About the SaaS business model

Cat Mules

Cat Mules

Related Topics
cloud transformation SaaS

How does it work? How does it differ from other models?

Here’s a fact: 95 percent of strategic business leaders have adopted sophisticated Cloud services. The huge influx data is re-energising the modern business world post-Covid, and will continue to do so.

The software-as-a-service model – SaaS – is becoming mainstream as almost all industries are making use of Cloud services. Even the IT companies who once sold standard software are embracing the Cloud phenomenon.

You don’t have to go far on your IT travels to come across the term Software as a Service (aka SaaS). It’s the preferred business model of today – with more than 40% of the total public Cloud service revenue, most enterprises are running their operations on it.

Alexandr Basan, Head of Product at Umbrellar, states that companies use Microsoft services to offer their products increasingly on a subscription basis, unlike the traditional business models that were based on selling software licences. MyCSP is a SaaS solution which helps to shift mentality from traditional business to a subscription based model. So, what is the engine of SaaS that is making even the biggest players adopt it?

SaaS – A quick history

When the internet firstbegan, users accessed it  signing up to an Internet Service Provider – an ISP. In early 1998, SaaS entered the digital marketplace. Some Citrix Partners spotted an opportunity to combine the internet with another technology – the Windows terminal servers. They became the first Application Service Providers – ASPs, and the first model of SaaS was born.  Companies now had in-house systems by which they accessed the company data and applications, stored on a central server.

Salesforce was the first leader to go ‘all in one SaaS’, and how far it has come! /Process.st

SaaS has been gaining popularity ever since, and the types of SaaS have enhanced in creative diversity. Email, bookmarking and photosharing were some of the first apps used by consumers, but today customers can just as easily enjoy software for recruiting, billing and customer relationship management. Gartner foresees the global SaaS market as reaching $364,062 by 2022 – that’s double the revenue of PaaS and significantly more than IaaS.

Defining SaaS

Software as a service (SaaS) is a software licensing model enabling ready-to-use applications. Software is provided on a subscription basis, with the software located on external service. Typically, users access SaaS through a web browser via the Cloud.

SaaS is the most commonly utilised option for Cloud businesses, who use or deliver applications to their own customers, with the software mechanics managed by a Cloud Service Provider (CSP).

With configuration and upgrading covered, human resource, time and hardware costs are eliminated for customers.

Where SaaS and the Cloud intersect

Have you ever encountered issues such as software glitches, problems with usage or integration? No doubt – most software-users have.

Service delivery has changed generally with the Cloud, and not least Software as a Service. It’s another reason to use SaaS: companies which employ it receive the latest versions including best practice, samples, help and automatic upgrades. With SaaS also, users can test out the features they want before they start paying, and also request specific customisations.  With SaaS, the provider takes care of the server, the customer can focus more truly on their own customers’ experience – having consistent and automatic updates make it more possible for companies to retain and acquire customers.

Cloud computing shapes value creation for enterprise software and associated business models. SaaS is often accessible through both a web interface, as well as in application-mode on computers and mobiles. Compared to the traditional model of software that requires users to pay high fees for upgrades, the cost of staying in tune with SaaS is significantly lower.

SaaS is different to IaaS and PaaS

Infrastructure as a Service is a fully self-service method of highly scalable and automated compute resources. Instead of having to buy hardware outright, businesses purchase resources on-demand and as-needed.

Platform as a Service provides Cloud components to software while being used mainly for applications. Developers use and build upon the PaaS framework to create customized applications.

Basan explains that SaaS continues to lead the market because it allows businesses to create intellectual property value in their specific areas, and overall cultivates the entire customer experience.

“There are thousand of articles about the big difference between SaaS and IaaS, what to choose and why you should use one or another,” Basan says.

The talk is largely unnecessary though – “It’s cheaper, easier, less hassle to setup SaaS entity than to build everything from scratch,” Basan advises. “While on rare occasions the flexibility offered in PaaS and IaaS is preferable, 99% of businesses don’t need it for their software.”

“You don’t have to worry about anything technical with SaaS. Hosting, platform maintenance, updates, security – all of those things are not what you have to worry about.”

Recreating the nature of work

There are some important capabilities regarding to the SaaS market. The list is extensive: workforce management, customer analytics and satisfaction, financial insights, automated result tracking, and Cloud integration expertise. SaaS gives users the full effects of the business game, changed with Cloud computing.

Users get a common platform for Cloud-based SaaS. They can easily manage their supply chains, understanding and collaborating with each other.

At the basic level, software that is not on the Cloud will be limited in its capabilities. The ‘networked approach’ will be less possible. After all, information or business process sharing between your vendor and participant ecosystem won’t be as fast or cheap.

Best practices for SaaS – Be ready to embrace innovations!

Dependencies are part and parcel of SaaS. You’ll always rely on your providers to be up-to-date.

Many of our Partners offer their own bespoke and packaged SaaS systems. From data analytics to business processes – you’ll find a wealth of software offerings, each one serving a different purpose for your business need.

Umbrellar’s original MyCSP platform is a curated pathway onto Cloud Software. It has been designed by drawing on repeated evidence of what works to help customers of all shapes and sizes on their business journey and save them the time, money, and other challenges they may otherwise face.

MyCSP Demo - Microsoft CSP powered by Umbrellar - YouTube

Umbrellar’s MyCSP portal is an e-commerce engine that simplifies the Cloud management process. / Umbrellar

Designed to facilitate collaboration in the Cloud Solution Reseller network, its key mechanisms are to simplify the experience and help businesses and Cloud Service Providers procure and resell Microsoft Azure, Microsoft 365, Dynamics 365 and Azure Stack.

Basan explains how MyCSP has been a long-overdue change in industry’s Cloud usage:

“Historically it’s not simple to buy something from Microsoft through CSP model – MyCSP made it simple. We save our partners and customers hundreds ours of work by giving them a simple and easy system to purchase and manage products, optimize their billing, provide automation and add value on top of their services. We guide them through business paths and help them to save money every day.”

What is the future of SaaS?

In a world of advancing compute capability, the benefits of SaaS are by no means limited to process efficiencies. SaaS technology is omnipresent – increasing both operational and innovational benefits.

Overall, SaaS increases productivity –  and with that, has come ease of access. The future of software as a service will be even more mission-critical. It will address even more vital issues, such as which customers will be retained – and which will churn.

SaaS will also be more closely linked to Partnership-based cross-selling practice to help businesses and causes of all types and varieties grow. All you’ll need is the right Partnership in place to help make it happen.

Cat Mules

Cat Mules

Umbrellar's Digital Journalist, coming from a background in tech reporting and research. Cat's inspired by the epic potential of tech and helping kiwi innovators share their success stories.

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