What is SaaS? Your Guide for Future Success

Apr 7
what is saas

The world today is powered by software. Every aspect of business—from IT to e-commerce to retail marketing—can now operate via the cloud. And cloud technology is revolutionizing the way companies around the world are able to do business.

Business of the Future

In decades past, businesses simply didn’t have access to the IT infrastructure required to scale. And if they did, the price tag on software installation, maintenance, and consistent upgrades was enormous. But cloud computing has changed everything.

Cloud services allow for reliable, stable, and uninterrupted infrastructure that is available online and accessible 24/7. Primarily, this comes in the form of Software as a Service, or SaaS. A product of cloud computing and the business industry, SaaS is a software licensing and delivery model that allows users to access a vendor’s entire cache of application software through the cloud, accessible via web or API. Typically, SaaS applications charge customers a usage-based subscription fee, enabling individuals and organizations alike to rent relevant software for however long they need. 

This method of software delivery is quickly gaining popularity among enterprise software vendors, incentivizing each to keep their prices competitive (or inexpensive, at least). And as far as user experience goes, downloading a SaaS application can feel sort of like renting a car; rather than pay for the entire car at once, you pay for the miles driven, or the days used. Further, just as a car rental service maintains their rental cars, the cloud-based model of SaaS means you never have to worry about software maintenance or upkeep, since all of that is taken care of by a third-party vendor.

SaaS Popularity

At the start, SaaS was considered too luxurious of a solution for start-ups and small businesses. But in recent years, as cloud technology has permeated most aspects of life, making the internet more accessible than ever, more and more businesses have been able to make the switch from traditional, on-premise software to a SaaS model. This proliferation of tech has enabled enterprise IT to deliver remote business applications to users via the internet using data, software, and other centralized resources. 

Some of the most popular examples of SaaS products include web-based software, like Google Docs, Dropbox, and Microsoft Office 365. All of these platforms are available for unlimited use on any device with an internet connection. It is predicted that in 2022, 80% of enterprises will have transferred to a cloud-based infrastructure. SaaS is on the rise, and will only become more and more common as time advances.

SaaS Functions

The applications for SaaS are vast, spanning just about every industry imaginable. From project management to business planning, the SaaS model provides organizations with the proper tools for content management, enterprise resourcing planning (ERP), customer relationship management (CRM), security, identity and access management (IAM), and myriad other functions. 

Due to their cloud-based delivery model, SaaS applications provide customers with three different deployment options:

  1. The public cloud is a space where software is developed on an infrastructure that is available for public usage. Typically, a commercial, academic, or government entity (or sometimes a combo of all three) will own and operate the cloud.
  2. A private cloud, on the other hand, is based on infrastructure that is licensed to a single company that serves customers globally. 
  3. And a hybrid cloud is generally based on one of the aforementioned infrastructures, but can migrate to the other using standardized or proprietary technologies when demand necessitates. 

SaaS Pricing Models

At this point, the SaaS market is teeming with a diverse range of products and services. Acquiring unique enterprise software has never been easier or more cost-effective. And just as the SaaS market is diversified and far-reaching, so is their range of pricing models. 

Below are some examples of pricing models common across various SaaS platforms. Although they each differ slightly, they all have one thing in common—they’re all less expensive than purchasing an old-school software license.

  • Per-user pricing charges customers based on the number of employees using the application.
  • Tiered pricing offers a variety of packages with different features for different prices.
  • Per storage pricing is a simple model whereby customers pay based on the amount of storage they use.
  • Pay as you go charges users based on frequency of usage.
  • Subscription pricing, or a recurring, standardized payment.
  • Ad supported pricing generates revenue from advertisements rather than charging customers usage fees. 
  • Freemium pricing offers a free-to-use product complimented by premium add-ons. 

Staying up-to-date in the software industry is a full-time job. And transitioning to a workforce powered through SaaS applications can be challenging. That’s why many companies turn to business partners like KitelyTech, INC. for assistance. At KitelyTech, INC., we work with companies to develop and implement new software solutions. Call us at (800) 274 2908 to discuss your business’s software needs and find out how we can help.

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