If your leads are considering ditching their on-premise software in favor of moving to SaaS for their businesses, then this one's for you. I’ve broken down the basics for you in order to help you explain to your base what SaaS is, how it compares to on-premise software, and the top 7 reasons they should consider it for their businesses.
Regardless of what type of business you’re targeting, there’s a great chance that SaaS is a good option for its needs. Keep reading to find out how.
What is SaaS (Software-as-a-service)?
When potential clients ask what SaaS is, do you know how to break it down? Here’s how I do it:
SaaS stands for Software-as-a-Service, and in simple terms, it is web-based software that is hosted and maintained on the Cloud. The cloud service providers (CSP) give you the software, accessible from a web browser, and handles maintenance, upgrades, and hosting.
With SaaS, the product is usually subscription-based. With your subscription, you gain access to the software you need to run your business without the headache of maintaining it yourself. The CSP takes care of everything so you can focus on your own growth.
SaaS companies make their money with subscriptions, so factors like churn rate are important to SaaS founders to consider. That’s why they work hard to make sure that when businesses adopt their product, they stay for the long-haul. Luckily, SaaS has a high adoption rate, meaning that most of the time, users who try out a SaaS service stay for the long haul.
Examples of SaaS
Whether they realize it or not, everyone has encountered SaaS before - the model is rapidly expanding into many industries. The COVID-19 pandemic created a higher demand for cloud-based services since so many businesses had to shift to remote-first operations. Have a look at a few well known examples of software-as-a-service:
- Especially during the past few years, Zoom has turned into a household name. The company provides cloud-based video conferencing, among other features. Zoom is used by businesses and individuals to connect with colleagues, friends, and family remotely.
- Many businesses use Salesforce for customer relationship management(CRM) - this tool makes it easy for employees across different departments to access information they need about clients. Its user-friendly interface makes it easy to work with no matter what your comfort level with technology is.
- Office 365
- Popular globally, Office 365 has nearly 1.4 millionsubscribers in the United states alone. It created a cloud-based version of Microsoft products that previously required licensing.
These companies look at their subscriptions and calculate their monthly (MRR) and annual recurring revenue (ARR) to measure their projected success. As more businesses modernize and adopt SaaS platforms, SaaS vendors are finding more success than ever before.
How is SaaS different from IaaS and PaaS?
Infrastructure-as-a-service (IaaS) and platform-as-a-service (PaaS) are similar to SaaS in that they all use cloud computing to bring solutions to businesses in place of traditional software and hardware. The SaaS model is the most elaborate and the most comprehensive in terms of functionality.
SaaS providers handle everything on their end, from hosting to upgrades to infrastructure. I recommend making sure your clients understand that they’re responsible for very little when it comes to taking care of the applications.
With all three, pricing is generally subscription-based, and there are rarely any upfront costs associated with onboarding. Startups that offer these models are looking to provide the end-user with new features that software providers can’t deliver.
SaaS vs On-Premise Software
On-premise software is a different beast entirely. While it is the more traditional option, the on-premise software folks are using might be outdated and clunky. SaaS offers on-demand service with real-time access to the apps they need to run their business.
Compared with on-premise software, SaaS software is more cost effective, boasting lower costs overall in their pricing models versus traditional software, which often has tons of hidden fees and hefty upfront investments.
How is SaaS Different from On-Premise Software?
Let’s look at the key differences between what your future clients are using now and what SaaS can offer. Since SaaS is subscription-based, there are no costly software licensing fees making it more expensive with every device. That’s just one of the advantages of SaaS.
SaaS also doesn’t require hardware - everything is online. This makes it versatile and accessible from anywhere, which is a major draw for many modern companies that have a remote workforce.
Users are on a subscription basis, monthly or annual charges that cover all users
Requires licensing fees per user or device
Web-based and on the Cloud - no installation needed
Requires hardware and installation on each device
Subscription model means you use it as long as you need it
Contracts can be difficult to end
Maintenance and upgrades are handled by the provider
Requires in-house maintenance and upgrades
User-friendly model that promotes easy onboarding
Typically needs extensive training to learn the software
7 Benefits of SaaS for Businesses
Now that we’ve covered what SaaS is, let’s look at what SaaS providers can offer. Whether your potential customers run large corporations or small businesses, SaaS applications can simplify their operations.
As long as someone has an internet connection, they have everything they need to start using SaaS solutions in their business. This is often a great selling point.
1. Cost Effective: SaaS Gives You the Best Bang for Your Buck
We’ve already seen how a SaaS platform can save your clients money. Not only is SaaS cost-effective by taking away upfront costs and licensing fees - it also comes with a next-to-nothing installation cost. If there’s nothing to install, why would anyone need to pay for it?
