The SaaS Model and Why Your Business Needs It

May 29, 2021 - 4:10 pm
The SaaS Model and Why Your Business Needs It
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The Software as a service (SaaS) business model is gaining traction in recent times. Companies of all sizes are now embracing SaaS as the next best alternative to on-premise hardware and software development. Computer Economics reports that around 60% of companies have now integrated at least some percentage of SaaS solutions into their business, with nearly 36% aiming to increase their investment in the months to come.

What is Software as a Service (SaaS)?

SaaS is a software distribution model in which a third-party provider hosts applications and makes them available to customers over the Internet. It is one of three main categories of cloud computing, alongside infrastructure as a service (IaaS) and platform as a service (PaaS).

Organizations can integrate SaaS applications with other software using application programming interfaces (APIs), which is a set of functions that allows applications to access data and interact with external software components, operating systems, or microservices.

To simplify, an API delivers a user response to a system and sends the system’s response back to a user. You click “add to cart”, an API tells the site you added a product to your cart, the website puts the product in your cart, and your cart is updated.

A woman shopping online. Photo by Pickawood on Unsplash.

A business can write its software tools and use the SaaS provider's APIs to integrate those tools with the SaaS offering. There are SaaS applications for fundamental business technologies, such as email, sales management, customer relationship management (CRM), financial management, human resource management (HRM), billing, and collaboration.

Why should you consider the SaaS business model for your business applications?

The ability of fast deployment with lower investment risk has made business owners choose SaaS solutions over other choices.

Other benefits include:

1. Flexibility and Scalability

SaaS applications enable you to choose the delivery model and easily change it when your business requirement changes. It is way easier to get new users, integrate with other systems, and turn on an additional set of components. You will be able to experiment in a less risky environment by trying on a new project, acquisition, or user base.

Also, rather than purchasing software to install or additional hardware to support it, subscribing to a SaaS offering is a better option. Generally, you pay for this service every month using a pay-as-you-go model. Transitioning costs to a recurring operating expense allow many businesses to exercise better and more predictable budgeting. Users can also terminate SaaS offerings at any time to stop those recurring costs.

SaaS offers high vertical scalability, which gives customers the option to access more, or fewer, services or features on-demand.

2. Convenience and Speed

The selection and deployment of a business application have never been an easy task. Factors such as time and effort stack up, even after the implementation is successful. Cloud applications deploy faster, therefore bringing down the installation and administration efforts.

Having the ability to develop and deploy quickly will let one have a competitive edge and also the opportunity to speed up the business benefits. SaaS creates value for its users much faster to bring in change when they need it.

Photo by Praveen kumar Mathivanan on Unsplash.

Also, since SaaS applications are delivered over the Internet, users can access them from any Internet-enabled device and location.

3. Updated and Best Features

Having the best features for your business apps can make work more interesting and bring in high productivity among employees. Your team can use new features instantly to make informed business decisions.

Businesses with traditional applications have to spend heavily on upgrades. With SaaS, businesses are benefitted as these upgrades will be managed by the providers. In turn, this lets businesses focus on or use new capabilities as and when it is available. The security and functionality are improved as it is done in the background.

4. Better Performance

The cloud solution deployment time is way less when compared with the on-premise systems. You can deploy a cloud-based system across many regions, thereby avoiding the cost associated with those rollouts.

There is no additional hardware required; therefore, you will not be wasting time in procuring and setting up IT infrastructure and VPN access across numerous sites. Also, you can add in more users as your business expands without thinking about improving the hardware.

With SaaS, service providers are taking all the burden of security, availability, and performance, which means that these systems are hassle-free.

Photo by Peter Gombos on Unsplash.

To sum it, SaaS removes the need for organisations to install and run applications on their computers or in their own data centres. This eliminates the expense of hardware acquisition, provisioning and maintenance, as well as software licensing, installation and support.

Businesses have been constantly looking for solutions that can meet organisational requirements such as data security and high performance— and SaaS fits the requirement.

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