laptop screen SaaS

Why Do Companies Use SaaS?

Technology is evolving faster than ever. The first personal computers were only introduced in 1975 and no-one had even heard of the iPhone before 2007. Until recently, the only option for business software involved storing the physical hardware, manuals, and data in the office. The days of in-house software storage may be numbered though, as more businesses move to a cloud-based software-as-a-service (SaaS) model. 

According to one study, the biggest increase in IT spend in 2019 was on cloud computing strategies with 73% of companies looking to move almost all of their apps to SaaS by 2020. (1) So it’s no surprise to hear that the global SaaS market is expected to exceed $600 billion by 2023. (2)

So what exactly is SaaS, why is it so popular, and how could the advantages of SaaS benefit your company? Let’s uncover the reasons.

Contents

What is SaaS?

Software-as-a-Service is a subscription model used to deliver software applications over the internet. Rather than the traditional method of buying the software outright, you simply rent it for as long as you need it.

  • There’s no need to build an IT infrastructure or install and configure applications as the software is stored in the cloud
  • As the applications are available over the internet, multiple users with web access can use them anytime, anywhere
  • Most SaaS applications, such as email and customer relationship management (CRM), offer usage-based subscriptions

Although SaaS technology may seem like a relatively new phenomenon, the concept has been around for almost 60 years. Rewind to the 1960s and computers were prohibitively big and expensive for most companies. And so, an early version of what we know as the cloud was created. Called a ‘time-sharing system’, it involved a network of terminals (keyboards and monitors) connected to a mainframe (computer) that gave companies a cost-effective way of accessing computer technology. (3)

How does SaaS work?

As everything is stored in the cloud, there’s nothing to download or install. All of the traditional pieces of the software puzzle, such as physical hardware, servers and coding, are hosted and maintained by the service provider and made available online so they’re easier to use on the go – even on a mobile device. Think of the software provision as a utility, similar to electricity and water, that can be supplied to meet your usage demands.

What are some examples of SaaS?

The chances are you’re already using SaaS, perhaps without even realising it. That’s because a lot of the applications we use day in, day out for business and personal reasons are cloud-based. One of the leading SaaS applications, used by the likes of Netflix and NASA (no less), is Amazon Web Services (AWS) who provide ‘on-demand cloud computing platforms and APIs to individuals, companies, and governments, on a metered pay-as-you-go basis’. (4) Further examples include:

  • Dropbox
  • Microsoft Office 365
  • Google Apps
  • WebEx
  • Slack
  • HubSpot
  • Adobe
  • Salesforce

Talking of Salesforce, the customer relationship management tool is widely regarded as one of the best examples of a successful SaaS company. Originally founded in 1999 to provide SaaS services, it has constantly capitalised on emerging technologies such as broadband, mobile, and internet security to become one of the world’s most valuable cloud computing firms, with a market capitalisation of more than $55 million. (3)

What are the benefits of SaaS?

With 80% of companies already using between one and two SaaS applications, there’s no denying SaaS is changing the way we do business. (5) Let’s look at some of the ways in which SaaS could help with business growth.

Flexible and scalable

One major feature of SaaS is the flexibility it affords users to access the software wherever there’s an internet connection, as opposed to licensed software which is traditionally linked to a specific computer or location. This flexibility also extends to easily making changes to the service to correlate with changes to your business. For example, adding new users and integrating with other systems. If you need to scale up as your business grows, such as adding an additional service of more storage space, there’s no need to buy additional servers or extra software. As everything sits in the cloud, making changes is a swift and painless process so you can make changes as and when they’re needed. 

Quick and easy

Developing and deploying cloud-based business applications is a relatively fast process which can help keep you one step ahead of your competitors. This is because the application is already installed and configured in the cloud, so all that remains is to arrange for a business to have access. SaaS applications are particularly useful for sales teams on the move as all they need is an internet connection to gain access at any time.