Clients may be able to customize their subscription with their SaaS provider depending on what they need, and while they will pay for that convenience, they could save money by not paying for extras that they won’t use.
Payment options are generally flexible. Since businesses will be paying on a subscription basis, they won’t be shelling out thousands for hardware and software that ends up not working for them.
If for some reason the SaaS apps turn out to be less effective for their business than they’d hoped, they can simply cancel their subscription and there’s no harm done. (Let’s hope it doesn’t come to that, though!)
2. Accessibility: SaaS Works Where You Do
Software applications can be fickle. Of course, folks might have everything they need in the office, but what happens when they need to take a sick day or work from home? With SaaS, the work goes where they do.
SaaS allows teams to work remotely, and it also means that self-service options are available anytime, anywhere. If a client is using a CRM solution, customers can access their business applications whenever it is convenient for them, making collaboration with client bases easy for everyone.
In recent years, remote-first workforces have become more common. Businesses across industries have moved to a hybrid or fully-remote model, encouraging employees to work where they’re safest and most comfortable.
But that shift brought some unique challenges with it. SaaS aims to address those challenges by making the applications accessible to teams no matter where the office might be.
3. Scalability: SaaS Can Grow With You
SaaS vendors have a large IT infrastructure, making it extremely stable and ready to grow with its clients. As a business grows, it can up its subscription plan to keep up with its needs. It is really easy to outgrow traditional software, and it’s hard to increase software’s capabilities to match growth.
SaaS is different. These products are designed to grow with the client, and they can be scaled down if the market dictates that, too. No one needs to pay for any more or less than what they’re actually using.
4. Data Storage: SaaS Stays Backed Up
Since SaaS is cloud-based, data is regularly stored in real-time. Users can usually base your data storage options on their actual needs, and they can always increase or decrease that as you go. This way no one is wasting money on empty cloud space.
The cloud is infinite, so clients will never run out of space. Their goals for scaling their business never have to be stifled by old notions of limited data storage again. No matter what their storage needs are, you can find a plan that works to meet the demands of their business.
5. Security: SaaS Protects Your Business
SaaS providers have the ability to protect businesses’ data using an extensive IT infrastructure that delivers apps. In this setup, even the backup plans have backup plans. You can be assured that everyone’s data is well protected no matter what happens.
If the servers crash, all the data is safe in the cloud. It’s constantly being backed up so you can have the peace of mind of knowing where your customers’ data is. As a bonus, your customers’ (and their customers’) private information is safely stored there as well.
6. Compatibility: SaaS Can Do It All
SaaS can use APIs (application programing interfaces) to transfer data, which makes it compatible and flexible for use with any technology.
Also, since you handle software maintenance and upgrades on your end, compatibility issues are rare because your clients are always working with the latest version of the platform.
7. User Friendly: SaaS Makes Onboarding a Breeze
The intuitive nature of SaaS is unmatched by traditional on-premise software. Onboarding with SaaS products is typically as simple as their delivery model. Since everything is hosted at the SaaS service provider’s data centers, there is no need for any installation or extensive training.
SaaS products offer automation options that do the work for you. With a little help from your software development team, your clients may be able to customize the product to their own needs, which means it will do whatever they need it to do.
Other software solutions require training and staff to conduct that training. They need time, facilities, and resources. All of that is addressed with SaaS, and these applications typically need very little training. They’re designed to promote success.
So, what have we learned?
- Software-as-a-service: software applications hosted in the cloud
- Superior to on-premise software because the SaaS provider regularly makes upgrades and handles maintenance
- Costs less than on-premise software because there are no upfront costs or installation fees
- Subscription-based with monthly or annual payment structures
- Able to eliminate hardware and the costs and maintenance associated with it
- Found in many industries and departments
- Web-based and accessible with just an internet connection and a computer
- Safer than traditional software because data is stored in the cloud
- More convenient than on-premise options, promoting remote work
- Scalable and easy to modify to fit your business’s needs
- Compatible across many platforms and with many devices
- Low-maintenance and low-hassle because the vendor takes care of maintaining and updating the software
SaaS has revolutionized the business world with a variety of features, including significantly lower costs, high compatibility, convenience, and world-class service. SaaS vendors like you strive to make their product accessible to businesses looking for solutions, and they make using their applications easy.
As the business world moves toward cloud computing as the standard, SaaS opens up a world of opportunities for business owners. Nearly limitless revenue possibilities are just part of the reason SaaS might be the right choice for your client’s business.
The advantages offered by SaaS are complemented by the fact that the future of business is in cloud computing, so getting on board will save everyone time and money going forward.