Why Startups and SMEs Should Implement SaaS | Advantages and Future

Why Startups and SMEs Should Implement SaaS

What would you do, if you wanted water in your home? Open a tap, right?

Imagine having to own a reservoir just to have a glass of water. Tedious, isn’t it?

Just like this water tap analogy, traditionally, companies relied on software that was delivered physically (or downloaded & installed to their servers) to do their operational tasks. For example, keeping a track of all the sales of the company or the pipeline. 

This meant that the organization relied on software that could only run on enterprise-grade servers, which needed a high onboarding cost and also required a dedicated IT team to take care of the server and the security of it and these servers had to have redundancies as well, in case of a system failure. All this directly impacted the bottom line of the company through very high CapEx and OpEx.

Typically, buying software purchases for enterprises is complex in terms of accounting. According to Gartner’s research, a typical IT purchase for an enterprise involves 5 to 15 people in the decision-making process. To summarize, traditional enterprise-grade software was costly to buy, operate and maintain, while taking a lot of resources in the decision process. 

The explosive growth of the internet and cloud-based technologies had fuelled the solution for this long-term issue that was faced by these companies.

The technology for easier adoption of enterprise solutions

Simply put, you can think of Cloud computing as using a service provided by another company over the internet, without having to actually have the hardware and software necessary to run that service. Cloud computing involves services like IAAS (Infrastructure As A Service) and SAAS (Software As A Service) that are highly cost-effective.

What makes these services highly competitive and effective are the costs associated with them. Since the enterprise need not buy the hardware and software (usually enterprise-grade servers and lots of software to keep them running), the initial cost itself is negated. The actual software need not be bought on a perpetual license model, which contributes to the reduced investment in terms of initial purchases. 

The icing on the cake here is that the company that provides the SAAS, takes care of the security, maintenance, upgrade and upkeep of the software as well as the hardware. This means that the enterprise just needs to focus on adopting this software to make the best out of the solutions, without worrying about any of these maintenance costs. This is savings in terms of OpEx and in terms of the necessary manpower required to carry out these tasks.

SAAS, being customer-friendly, removes the barrier for high upfront cost and helps software vendors in providing completely customer-centric services.

The SAAS model allows for shifting expenditure wherein the capital expense (CapEx) on buying items can be put into operating expenses (OpEx). This proves to be a promising way for the organizations in stretching their budget and also in assisting the cash flow. This is precisely the flexibility that is achieved by implementing SaaS in business solutions.

Market forecast for Software as a Service (SaaS) solutions

We could say, conversion to Cloud-based SaaS is one of the top priorities for many companies. In fact, the companies which resisted movement from the traditional software-based model to cloud-based SaaS are finally ready to make the switch. According to this report, about 43% of the companies in 2020 have prioritized this movement, as opposed to only 29% in 2019.

Even before the effects of the pandemic was widely felt across the globe, Gartner had predicted that SaaS stood to grow about 10.5% during 2020. The report mentions that the shift in spending for the enterprises has moved from saturated market spaces like mobile, tablet and smartphone industries to increasing operational efficiencies like data centers and cloud infrastructure.

The biggest factor in 2020, which is Covid-19 has pushed the adoption further, by making remote work prevalent and making datacentre management unattractive. Figuring this into our factors, it is almost no wonder that companies prefer software as a service rather than requiring a datacentre and personnel to achieve the same results.

Adapting SAAS and cloud computing for business solutions

The age of digital transformation is here. It means businesses of all sizes are looking at ways to use technology to deliver more value to their customers (value such as quicker response times to queries and requests, more personalized customer communications).  Customer experience is at the forefront of the mind of many (if not all!) businesses. This is creating a huge number of opportunities for SaaS solution providers to work with businesses to help them improve customer experience and speed up their digital transformation.

With the above-mentioned cost efficiency the SAAS solutions offer, along with their ease of usage and customer-centric approach, SAAS has become one of the lucrative offerings in the field of digital transformation and increasing operational efficiency.

The SAAS vendors then need to have a customizable, scalable and efficient solution that can be tailored for industries across any vertical. This adaptability of the SAAS platforms will prove to be a deciding factor in the success of this technology being successfully adopted. 

This, in fact, has given rise to an altogether new business vertical called Digital Adoption Platforms, which in itself is a fast-growing technical disruptor.  

Advantages of implementing SAAS in business

The competitive edge that SAAS offers to business are many:-

  • Cost-efficient:

 Unlike, traditional software development methodologies, SAAS works on a subscription basis and includes upgrades, maintenance and customer support. Because of the monthly subscription, there is no need to pay a large upfront cost.

  • Easy deployment:

With SAAS solutions, all that is required is a browser with an internet connection and does not require any software to be readily installed. Whereas, traditional software deployments took weeks or even months to be deployed.

  • No specific infrastructure:

SAAS applications are built in such a way that they are platform-independent and can work the same with all OS (Operating System) and all the infrastructure-related issues are handled by the SAAS vendor.

  • Easy upgrades:

SAAS eliminates the need to download or update the software as the software management and upgrades are managed by the vendor and ensures that the application is upgraded up to date.

  • Backups and data recoveries:

In traditional ways, the backing up of data weekly was time-consuming. SAAS makes it easier by automatically backing up the data without user intervention and thus protecting the integrity of the user data.

  • Mobility:

SAAS provides access to data if there is an internet connection and the user has a unique username and password to access the data. This feature is very handy when it comes to businessmen and people who work from home.

  • Security:

SAAS offers data loss protection where the secure data is blocked and protected from leaving the user’s system. Service providers maintain research centers where new malware variations are researched and steps to protect against those malware threats are made available so that the service provider would be able to ensure that the customer network is protected by updating the necessary features in the cloud.

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Expersight is a leading market intelligence, research and advisory firm that generates actionable insights from certified experts globally.
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Expersight is a leading market intelligence, research and advisory firm that generates actionable insights from certified experts globally.
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