SaaS Is Transforming the Tech Industry
For application developers who embrace the transition, this is an age of enormous opportunity. And for those who keep SaaS at a distance, a time of impending doom.
This change, while not always easy, is happening for good reason. Namely, Software-as-a-Service is better for your customers. And it's better for you, too.
The cloud revolution is here; we are living it.
And just like computing revolutions of the past, the cloud will make new technology giants of some. Others — the ones who don't evolve — won't make it.
SaaS reshapes the traditional business model in a single sweep — how software is built and maintained; how it's priced, licensed and sold; and how it's used and consumed.
Fortunately, this change actually benefits both software vendors and their clients in several ways. So, even though it may seem a daunting transition, in many cases the advantages are far too valuable to ignore.
SaaS spending is in the midst of a major, worldwide growth streak.
In recent years, SaaS-related spending in the IT industry has increased exponentially, a trend that's predicted to continue into the foreseeable future.
Here are a few impressive SaaS growth statistics:
- Through 2020, spending on cloud computing is expected to grow at more than 6 times the rate of IT spending alone.
- Market research by IDC, predicts that global spending on public cloud computing will increase to $162B in 2020 (from $67B in 2015), a compound average growth rate of 19%.
- A study by Deloitte Global predicts that by 2021/2022, IT-as-a-Service will count for more than half of all IT spending.
Now that we've established that SaaS is, indeed, a big deal around the globe, let's get into why the cloud delivery model is so powerful .
The ways SaaS makes business better for everyone:
Adding companies and users to meet demand is fast and easy.
New users can be up and going in a few days with no on-site implementation required.
The same is true of updates and upgrades. They can be rolled out quickly with little to no effort required for the end user.
Fewer Hassles + Better Accessibility
Many of the burdens associated with other delivery methods are alleviated (e.g. the traditional, ASP/MSP hosting, and grid computing models).
Plus, your team and users can access the application anytime, from any device and location with an Internet connection.
Reduced Support Costs
Also included in the predictable fee is 'round-the-clock access to technical support.
With continual monitoring and updating, your application will run smoothly all the time, and large, unexpected support fees are no longer a worry.
Subscription/Per User Pricing
The SaaS pricing model reduces the capital burden of common on-premise applications for both you and your clients.
The predictable fee is precisely callibrated to keep your revenue-to-cost ratio steady.
It includes ongoing upgrades and use of the Wizmo infrastructure, negating the need for you or your clients to invest major sums in software or hardware upgrades ever again.
Scalable & Predictable
Add or subtract users without having to procure new hardware or other infrastructure components.
Your revenue-to-cost ratio stays consistent, so your income remains predictable. Delivery expenses grow proportionally to your revenue.
And, while the recurring revenue may be initially smaller than the traditional model, a solid rate of retention can greatly exceed the total revenue per customer.
With your application delivered online instead of on-premise, it is suddenly accessible to entirely new types users.
Global markets suddenly become far more accessible, since no one on your team is required to travel in order to set-up and configure software for new clients.
Additionally, apps that traditionally have only worked on a Windows-based machine can be delivered to Macintosh devices without having you to recode a thing.
To evolve or expire?
Hopefully by now, you've figured out that transitioning to SaaS is the unavoidable future for application developers today. If, that is, they'd still like to be application developers tomorrow.
SaaS is here. SaaS is better. The advantages for both software vendors and their users are clear and compelling.
And so the next question becomes, not is SaaS right for my software, but is my software right for SaaS?
We'll talk about that next.