May 2009

Defining SaaS and Its Contribution to Business

Are you in business? Perhaps you are thinking of putting up your own? Either way, you have one very important concern: money.

 

No matter what type of business you are going to create—whether it is going to be brick and mortar or an online one—you need some form of capital. You need the money to buy the materials that you need to start off properly.

 

This is where SaaS comes in. Also referred to as software as a service, this is a kind of software deployment model where application vendors would make their programs available on demand to their clients. Simply put, rather than purchasing the very expensive software, all the clients need to do is to rent them.

 

Top Reasons of Using SaaS in Business

 

If you are dilly-dallying with the idea of using Saas for your business or not, perhaps the following reasons will make the decision so much easier:

 

1. You do not need to spend thousands of dollars for your programs. Instead of spending as much as 5,000 dollars for a single software that could be installed in only one computer, you will only have to pay for the monthly subscription for your SaaS. The cost may even just be around a couple of hundreds or even less. You also have the choice of whether to pay monthly, quarterly, or yearly.

 

2. You can change your software provider more conveniently. One of the foremost reasons why it becomes very hard for businesspersons to change applications immediately, especially if the ones they got are not the best ones for their enterprise, is because they have not really maximized their investments to such programs. When you are working with a software provider, on the other hand, you only have to use their applications on demand. When you are done with it, and you believe that there are better providers out there, you can opt not to renew your subscription.

 

3. There is no need for you to pay for upgrades. When you have stand-alone programs, it will be your responsibility to ensure that they are always properly maintained. Though some of them will give you free upgrades, most of them do not. This means that you can expect to pay hundreds of dollars every year for the renewal of your license or upgrade. You will not have to worry about this when you have a SaaS provider. Since they technically own the program, they will have to take care of the maintenance themselves.

 

4. You would not have to pay more for labor. Besides infrastructure and technology, you also have to allocate funds for your employees’ salary. Logically, the more people you have in your company, the more money you have to set aside for payroll. The SaaS model will prevent you from spending too much. You do not have to look for an IT professional and then pay for his or her salary and even for his training. When you need help in running the software, you can simply contact the technical support of the company. You can reach them via e-mail, telephone, and live chat.

 

5. All your data is kept safe and secure. Perhaps you are worried about your data. How safe are they when you know that you are technically not the owner of the applications? The answer is they are completely secure.

 

Part of the subscription plan is data backup and recovery. All your information are stored in different servers and in real time. This means that every time you save on something, another copy of it is already created somewhere else. Moreover, you are still given full control on what you do with the information that you inputted. What SaaS vendors would just do is put restrictions on administration of the software.   

 

SaaS are indeed helpful for those who are managing their own business, from small- to large-scale enterprises. You get access to programs that are very powerful, and yet there is no need or rush for you to spend a lot for them.

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SaaS and impact of the econmic crisis

I recently received a report which included some interesting market data about about how the economy has impacted SaaS.  

 

At the end of 2008, a survey was conducted in order to gauge the impact of the economic crisis on buyers’ attitudes toward SaaS. In the aftermath of the financial meltdown, the survey data provided clear evidence that demand for cloud-based solutions continues to remain strong. Two survey questions in particular address how organizations consider SaaS in relation to key business goals and expected business value from those SaaS solutions. 

  • In terms of business goals: “Sales/Revenue Growth” and “Reach New Customers” are the top two business goals across industry groups with “Increase Profit Margins”, “Managing Budgets” and “Decrease Operational Expenses” close behind in the top five. The biggest relative change came at the bottom of the list, with dramatic lowering of priorities as it concerns “Entering New Markets” and “Change the Organization’s Business Model.”  
  • In terms of expected benefits: “Capital and Operating Cost Reduction” is the leading business benefit expected from SaaS as a whole, followed closely by “Simplify Software Management” and “Improve Service Levels.” The lowest-ranked expected benefits are “Access Next-generation Application Functionality” and “Leverage SaaS Provider’s Leading-edge Technology.”  

Is there a direct linkage between expected benefits from these solutions and the business goals that drive enterprises? The need for top-line growth drives the top two business goals across most industry groups with costs and profitability close behind. Yet, among expected SaaS benefits, increasing revenue falls well back into the lower half of favored responses.  

 

For more information please click on:  

http://www.researchandmarkets.com/product/720280/saas_in_the_postcrash_era_industry_data_ind  

 

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