Software as a Service (SaaS) is a software delivery and licensing technique. It works as a subscription-based model that allows users to access cloud-based software online without any restriction of time or location. SaaS applications eliminate the need for on-premise software installation and help businesses achieve operational efficiency.

According to an estimate, nearly 85% of enterprise applications will be SaaS-based by 2025. With millions of customers across the globe, experts predict the SaaS market will grow at a CAGR of 27.5% and reach a valuation of 716.52 billion by 2028. These numbers indicate that a large number of businesses are moving toward SaaS and the trend is likely to continue in the coming decades.

Read this comprehensive guide to understand SaaS in detail and learn more about the benefits of this business model.

Let’s get started!

What is Software as a Service (SaaS)?

As the name suggests, software as a service (SaaS) refers to cloud-based software systems hosted by a cloud service provider. Customers can access these solutions online via the internet and leverage various functionalities on the go.

Unlike traditional software which is installed on-premises, SaaS applications don’t need any installation. Instead, cloud service providers host these applications on third-party servers. By subscribing to SaaS software, a company builds a relationship with a SaaS provider and gets partial or full access to the software features. Besides, users can also change or cancel the subscription at any time depending on their business needs.

Software as a Service (SaaS) vs. Cloud Computing

While SaaS and cloud computing might look similar, they correlate to each other and differentiate a little bit. Generally speaking, cloud computing is a broad set of computer services while SaaS is one of its subsets.

In other words, cloud computing covers Software as a Service (SaaS), Platform as a Service (PaaS), and Infrastructure as a Service (IaaS). By subscribing to the SaaS model, you get access to a specific portion of cloud computing limited to cloud-based software systems.

Some of the common examples of SaaS applications are Dropbox, Microsoft 365, Google Apps, and Sales Force.

Why do Companies Need Software as a Service (SaaS)?

Entrepreneurs often ask why move toward the SaaS model when they can install applications on their systems. This is a common question, let’s answer it by discussing the key benefits of SaaS applications over traditional software systems.

1. Accessibility

You can access the software installed on your computer as long as you are using that device. The moment you go away without carrying your PC or laptop, you cannot access that software. This limited accessibility makes it difficult for managers to use their applications remotely.

On the other hand, Software as a Service (SaaS) solves this challenge by enabling users to access these applications anytime, anywhere over the internet. Since these are cloud-based solutions and hosted online, you don’t need to install them on your device.

Instead, just connect your device to the internet and log in to your account, and you’re ready! This way, universal accessibility makes SaaS applications very useful and productive.

2. Cost-efficiency

On-premises software installation is not an easy task. It required a lot of time and specific expertise to install and maintain traditional software. Most importantly, you need a large capital to cover initial setup costs, maintenance expenses, and support rates.

However, when you purchase a SaaS application, you can significantly reduce the costs related to software installation, maintenance, and support. The total costs of ownership for a SaaS application are much lower as compared to traditional software.

Besides, your SaaS partner is responsible for all tasks related to the software update, maintenance, and feature management. You only pay for services you need as per your organizational requirements. Particularly if you are establishing a startup and don’t have enough resources or expertise, go for the SaaS business model and serve your customers with ease.

3. Scalability

Every software has limited features that users can access at a predefined price. However, as your company grows, your business requirements also change with time. As a result, you don’t have any other option than buying new software which can be costly.

Contrary to this, SaaS applications are scalable as companies can expand them if required. This means you can scale up your SaaS software to meet the ever-changing demands of your customers anytime. This way, you don’t need to procure expensive hardware or infrastructure; instead, you can upgrade your pricing plan and get access to advanced features at a fraction of the cost.

Eventually, you can expand the applicability of your SaaS platforms without stretching your budgets. Even your team members don’t require any additional training when you subscribe to premium features.

Final Words

Software as a Service (SaaS) has become a trending subject in today’s highly competitive digital landscape. Businesses of all sizes are rapidly moving towards the SaaS business model to improve their organizational effectiveness and stay ahead of their competitors.

SaaS applications are user-friendly, scalable, and universally accessible. You can access your desired features online and perform various functions without installing the software on your device. Moreover, SaaS applications are fully customizable and can be personalized as per organizational needs.

If you are considering shifting to the SaaS business model and searching for a reliable SaaS partner, contact Khired Networks today. Our best-in-class SaaS applications are available at the best price that meets your business needs.

Get in touch with us today for more information.