In an earlier article, Innoware looked at the benefits of customised software in the context of Pricing & Quotation Software. As a follow-up, this article aims to explore the benefits of subscription based out-of-the-box pricing software (also known as Software-as-a-Service).
Instead of installing and maintaining software yourself, you simply access it via the Internet, freeing yourself from complex software and hardware management. Access to applications is easy, the only requirement is an Internet connection.
Other names for SaaS are Web-based software, on-demand software, or hosted software. Whatever you choose to call it, SaaS applications run on a SaaS provider’s servers. The provider manages access to the application, including security, availability, and performance.
As an example, think about your bank, which protects the privacy of each customer while providing a service that is reliable and secure - but on a massive scale. A bank’s customers all use the same financial systems and technology without worrying about anyone accessing their personal information without authorization.
Today, SaaS pricing and quotation applications are expected to take advantage of the benefits of centralisation through a single-instance, multi-tenant architecture, and to provide a many featured experience competitive with comparable in-house applications. SaaS applications are either offered directly by the vendor or by an intermediary party called an aggregator, which bundles SaaS offerings from different vendors and offers them as part of a unified application platform.
SaaS application access is frequently sold using a subscription model, with customers paying an ongoing fee to use the application. Fee structures do vary from application to application; some providers charge a flat rate for unlimited access to some or all of their application's features, while others charge varying rates based on usage.
The Advantages of SaaS
1. It Can Save You Money
Traditionally, deploying large-scale business-critical software systems, such as ERP and CRM application suites, has been a major and costly undertaking. Deploying these systems across a large organisation can cost hundreds of thousands of pounds. The time, staff, and budget requirements of a deployment of this magnitude represents a significant risk and expense for a business of any size, and often puts such software out of the reach of smaller organizations.
SaaS applications on the other hand don't require the deployment of a large infrastructure at the client's location, which eliminates or drastically reduces the upfront commitment of resources. Also, giving prospective customers a chance to try the software for a limited period before they buy it helps eliminate much of the risk surrounding software purchase. If a piece of software is only needed for a limited period then it is only paid for over that period and subscriptions can usually be halted at any time.
There are of course no additional hardware costs as the processing power required to run the applications is supplied by the cloud provider. There are also no initial setup costs as applications are ready to use once the user subscribes. Updates are automated; whenever there is an update it is available online to existing customers, often free of charge. No new software will be required as it often is with other types of applications .
SaaS applications are usually licensed with a usage-based transaction model, in which the customer is only billed for the number of service transactions used. Or, there's the time-based subscription model, in which the customer pays a flat fee per user for a particular time period such as a month or a quarter - and is allowed unlimited use of the service during that period.
2. Multitenant Architecture
All users and applications share a single, common infrastructure and code base that is centrally maintained. SaaS vendor clients are all on the same infrastructure and code base, so vendors can innovate more quickly and save the valuable development time previously spent on maintaining numerous versions of outdated code.
3. Easy Customisation
Each user can easily customize applications to fit their business processes without affecting the common infrastructure. These customizations are unique to each company or user and are always preserved through regular upgrades, with less customer risk and much lower adoption costs.
4. Get Better Global Access
You will get improved access to data from any networked device and at the same time make it easier to manage privileges, monitor data use, and ensure everyone sees the same information at the same time. All users will have the same version of software which allows for easier collaboration.
SaaS is accessible from any location so rather than being restricted to installations on individual computers, an application can be accessed from anywhere with an internet enabled device.
5. It will transform your IT Department
SaaS has the potential to transform the way your IT department relates to and even thinks about their role as providers of computing services to the rest of the business. With SaaS, the job of deploying an application and keeping it running from day to day - testing and installing patches, managing upgrades, monitoring performance, ensuring high availability, and so forth - is handled by the provider. By transferring these responsibilities to the provider, your IT department can focus more on high-value activities that align with and support the goals of your business. The department will have an opportunity to contribute to the success of your business more directly than ever before.
6. Ease of Management
SaaS applications are completely managed by the vendor or SaaS hoster; in fact, the implementation of management tasks and responsibilities is opaque to the consumer. Service-level agreements (SLAs) govern the quality, availability, and support commitments that the provider makes to the subscriber.
7. Cross device compatibility
SaaS applications can be accessed via any internet enabled device, which makes it ideal for those who use a number of different devices, such as internet enabled phones and tablets, and those who don’t always use the same computer.
Conclusion
At first, the enterprise software world didn’t take SaaS seriously. In the last five years, however, that’s changed dramatically as SaaS companies have proved they are able to grow their revenue and customer base through a subscription licensing model. At the same time, buyers are increasingly drawn to the affordability and the familiarity of the web browser-like user interface (UI) that SaaS offers.
Tasks related to accounting, invoicing, sales, planning, pricing and quoting can all be performed through Software as a Service. Businesses may wish to use one piece of software that performs all of these tasks or several that each perform a different task. Everyone who needs access to a particular piece of software can be set up as a user, whether it is one or two people or every employee in a large organisation.
SaaS offers you substantial opportunities to negate the risks and expense of software acquisition, and to transform your IT Department into a proactive, value-producing part of your enterprise. You would do well to consider the flexibility and risk-management implications of adding SaaS to your portfolio of IT services.
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Sources
- http://blog.softwareadvice.com/articles/enterprise/saas-faqs-1072811/
- http://searchcloudcomputing.techtarget.com/definition/Software-as-a-Service
- https://msdn.microsoft.com/en-us/library/aa905332.aspx
- https://www.salesforce.com/saas/
- Business Analysis Methodology Book, 2015 by Emrah Yayici
- Scaling Software Agility:best practices for large enterprises, 2007 by Dean Leffingwell
- Hack the Entrepreneur: how to stop procrastinating, build a business and do do work that matters, 2015 by Jon Nastor
- The Business of Software 2006, Joel Spolsky and Eric Sink