What is SAAS – Beginners guide to understand Software as a Service”
It's no doubt that the tech industry has seen massive growth through SAAS in recent years. Both small businesses and large enterprises increasingly use SaaS products, making the SaaS market grow nearly 20% each year according to stats.
If you're unfamiliar with SaaS and want to learn more about what it is, this article is beginner friendly and will cover the necessary information you need to know about SaaS, including:
—What is SAAS
—Examples of SAAS
—Advantages and Disadvantages of SAAS
—What is B2B SAAS
—B2B and B2C SAAS
—Future of SAAS
—FAQs of SAAS
What is SAAS: Definition
Software as a service (SaaS) is a type of software model where a cloud provider hosts an application and makes it available to end users(B2B/B2C) over the internet. This means that you don’t have to download and install applications on your local device storage before you use them.
You can use a SaaS through any web browser of choice where users log into the platform with their username and password. For example Google Docs is Google’s free online word processor launched in 2006. Individuals can simply log in through a web browser for instant access compared to the traditional “on-premise” Microsoft word software that is installed on your device. Google Docs also allows you to write, edit, and even collaborate with others from any location.
Unlike the traditional software delivery model, SaaS is relatively new and here are three key differences between SaaS and “on-premise” software for better comprehension:I
1. Installation: As earlier indicated, traditional software needs to be installed on your device and often has more hardware requirements. While SaaS only requires you to have an internet connection to access the software on your web browser.
2. Maintenance: With on-premise software, businesses usually need an IT team for software maintenance and updates but SaaS eliminates the need for a maintenance IT team as the SaaS company that provides the software, maintains and updates it themselves.
3. Payment: Most times, to use an on-premise software, you need to purchase a license with 100% upfront payment. However, most SaaS companies use the “recurring subscription revenue model”, where you make recurring payments, often per month or yearly to use the software.
Examples of SAAS
To further understand this, here are popular examples of SaaS you have probably heard of:
1. Google Workspace
2. Netflix
3. Salesforce
4. Slack
5. Zoom
6. Shopify
7. Hubspot
8. Canva
9. Mailchimp
10. Dropbox
Advantages and Disadvantages of SaaS
The increased efficiency of software as a service applications has made many businesses adopt its use but here are some advantages as well as disadvantages of SaaS.
Advantages:
With Software as a Service, you enjoy:
1. Accessibility from anywhere: This is possible because the internet is everywhere and you're not limited to accessing your software only on one(your) local device.
2. Cost-effective Solution: This is because for any sized business, you only pay for what you need.
3. Automatic updates: Providers offer timely improvements thanks to their scale and because they accept constant feedback about what their customers need. This frees up your IT department for other, more business concerned tasks.
4. Easy to scale: You can adapt your requirements to the increasing number of people who need to use the system, the volume of data and the functionality required as your business grows.
Disadvantages:
1. Lack of control: Traditionally installed software applications provide businesses with a higher degree of control than cloud hosted apps because they are managed by a third-party. Updates are compulsory for everyone to use the latest version of the software application.
2. Connectivity requirement: In a situation where your internet service fails, you automatically lose access to your software/ data for the time period because SaaS is hosted on the web.
3. Increased security(data) risks: Businesses would need to take strict measures to ensure the safety of sensitive data because the SaaS provider itself secures the application. Security and data concerns
4. Lack of customization: Because of the shared nature of the service, the customization level is the same for all users.
What is B2B SAAS?
B2B SaaS simply refers to companies that sell software services to other businesses. Hence the name B2B(Business to Business). These products help various organizations for their respective functions like marketing, sales, customer service etc.
B2B SaaS vs. B2C SaaS?
B2B SaaS are aimed at businesses, while B2C (Business to Consumer) SaaS tools are built for consumers and single users. Let’s review the difference with an example for each.
—B2B
Salesforce is a customer relationship management software that gives insight regarding the interaction with the customers in each relevant department, such as the sales team.
—B2C
Netflix is a SaaS company that sells software to watch licensed videos over the internet and follows a subscription-based business model by offering various subscription plans to its customers.
The Future of SAAS
“SaaS usage is expected to grow in leaps and bounds. Just 38% of companies relied on SaaS for at least 80% of their software needs in 2016. That number increased to 43% in 2017 and to 51% in 2018. However, 86% of the surveyed organizations said they expected at least 80% of their software needs to be met by SaaS after 2022.”
In the future, SaaS may play a key role in addressing critical business challenges, including predicting which customers are at risk of leaving and determining the best approaches to upsell and cross-sell.
Moreover, with the need for high-volume data, software performance and backup increasing daily, it’s easy to predict that so many businesses will choose to engage cloud-based providers. Hence SaaS is a good investment to go into now.
FAQs of SAAS
1. Is WhatsApp a SaaS?
Although it is an app that requires an internet connection, WhatsApp isn't actually a SaaS product. That's because SaaS companies are primarily subscription-based, meaning they charge a subscription fee to users.
2. Is YouTube a SaaS?
Unlike the traditional SaaS platforms as we have explained earlier, YouTube doesn't offer software applications accessible through subscription. It operates more as a Platform as a Service (PaaS), providing infrastructure for video hosting rather than software tools for specific business needs.
3. How Much Does it Cost to Develop a SaaS Product?
The cost of building a SaaS product varies as it depends on the type of solution the business aims to solve and the technologies that they will be working with.
4. Is Intellic Solutions a SaaS?
No, Intellic Solutions is not a SaaS because SaaS provides technology-based solutions(the website building process is automated), whereas manual website building is a human-delivered service. Also our customers are not accessing a software application or platform; they're hiring a team to create a custom website according to client's taste.
In this case, Intellic Solutions is considered a Professional service business and Digital Agency that provides creative and technical services to design and develop custom-built websites that meets up customer's desires.
Contact us today for your custom website solutions and if you're into E-Commerce, check out our exclusive plans just for you.