What is SAAS?
SAAS (Software as a Service) is revolutionizing the way companies work. It is a software or an application that is hosted in the cloud. Customers can access this software using the internet. Today, SAAS has become the delivery model for most businesses such as billing, sales, human resource management, finance management, customer relationship management, etc.
Most of the users prefer moving to the SAAS model as it is easy to access and eliminates the hardware cost, licensing fees, and maintenance charges. This helps organizations leave behind the challenges in implementing software solutions that they need on a daily basis and concentrate more on their business.
Let us say, you have an online comic store that sells comic books on a recurring basis. As a business, you have 2 options:
- To build your own subscription management system, find a payment gateway and integrate with it, abide by different compliances in storing the customers’ payment details. Then, you must either build or connect to a finance team that will help you track orders, generate invoices, refunds, etc.
- Get an online tool/software that will help you automate all of this.
While the first option is achievable, it takes a lot of time, resources and might cost you a lot. It also takes a lot of your time in doing something that is not your area of expertise.
On the other hand, implementing the second solution, allows you to keep your mind off all this and helps you focus on your business opportunities. It gives you the flexibility to access your information from anywhere.
While the term SAAS, might sound like a newly coined jargon, in reality, it is not. SAAS had its roots formed in early 90’s. That is when companies like Salesforce and Zoho started building their products and made it available on the cloud. This revolution was not largely welcomed by companies then, organizations were skeptical of this new change. Over the last decade, the tables have turned. Most companies today prefer implementing the SAAS model to help them run their business.
According to a survey conducted by Bettercloud, about 73% of the companies use SAAS products every day.
SAAS B2B
SAAS B2B software are solutions that help other businesses. Solutions such as subscription management, recruitment software, analytics, finance management are examples of SAAS B2B companies. They make work easier for other companies by automating internal functions. MailChimp, Salesforce, Freshworks are examples of SAAS B2B companies.
SAAS B2C
SAAS B2C companies focus on solving the issues for end customers. Netflix, Spotify, Grammarly are a few examples of SAAS B2C companies. They focus more on what the end customers would need.
Advantages of using SAAS
- SAAS models are a huge boon when it comes to saving time. You get to use the product instantly. All that you will have to do is signup for the product. Ideally, building the same product would have taken days or even months to build depending on your resource.
- It is easy to understand and use. All the companies provide online help or support that handhold you into learning the product.
- There is no upfront hardware or license costs when it comes to SAAS. Most of the SAAS companies offer a pay as you go pricing model. This gives you the luxury to cancel your subscription at any time.
- SAAS tools offer easy integration with other resources, this makes data migration easy for you. For instance, assume that you have a CRM tool that collects the details of all your leads. You also have a help desk tool to monitor support tickets. Let’s say you want your sales representative to be notified every time their lead rises a support ticket. This would end up being a tedious task if done manually. But, when using a SAAS product all that you will have to do is integrate the CRM and help desk solution.
- SAAS companies have a large customer base. This means they constantly develop new features to satisfy the requirements of their customers. You as a user of their product also get to access these features.
- Since SAAS is hosted on the internet, you can access it anytime on the go.
- It makes budgeting simpler
SAAS VS On-Premise (Buy VS Build)
Buy versus Build is an important topic of discussion in every company, especially large enterprises. There is a lot of thought that has to go into this before you decide on what you want to achieve. What works for one company doesn’t necessarily have to work for the other.
While the advantages of using a cloud-based solution are impeccable. On-premise solutions are not going away.
There are a lot of reasons why companies, especially enterprise companies that scale at a large level, would prefer to use an on-premise version.
Here is an example – Assume you have a software solution to monitor your employee’s attendance. The SAAS provider charges you for the number of employees in your organization. For a company that has about 10,000 employees, the cost is huge. Implementing a cloud solution might cost them more than building one on their own.
Next, SAAS products are customizable only to a certain extent. In case you need a feature immediately, it might not be possible. SAAS companies take up feature requests based on their popularity. This means you are going to get the feature until most of their customers find a need for it.
