model is not limited to information processing, rather it allows for the teams with users based in different locations to collaborate using the same solution.
4. Flexible licensing- The SaaS model is much more accommodating to the requirements of customers, and it often offers adaptability which the hosted software cannot offer. SaaS offers flexible monthly and yearly timeframes for subscriptions. Additionally, there is no need to purchase the license or software installation.
5. Predictable costs- Although we cannot predict the revenue, SaaS-based model becomes integral to your business operations. Here, you will build loyal customers and start to see consistent revenues monthly from the subscriptions. This is much more predictable than any other software model. With many other business models, companies are focused on attracting new customers which could be a time-consuming and costly task. But with SaaS model, instead of having customers pay a one-time fee, they pay monthly fees which makes it easier to predict the monthly or annual revenue.
6. Personalization and customization- The products or software delivered in the SaaS model can be adjusted as per the particular client’s requirements. Most of the companies offer fixed subscription plans, however, they also provide the possibility to change functionalities and settings to meet the client’s precise requirements.
Conclusion
The cloud-based business applications using SaaS business models are in high demand these days, and offer a huge number of business advantages. Due to such benefits and demand, the traditional business applications are slowly going out from the current IT plan of the organizations. The quick deployment, reduced costs, and gamut of capabilities have made SaaS solutions the first choice of business managers. The organizations are continuously looking for solutions that can fulfill the business requirements with data security on a higher priority. And, SaaS solutions are the best fit in this case.
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