With the advent of cloud computing a few years ago, software delivered as a service instead of as a license is all the rage today. Find out why!
Numbers Don’t Lie!
Since cloud computing has become prevalent and accessible for all sizes of businesses, vendors of all kinds of solutions have been quick to take advantage of its power. According to industry analyst Gartner, software delivered in the cloud, instead of on-premises, created a global revenue of $ 85.1 billion in 2019. This number is a 19% increase from the year 2018 and shows the keenness of industry to adopt this new, powerful platform for business purposes. In fact, according to Statista statistics, over a third of all cloud-computing revenue comes from software as a service.
A New Dimension of Computing!
For a business world where early adopters are a small minority, this number is awfully large. This data proves the reliability and viability of cloud-computing delivered solutions and should pique your interest as a business keen on maintaining a competitive edge. SaaS delivered solutions have many advantages over licensed solutions such as lower costs, easier operation and increased agility.
Here is a breakdown of some of the benefits of SaaS:
- Lower up-front cost and total cost of ownership (TCO): Since SaaS delivered solutions are most often subscription-based, they don’t charge any up-front license fees. Traditional software licenses also charge an Annual Maintenance Contract (AMC) as a hidden cost, typically around 20% the cost of the license. Hence, the total cost of ownership is lower, with SaaS delivered solutions as well.
- Lower operating costs as well: In the SaaS model, the service provider manages the IT infrastructure that runs the software, which brings down in-house hardware and software maintenance costs as well.
- Rapid setup and deployment: SaaS apps are pre-installed and pre-configured in the cloud. Thus, delays resulting from lengthy traditional software deployment methods are often eliminated.
- Easy upgrades: SaaS providers handle hardware and software updates themselves, and so this workload and responsibility is not an additional overhead for the customer.
- Lower overheads and overhead costs: Traditional licensed software installations typically require both in-house hardware as well as trained staff on payroll. According to a Cloud Technology Partners article, it is estimated that organizations that buy traditional IT solutions have an 80% lower hardware utilization and efficiency rate due to the hardware that they must invest in along with the solution but is not used for anything else. With SaaS, these costs and overheads are completely eliminated as both the hardware and the staff to maintain it is hosted and covered by the vendor themselves.
- Favorable adoption rates: SaaS applications have higher approval rates and lower learning curves because the software is available through standard web browsers. This is significant given the high cost of on-premises software development and implementation versus the low entry cost for SaaS. Businesses don’t want to invest capital in custom developed or off-the-shelf software that users won’t adopt.
- High Accessibility: All that is needed to access a SaaS application is a browser and an internet connection. This is generally available on a wide range of devices and from anywhere in the world, making SaaS exponentially more accessible than traditional on-premise software installations.
- High Scalability: SaaS providers may offer various subscription options, and customers gain flexibility to change subscription packages as and when needed, (For instance, when your business grows, or more users need to access the service.)
- High Compatibility: With the conventional software installation method, updates can require enormous amounts of time and money. Even worse, version discrepancies can lead to compatibility issues and wasted time. With SaaS, however, subscribers can simply log-on to services that are already updated as and when the vendor sees fit, and are right and ready to go at all times.
- Future Proofing and Maintaining a Competitive Edge: SaaS solution subscriptions can be canceled or renewed at any time. Thus, vendor related issues such as the company going under and leaving your business without support for the solution are averted. If a solution fails to be able to deliver, you can just move to another one. There are no enormous wasted license costs. As the wave of the future, cloud-computing delivered software is also set to take over from traditional licensed software almost completely. In fact, according to DevSquad statistics, over 73% of all businesses plan to make all their systems SaaS by 2020. This number shows a trend that must be followed to maintain a competitive edge, and so by purchasing.
- Easier Approvals and Tax Benefits: SaaS is billed as an operational expense (OPEX) rather than a capital expenditure (CAPEX) as no actual capital is being invested in. CAPEX purchases are notorious in the business world for being hard to get approvals for as many considerations must be taken before making a long-term investment purchase. With SaaS, approvals are far easier as C-level executives and managers tend to approve OPEX purchases far more easily. Operational expenses are also non-taxable, which pads your business’ bottom line. SaaS, instead of traditional software licenses, you can be sure to not be left in the dust.
SaaS Adoption is a No-Brainer!
SaaS solutions really are the next-big thing, and in fact, this Next is already Now. There is a clear trend in businesses adopting SaaS only years after its inception, which proves it is as big an invention as sliced bread. Lower total, initial, and maintenance costs, lower overheads, increased flexibility, better accessibility, and rapid deployment are amongst the key benefits of SaaS. Ease of approval and ‘taste before you buy’ are also much improved in the SaaS model. You can be sure to be future-proofed when adopting a SaaS solution instead of a traditional license. It really is a no-brainer!