As mentioned earlier, the SAAS market became popular only in the last decade. Most of the companies have started moving towards this approach only in the last 4-5 years. This means companies have already made their investment in hardware. Moving towards a SAAS solution due to hardware costs might not make sense to them.
SAAS Development Life Cycle
The SDLC for SAAS products is very much different from the regular software life cycle. A lot of thought must be put into every stage of the life cycle. A SAASDLC (Software as a service development life cycle) has 5 phases – Envision, Platform/Technology evaluation, Planning, Development, and Stabilization.
Envision
In this phase, the business owner will have to identify the opportunity in the market and decide what problem the business is going to solve. You will have to build the foundation of your business in this phase. What is the business problem that you are trying to solve and how will it add value to the market.
They will also have to decide how they are going to pitch the product to their customers. The long term and short term goals for the product must be decided in this phase. The Business owner will have to find out the current need, decide how to build the product.
Platform Evaluation
Once you have an idea, you need to bring that to reality. Most of the time, that is the biggest challenge. Your vision might be great, but if your team is not able to create it, then you may not be able to achieve what you intended to. The framework and technology that you decide should allow you to add features in the future as your business grows.
The host that you choose plays a crucial role and careful evaluation is essential. The Architecture of the service you are going to build must be compatible with the host that you choose. A roadmap of the features and the technology to be used should be decided in this phase.
Planning
Any software development will happen in phases. This could be due to multiple reasons such as dependency on other features, cost of building the feature, time, availability of the resource, etc. In this phase you need to plan the features that you want in the first sprint and what you’d want to take up later. You need to clearly map your feature requirements, create a project plan, determine and finalize architecture solutions and design requirements, and plan resources.
Development
Source – unsplash
This is where the design and idea are translated into the actual product. Iterations are made on the top of the core architecture. Design is finalized in this phase and the first version of the product is built in this phase. A development environment is set and goes through an iterative process until perfection is achieved. The feature is tested for functional bugs and enhanced with each iteration. Data synchronization is streamlined in this process.
Stabilization
This phase is critical in the life cycle model. This is the phase where you get customers to purchase your product and everything goes well for you as a business. You release the beta version of your product and see how it solves real-time use cases with real customers. Once the product stabilizes, general availability can be announced.
With SAAS constant development is the key, you need to consistently provide new features for your customers that will benefit them. This not only helps in retaining old customers but also helps you gain new ones. Therefore, the envision phase for the next set of features must be decided here.
Top SAAS companies
Listed below are top SAAS companies based on the service they provide.
Email Hosting – Google, Zoho Mail, Rackspace
Website Hosting – WordPress, Wix
Design – Adobe, Canva
CRM – Salesforce, Freshsales, Microsoft Dynamics 365, Zoho CRM
Help Desk – Zendesk, Freshdesk
Campaign – MailChimp, HubSpot
Project Management – Trello, Atlassian, Basecamp, Asana
Survey – SurveyMonkey, HubSpot
Accounting and Finance – QuickBooks, Zoho Finance, Xero
Collaboration – Google, Dropbox, OneDrive, Zoom
Analytics – Sisense, Tableau Online, Microsoft Power BI
Subscription – Chargebee, Recurly, Zuora
Bottom line
According to the prediction of Gartner, the size of the SAAS market by 2020 is estimated to be 75,734.
Today, most small and medium businesses prefer to buy instead of building due to the large costs involved. When it comes as SAAS, work becomes easier for them.
A recent survey conducted by Saas Capital suggests that about 30% of the revenue generated by a SAAS company is spent on development and engineering.
Therefore there is a huge responsibility for the development team. Your developers need to think from the customer’s point of view to make your product a success. They need to stay on top of technology and decide what would best suit your business. Hiring a team to take care of development is a crucial task. All your developers need to have a common vision. This might take a lot of time.
At Crayond, we have an amazing team that will bring your product to life.
No matter who you are – a startup owner, an entrepreneur or an established organization, we help you build products that your customers will love. With the biggest chip, “development” taken from your bucket, you can concentrate on other essentials such as marketing and support.
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Great content! Super high-quality! Keep it up! 🙂
Awesome 🙂