Suppose you own a company and you need to use a software. Now, the development of the software will require technology and technical personnel, which is costly. What if you get to use the same software on monthly subscription basis? Doesn't it sound good? This method is known as SaaS. So in this article, we will learn about what is SaaS model.
What Is SaaS Model? What Is It To Use Software As A Service?
SaaS is a model of Cloud Computing. This is a service which provides the users with access to a software or application on the basis of monthly subscription. This implies that you don't need to spend on acquiring technology and man power required to develop the software. You will be able to use the software on monthly subscription.
In the past, it wasn't easy to launch a new application. From the long sales process, to installing it and then training the employees, the whole process used to go on for weeks, if not longer. Then the employees of a company would be able to go somewhere and use that new application.
Now, all this process is a matter of just few days, courtesy SaaS computing model. That's why SaaS is fast becoming the delivery model for core business applications. Even the traditional software development companies are now developing SaaS products and offering their services to different businesses.
In nutshell;
SaaS is a cloud computing model which allows you to use an application or software as a service. Cloud Computing, as we know, works on pay-as-you-go model, which means you will only pay for the services you use. Same goes for SaaS services. You will pay as much as you use a SaaS product.
Lets talk about the different types of SaaS model.
What Is SaaS Model?: Its Different Types
SaaS applications come in different forms and sizes, and serve different purposes. However, there are three types of SaaS applications which are as follows:
- Packaged SaaS
- Collaborative SaaS
- Technical SaaS
Let's dive a bit deeper in the types of SaaS.
1. Packaged SaaS
Packaged SaaS are products that manage a specific process in an organization, such as improving employee management, improving customer relationships or making marketing more effective.
2. Collaborative SaaS
Collaborative SaaS are the products that improve teamwork. From messaging and video conferencing to working on different documents, This products improve collaboration among teams.
3. Technical SaaS
Technical SaaS provides businesses with technical and IT-related capabilities, such as cloud computing, data storage, cyber security, and network management. Technical SaaS is becoming increasingly popular due to its scalability, ease of use, and low cost.
What Is In SaaS Model? Why Do Companies Prefer SaaS Model?
Currently, different companies prefer SaaS model because it proves to be the best for them in many aspects. If a software is installed on your device, it may cause an error due to other software, or Windows itself.
You don't need to install a software on your device in SaaS Model. Additionally, SaaS is a lot cheaper than other traditional software, which helps to convince users to prefer SaaS.
Developers also like the SaaS model because it only develops and runs on the SaaS company's infrastructure.
What Are SaaS Model's Benefits?
Adopting the SaaS business model, rather than the traditional software installation is beneficial for not only the users but for the SaaS company itself. The SaaS business model proves to be the best for the company's target consumers while proving to be beneficial for them.
This reduces your costs and increases the flexibility of product use. Following are some more advantages of SaaS business model:
Benefits Of SaaS Model For Users
1. Low Cost
As SaaS platform is provided on subscription basis, so it eliminates the cost of licensing and installation of traditional software. It also allows users to scale their expenses according to the usage. Moreover, as SaaS products are cloud-based, so they also eliminate the cost of infrastructure.
2. Scalability & Flexibility
SaaS business model provides flexibility to its users. If you base your pricing on usage, your clients will only pay more if they use more. As a SaaS company, this feature enables your clients to grow their business with the help of your software. Because of this, you can also avoid paying for a product that you may not need later.
3. Instant Benefits
As SaaS tools are cloud-based, clients get instant benefits. It is as easy as accessing a product after logging in.
4. Increasing Rate Of Adopting SaaS
The ability to use SaaS tools anywhere in the world has increased their adoption rate. If users get immediate benefits from the software, they are more likely to continue using the product.
5. Free Upgrades Facility
Down time can be very costly for a company. Down time is the time when your software or website is down and not ready to be used by users. This mostly happens when the software or website is being upgraded.
SaaS model ensures that the users don't face any downtime during system upgrades.
Benefits Of SaaS Business Model For Vendors
Following are the benefits of SaaS business model for business vendors:
1. Freedom From The Hassle Of Price Gouging
Most of the SaaS models work on per month or per user subscription. Due to this, end users can easily calculate the cost of a SaaS software. This eliminates the hurdles in sales.
2. Increasing Revenue
One of the biggest benefits of a SaaS business model is that it increases your revenue and reduces customer churn.
3. An Opportunity To Improve Your Product
With the help of SaaS business model, you can continuously improve your product by updating it. This will help you retain the customers and convince the new ones.
4. Easy Free Trial
The support of traditional Software can be long and costly. With SaaS model, you can provide instant support to your clients. Moreover, you can provide a 7, 14 or 30-day free trial to your customers. The customer can then may keep using the free trial until it expires, or go go for a paid plan.
5. Easier Update And Support
As a SaaS company owner, you need to know how to value a SaaS company. It also includes controlling the system and environment in which the product is being manufactured.
For example, if you build a product that needs to be installed on multiple devices, it will need to support (testing) edge cases and different operating systems, etc.
What Is SaaS Model?: Final Words
SaaS business model provides so many benefits for your business. This model is liked and adopted at a larger scale, and this trend will only rise. Coupled with market demand and competition, you need to focus on the dynamics of the SaaS industry and work to deliver unique solutions and value to your customers.
It depends on the SaaS product whether an app is provided to access/use the software in desktop, mobile and web interfaces.
Read More:
What Is IaaS? All You Need To Know About Cloud Computing Model
