Software-as-a-Service (SaaS) has been a go-to software delivery solution for businesses of all sizes for over 20 years. And it’s easy to see why: with a combination of lower costs, easy setup, and being very accessible, SaaS is a savior replacement to the old, problematic days of physically purchasing software.
In fact, 99% of companies will be using one or more SaaS solutions by the end of 2023, according to Zippia. As productive, highly specific problem solvers, SaaS tools support success — especially at first.
But because there isn’t a single SaaS silver bullet, organizations often use many applications to get one thing done ($$$) or choose free or cheap software without considering the potential long-term limitations (😫).
SpyGlass is breaking down SaaS benefits and complexities, the difference between SaaS and the cloud, and how to optimize your software investments.
👉 The SaaS Good News: Efficiency
SaaS efficiency isn’t something to overlook, with a wide range of highly useful and must-have tools. SaaS can make work more efficient in many ways, including:
– Scalability: SaaS applications are designed to easily adapt to demand changes, allowing businesses to add or remove users, features, and functionality as needed, without worrying about infrastructure.
– Customization: SaaS tools can be tailored to fit an organization’s needs, streamlining workflows and reducing time and effort to complete tasks.
– Automation & Collaboration: SaaS automation simplifies repetitive or time-consuming tasks (think automatically generated invoices), while collaboration features allow multiple users to work on the same project or document in real time.
👉 The SaaS (possible) Bad News: Complexity & Cost Creep
SaaS offers many benefits in terms of flexibility and scalability, but as beneficial as these customizable and configurable options can be, they can also:
– Make your SaaS landscape difficult to use and understand;
– And make integration with other systems and applications complicated (think connecting with your existing customer relationship management (CRM) system or accounting software).
Nearly all SaaS is licensed on a subscription model with a monthly fee dependent on the number of people using it and the level of the subscription. Some examples of SaaS collaboration vendor applications include CRM and MA (marketing automation) tools like HubSpot and Salesforce.
SaaS programs charge a seemingly small monthly fee but multiply any fee by the number of apps you use, and costs increase.
If your SaaS costs are creeping up, keep these points in mind for possible savings:
– Underutilization: If you’re not using applications very often, or only using a small portion of their features, look at scaling back your subscription or switching to a cheaper alternative.
– Redundancy: Multiple SaaS applications performing similar functions can be a waste of budget (think Asana and Trello for project management).
– Address changing needs: If your business needs have changed, it makes sense to review current SaaS subscription features or functionality.
👉 Cloud vs. SaaS: Apples and Oranges
They are commonly thought of as one and the same but don’t confuse the use of cloud services with SaaS applications — especially in terms of how they impact your bottom line.
Here are some key differences:
🍎 The Cloud…
– Allows businesses to use various types of software in a collaborative way no matter where their team is located. Some of the most common cloud services include AWS, Microsoft Azure, and Google Cloud.
– Is on-demand and always accessible, much like the internet itself, with resourcesthat include databases, storage, and servers.
– Offers scalability: you can add and remove servers or resources as needed, making it easier to manage demand spikes and costs.
🍊 SaaS…
– Requires a payment to access software applications that are already working and in the cloud. You don’t have to worry about maintaining the software, but you do lose some control over its customization.
– Doesn’t require you to make room for new servers in your office or buy new hardware.
– Is a good option for your business if your computing needs are relatively modest and predictable. You don’t have to worry about having enough computers and servers to meet growing demand. Instead, you pay for what you need, when you need it.