What is SaaS? The Golden Era of Small Business is Almost Here

  • CMS Wire survey finds 38% of companies are already running almost entirely on SaaS.
  • 73% of enterprises globally will run almost entirely on SaaS by 2020, TechRepublic an online trade publication reported.
  • 78% of the U.S. small businesses will be fully adapted to cloud computing by 2020, Forbes published in his report.

New to SaaS? Welcome!

If you’re just starting to understand the concept of SaaS, this is the place where you will find out what SaaS can do for you, how SaaS is different from other services, identify questions about SaaS, and learn more about developing SaaS applications.

 Are Your Existing Infrastructure Services Responding Slow?

The majority of the organizations face this issue, their infrastructure systems are slow and it’s costlier to manage and maintain the system. SaaS software can be a boon to your business by adding up with speed and security.

New to SaaS?

It is a method of software delivery in which software is accessed online via a subscription/plan rather than owning and installing on personal computers.

SaaS provides a complete software solution, where you pay for the services as per your use from a cloud service provider. You facilitate the service on a rental basis, for your organization and your users to connect to it over the Internet, with a secure browser.

SaaS applications are often called Web-based software or hosted software. The SaaS applications run on a provider’s infrastructure. The service provider provides access to the application, including security, availability, and performance.

SaaS: No need for maintenance and up-gradation to the latest hardware

SaaS users don’t buy physical hardware or additional software, whereas, access to an application is easy- you just need an internet connection.

Why Should You Move to a SaaS Model?

  •         Quick Launch

Each SaaS application is installed and configured in the cloud. This avoids common delays in what the traditional software normally consumes. There is no additional time-consuming process for installation with the client’s hardware once the software is deployed on-site.

  •         Scalability

There is no need to worry about capacity as the software’s usage or traffic. Moving to a SaaS model, it means organizations can scale as per requirement without worrying about acquiring new hardware and other infrastructure components.

The process of hosting multiple products at the same time costs much lower than owning your hardware. Also, the owner can recover incremental costs by billing based on usage.

  •         Costing comparatively Low

Costs in the SaaS model are comparatively lower in several ways.

-Total Cost of Ownership

Generally, the total cost of ownership is lower. This is due to an arrangement of lower hardware costs and not losing effectiveness as traditional software becomes outdated. Also, the client need not maintain a physical space to hold the servers. 

Pay as Per You Use

The final costing is imposed as per your use. There are no additional costs linked to it. In short, pay the cost of how much you have used. For example- Many providers charge on a pay per-second usage. 

-Initial Setup Costs

The initial setup costs much less including a much lower upfront software cost, in comparison to the traditional setup. The client stops buying new hardware or renovates a physical space to hold it. 

-Maintenance

Reducing client-site hardware reduces maintenance and downtime. The user is not required to bring down their system for hardware upgrades or repairs, while the product developer can share backup systems between applications. IT professionals can also evade spending time and money performing precautionary checks to ensure system reliability and avoid unnecessary downtime.

Why is the SaaS Industry Growing So Rapidly?

Have you noticed your computer, smartphone, and laptop have more storage and RAM than ever before, but still the hunger for more storage is soaring? Why?

Low Barrier for Entry – The SaaS industry is growing rapidly due to the high demand for technology, it boosts productivity within enterprises. Organizations prefer the SaaS model because of the low barriers to entry, efficiency, and the ability to stay updated.

Eliminating Excessive Pressure from ITSaaS solutions have removed a “burden from internal IT teams”, and enabled businesses to focus on delivering “strategic initiatives”.

More Nimble – SaaS solutions can be more easily configurable, and therefore [are] better [at] supporting changing business processes and general business strategy; allowing better agility to meet changing business needs.

Less expensive – Krish Subramanian, CEO of Chargebee, commented on how the “improved affordability” now provided by SaaS solutions has enabled them to extend their reach beyond enterprise organizations and help SMBs and startups to easily launch “revenue-generation vertical solutions” for a very specific target audience.

For Whom SaaS Model Right For?

SaaS models can be used in any business infrastructure, although have a glimpse of some situations.

  • Reduce your time to benefit
  • Lower costs
  • Make your software easier to use
  • Expand to new markets
  • Have a more stable and anticipated SaaS business model

What is a SaaS product?

SaaS products are a platform where all users have access to use these services via the internet. Some examples of SaaS platforms are – Google Apps and Dropbox.

The idea of the SaaS app began by entrepreneurs in the mid-90s. To date, it is one of the most suitable business distribution models. Approximately,  51% of companies are operating every process in the cloud.

To use SaaS platforms, you do not need to install any physical hardware or software. A server provider hosts the application. Both the maintenance and updates are performed on the host site and are invisible to the user. You also get security patches on time along with on-time maintenance. What could be easier than that?

SaaS has rapidly developed as a model for delivering the best value to the customers.  Multinational corporations prefer to absorb SaaS companies along with their products for market growth.

For example, Microsoft acquired GitHub, a company that provides hosting for software development using Git in 2018 for $7.5 Billion; Adobe acquired Marketo for $4.75 billion and Magento for $1.68 billion.

In short, the SaaS product market has greater vision and capabilities. It provides an opportunity to become a participant in the cloud cut-throat war and choose any position in a trillion-dollar market. 

Therefore, to become a successful player in the market, you need to understand the basic concepts and strategies of SaaS.

Are We Heading for a SaaS-based Digital Workplace?

Gartner expects SaaS to reach 45 percent of total application software spending by 2021 —overtaking IaaS and PaaS technologies. The result could open the door to a SaaS-dominated digital workplace.

 Some companies may not be able to move entirely to a SaaS model based on what they do at their core or what their compliance outlook looks like, adding those companies should take extra caution when shopping for a SaaS product.

Experts agree that organizations need to do their due persistence through proper research and by understanding the benefits to ensure that a positive change does not bring negative consequences.

Examples of SaaS Companies and their Revenues

  •         Google

It needs no introduction; from 1998 to date the company has $136 Billion in revenue.

  •         Adobe

A photoshop person should know about it. Well, the Adobe users helped the company to earn $9 Billion in 2019.

  •         Shopify

     Over 800 thousand enterprises use this tool for SaaS business purposes. Shopify earned 1.3 Billion in revenue last year.

.      Amazon 

    Amazon’s subscription services like Amazon Prime and AWS reported 150 million subscribers all across the globe. The total annual revenue the company recorded is $280.5 Billion in 2019 from all its services.

Posted in