When the time comes to decide about the type of software to use for your business processes, the choices are narrowed down to two options – SaaS (Software as a Service) and Customized software. But how to know which one you should choose? What will better serve your business purposes? As always, it all comes down to your budget – large enterprises can afford to develop and employ a customized software. On the other hand, Fundera reports that small businesses make up 99.9% of all companies in the U.S. (30.2 million, to be exact).
With these numbers, we can understand why the SaaS business model has been gaining so much traction across the globe. The model is the next best alternative to software development and on-premise hardware.
What is SaaS?
Software as a Service (SaaS) is a distribution model for software. Instead of installing the software on a PC to run it locally, the software is hosted on the cloud by a third-party software provider. The users access it via the Internet through their web browsers. In cloud computing, SaaS is just one type, with other categories being PaaS (Platform as a Service) and IaaS (Infrastructure as a Service). When it comes to building a digital business ecosystem, SaaS has become the go-to solution.
How can users benefit from SaaS compared to customized software solutions?
Ease of Use and Maintenance
Cloud applications bring installation, administration, and maintenance efforts to a minimum because they deploy much faster than customized software. Small-to-medium enterprises can, therefore, gain a competitive edge by speeding up their business processes. SaaS creates value for its users instantly, so they get the flexibility they need to bring in changes when they need them.
Excellent Features and Updates
Maintaining and updating a custom-based software is required as your business grows, and you are accountable for that. Whenever you wish to bring in a new application, you will have to think about ways to connect it, create an original path to follow, pull data in, accumulate it, and analyze. If you don’t want to be bothered with situations like this but be able to tap into your Big Data, going with SaaS will provide you the flexibility you need. The third-party vendor is responsible for overall maintenance, security, and upgrading. Incremental upgrades to the software are typically not charged, except version changes (which may come with a slight added cost.)
Application Costs and Pricing
Minimizing the application costs can benefit the entire business and everyone from the CXO to IT staff. Given the lower maintenance and infrastructure costs, utilizing SaaS applications can free up a part of your budget that your enterprise devoted to IT spending. You can invest the money in other projects while still using fully-functional, secure, and updated business applications. The SaaS option is considerably cheaper because you get all the expenses up front. You will know how much it will cost you to use the software or get specific upgrades when needed.
Custom-based software solutions are tailored specifically for your business. They are scalable and flexible to your enterprise and fulfill their unique requirements. However, SMBs can find it expensive to build, deploy, and maintain. SaaS applications, on the other hand, are cost-efficient and offer you the platform and features that evolve.
Tags: saas, custom-based, cost, updates, Simplicity and Effectiveness
Author: John Turner