Software as a Service (SaaS) has existed in one form or another since at least 1999. However, over the years, it’s evolved and grown into a massive industry that’s replaced on premise solutions and taken the business world by storm.
Why is SaaS growing so quickly – and how do businesses benefit?
The Rise of SaaS
In the most basic form, SaaS is software that’s hosted on the cloud – as opposed to on a company’s physical servers or hard drives – and is charged on a subscription basis. For businesses using the software, the SaaS model affords a number of distinct benefits (which will be discussed in the next section).
But it’s not just the customers who enjoy SaaS. Massive software companies who once sold standard software are perpetuating the trend by overhauling their business models.
“Microsoft and Adobe, for example, now offer their products on a subscription basis despite the fact that their traditional business models were based around selling perpetual software licenses,” says Lucien Wynn, managing director of a Oneserve, a software company that sells field service management SaaS solutions.
In addition to traditional brands like Microsoft and Adobe, we’re seeing entirely new companies enter the industry by building brands around the attractiveness of SaaS.
For example, SuperSaaS, an online appointment scheduling platform, has found success in basing their company on the SaaS model. More than 45 million appointments have been booked on their platform worldwide, proving that the model exists for both large brand names and smaller companies.
The Why Behind High Adoption Rates
So, what are the benefits of switching? Well, according to vendors and customers, these are a few of the top ones:
- Lower Cost
With SaaS, you only pay for what you need. There’s also no need to purchase specific hardware to host the applications you’re using. This results in a lower cost of entry and enables small businesses to gain access to enterprise-quality solutions.
- Better Scalability
Because SaaS solutions are hosted by the vendor, you only have to pay for what you use. For growing businesses, this provides massive cost savings.
Let’s say you only have 10 employees right now. You only have to pay for 10 people to use the software. However, if your business is growing and you have 15 employees next month and 25 employees by the end of the year, you can easily adjust your plan to fit these fluctuating demands. This ultimately reduces wasted spending and maximizes output.
- Frequent Vendor Upgrades
“SaaS solutions typically offer seamless, automatic, frequent upgrades as part of the ongoing subscription charge,” says Andrew Brooks of IT World Canada. “Because these upgrades happen more frequently and therefore incrementally than on-premises solutions, they typically have significantly reduced testing and end user acceptance and training costs.”
If you’ve invested heavily in on premise software in the past, you know how frustrating and expensive it can be to keep your solutions updated and relevant. With many SaaS solutions, these frustrations are avoided altogether.
- Lower Learning Curve
Finally, there tends to be a much lower learning curve with SaaS. The reason is that many SaaS vendors create tools that allow for a large amount of customization. This means the software fits your business, rather than your business needing to fit the software.
The Future of SaaS
In the future, Software as a Service is likely to become even bigger. With almost all major software providers now investing in cloud technology, there doesn’t appear to be any turning back.
Think fast, because now is the time to convert.