The Basics of SaaS (And What It Means for Your Business)

October 25, 2016 · Industry Developments

You don’t have to venture far to experience Software-as-a-Service (SaaS). If you’ve used Office 365, Salesforce, or even just email from Google Apps, you’ve gained some real first-hand experience with SaaS.

Okay. But why should you care, and what does this really mean for you in the long run?

What is SaaS?

If you’re at all baffled about SaaS, simply think back to the days of popping a CD into your giant desktop computer and listening for the CD scanner — that humming sound is a reminder that your new software is loading and ready for download.

Essentially, SaaS is an on-demand format. You can download it directly to your computer via a regular ‘ole web browser. You can get it when you need it and when you want it, and some offer convenient subscription services.

The Benefits of SaaS

SaaS offers some compelling benefits for every player. Customers get instant access to the software they want. And because everything is in the cloud, customers don’t have to worry about the upfront expense of managing and delivering software on their own.

SaaS - Cloud computing

Additionally, the SaaS subscription payment model is extremely appealing—services such as pay-as-you-go and the ability to end the service at any time with certain companies, is undeniably convenient.

And, from a technical perspective, SaaS delivers a few robust legs up on the old-school competition:

  • Automatic updates
  • The ability to access the software from various devices
  • It’s super easy to scale up or down

Top Trends in SaaS

In a 2015 study, Gartner categorized SaaS as here to stay. Gartner placed SaaS on its list of “Plateau of Productivity,”– their fancy way of saying, “Look guys, this ain’t going anywhere”. Mainstream adoption is just around the corner.

If you’re selling SaaS of your own, then you’re likely realizing some of the following benefits.

  1. Free trials can lead to big bucks. Free anything is enticing. It’s enticing enough to make a lot of customers stick. Giving away something for free is the hallmark of a SaaS company. There’s a lot of confidence that customers will stick around long after the trial period has ended.
  2. It’s a faster sales cycle. Lay the dinosaurs to rest. SaaS sales are done quickly. There’s definitely a transactional element to the purchase process. But remember, the software itself is a fast web-based download. There’s not a lot of need for technical overhaul and exhausting scope documents.
  3. You’ll see huge benefits from retention. Increasing your customer retention by just a smidge can deliver massive revenue benefits. If you’re not tuned into your customer’s lifetime value, now’s the time to brush up on your research and analytics.
  4. An extra side of service, please. It’s not called SaaS just because; there is a real service element to all of this. Your frontline staff is hugely important in ensuring your customers are happy.

Companies are absolutely willing to invest in the right SaaS solution. In fact, 85% of small business owners said they would be willing to adopt a SaaS solution in the next five years. And 27% of small business owners recognize that SaaS helps them simplify their lives.

There’s a lot to be said about that.

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