Always up-to-date 

Updates and new features are automatically installed on SaaS applications so you’ll always have the latest version of the software without having to request – or pay – for upgrades. This can open new opportunities for your business , increase productivity, and help you make better business decisions. Another advantage of SaaS applications is they’re constantly monitored by the providers so you can rest assured that they’re secure.

Cost-effective

One of the reasons SaaS is popular with small companies and start-ups is the relative low cost of entry. There’s typically no large upfront fees and the pay-as-you-go subscription can be monthly or annual, so the cost can be treated as an operating expenditure, rather than a one-off expense. Further savings come from the fact that there’s no hardware to buy or dedicated staff required to manage and maintain it. Any maintenance costs related to the SaaS application are split between all customers, rather than a hefty bill landing in your lap if you’re the sole user of software. All of which means that moving to the cloud can result in a 15% reduction in IT spend and a 16.7% reduction in IT maintenance costs. (6) 

Time-saving

SaaS applications can save you time in a number of ways.

  • They can be deployed across many regions at the same time
  • There’s no hardware or IT infrastructure to set up in-house
  • They’re easy to access by users at any time and anywhere 
  • They’re easy to use so have a smaller learning curve for your team

Plus, because you don’t need to get involved with the maintenance side of things, freeing your staff will have the time to focus on other areas important to your business. So if, as the old saying goes, time is money, you’re saving a sizable chunk!

In safe hands

According to IBM research, the average cost of a data breach in the UK is almost £2.7 million – and the reputational harm is incalculable. (7) Another advantage of SaaS is that the risk of your data being compromised is far less as the information is stored in a fully-managed, secure cloud environment rather than on a server, computer, or laptop in your office. 

How can businesses use SaaS?

Almost 60% of all companies use some SaaS solutions already, and nearly 36% are looking to increase their investment in the coming months (8). If you’d like to get a competitive advantage by discovering the SaaS trends for 2020, click here

No matter what industry you’re in, there’s a SaaS solution for you with applications to cover the following areas:

  • Customer relationship management
  • eCommerce
  • Customer service
  • Finance and accounting
  • Human resources 
  • Software development
  • Governance, risk and compliance
  • Analytics
  • And more…

With enterprise companies on course to overtake small to medium businesses in SaaS adoption by 2022 (9), and Forbes announcing that cloud computing has become the norm in the business world, (10) it’s fair to say the future has a distinct SaaS-shape to it. 

After all, it’s easy-to-use, cost-effective, and flexible and scalable. What’s not to like?

Have you got a SaaS requirement?

If you’re looking for a web design agency with SaaS capabilities, we’d love to hear from you. We specialise in:

  • SaaS website design solutions tailored to your exact requirements and specification
  • Platforms with built-in customer relationship managers (CRM)

You can find out more here, check out our guide to custom software vs. off the shelf or get in touch.

References

  1. https://www.idg.com/tools-for-marketers/cio-tech-poll-tech-priorities-2019/ 
  2. https://www.prnewswire.co.uk/news-releases/software-as-a-service-saas-market-could-exceed-600-billion-by-2023-892775902.html 
  3. https://bebusinessed.com/history/the-history-of-saas/
  4. https://aws.amazon.com/
  5. https://www.bmmagazine.co.uk/business/using-saas-for-business-growth/
  6. https://www.superoffice.co.uk/resources/articles/benefits-of-saas/
  7. https://newsroom.ibm.com/2019-04-11-IBM-Study-More-Than-Half-of-Organizations-with-Cybersecurity-Incident-Response-Plans-Fail-to-Test-Them 
  8. https://www.computereconomics.com/ 
  9. https://www.bettercloud.com/monitor/state-of-the-saas-powered-workplace-report/ 
  10. https://www.forbes.com/sites/extrahop/2020/02/28/the-benefits-of-saas-for-managing-cloud-security-threats/#31ad01936dd8 

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