Explaining The Basics of SaaS

As technology has advanced, the cloud has made various service offerings possible that would previously have not worked at all. One of these is Software as a Service (SaaS), which is a concept that has gained increasing popularity in recent years as consumers, and developers, have become more aware of the benefits that it provides.

So What is SaaS?

SaaS is essentially a new way of accessing software that calls upon the consumer to pay a regular subscription fee, rather than purchase a software outright. The software and related platform are usually hosted in the cloud and provided via the internet, with the user only needing to log in to the service from whatever portal is provided in order to access it.

Examples of SaaS services include Office 365, which Microsoft have been touting fairly heavily in recent years. Even movie streaming sites, such as Netflix and Amazon Prime, are considered SaaS, which demonstrates just how pervasive this technology and methodology has become in recent years.

How Does it Benefit Businesses?

The clear benefit of SaaS to a business is turning a previously single purchase of software into a subscription model, which usually results in the company earning more revenue over time while allowing them to present a smaller initial price of investment to the consumer.

Of course, to retain the subscription, the business must commit to providing high quality across the SaaS model. It is no good to release a SaaS software and then stop supporting it immediately, as consumers will rightfully feel that their subscription money goes to waste once newer technologies and ideas come along.

Look at Netflix again as an example of this. The company popularised online movie streaming, which leads to a slew of competitors. Instead of resting on its laurels, Netflix not only offers continued updates to its platform and rating systems but also produces its own television and movies while securing rights to many more shows. It’s a constantly evolving service that runs in-line with the subscription that users pay, which means users are more likely to continue paying.

Where Do Consumers Benefit?

Some may look at the subscription model and understandably be wary, as it means committing to a piece of software for a long time and potentially paying more over time for it than you would an off the shelf, single purchase offering.

The key difference between SaaS software and those one-time purchases is the immediacy of updates. When subscribing to a SaaS platform, you not only gain access to the platform as it stands now, but you also get all of the updates that the platform undergoes as it evolves.

Consider Microsoft Office 365. That SaaS platform will now offer users access to every new update to Office, as and when it happens, at no extra cost beyond the regular subscription. Previously, users would need to pay a large fee for the current Office package, only to find that it had gone out of date within a couple of years, necessitating further upgrades or sticking with the old in an effort to save money.

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