Industry Analyst & Strategist
Cloud based software is changing the way small and midsized companies do business. For many, the benefits are a no-brainer; the right technology can mitigate operational expenses and exponentially improve business productivity. For others, however, hesitation exists due to the size of investment and concerns around the safety of data.
Regardless, traditional IT systems are slowly moving over to the cloud, with Gartner noting that 28 percent of spending within key enterprise IT markets will shift to the cloud by 2022. That translates to $1.3 trillion in IT spending that will be directly or indirectly affected by this shift to cloud.
Software-as-a-service (SaaS) is responsible for a large chunk of this cloud movement. SaaS solutions alleviate the burden for users to maintain physical servers. Businesses that access software via a subscription bypass a lot of issues and challenges facing those that opt to install software directly on physical computers and systems.
SaaS solutions ooze simplicity. Residing in cloud environments, they are inherently scalable and easily integrate with other SaaS offerings. Traditional models require businesses to buy additional servers and software. SaaS, however, is as simple as choosing a provider, who then owns the responsibility of capacity planning.
The prevalence of SaaS applications is undeniable. Almost everyone is aware of Salesforce.com and it’s wide range of CRM products. There are hundreds? thousands? of other standalone cloud-based services offered by a variety of third-party providers which offer out of the box, point-to-point solutions. Both options enable the seamless flow of data between systems and applications.
Perhaps one of the biggest benefits of implementing a SaaS solution is that it allows “the experts” to handle things that businesses currently do, but shouldn’t. This, in turn, frees up time and resources for business to make the business model more efficient. Workforces now have the option to perform daily tasks without cumbersome sub-tasks related to software, hardware, and maintenance.
SaaS solutions are constantly updated, packed with new features, and optimized, removing the need for businesses to do this themselves—manually and expensively. Instead, SaaS solutions automatically trigger updates, upgrades, and new features and functionalities almost instantaneously. Businesses operating under traditional models probably don’t realize they are the middle men they desperately need to cut out. SaaS disintermediates to enhance both efficiency and security. Bugs are fixed automatically; data becomes more usable; systems become more seamless.
Compared to the traditional model, SaaS hardware and software license costs are typically lower. Granted, the pricing is typically done on a sliding scale directly tied to number of users or other differential factors.
Even so, maintenance costs are also much lower with SaaS vs. traditional models. In the former, the providers owns the environment, sharing the costs among the customer pool tapping into the solution. In the latter, the business is solely responsible for all hardware and software maintenance costs alone.
The result is greater control. SaaS pricing is pretty straightforward; essentially, you pay for what you use. Traditional models must factor in “hiccups”, including tech problems and the resources it will require to fix them. Since the business has full responsibility and ownership of its own hardware, software, and IT staffing in that scenario, it can be much more difficult to scale in a cost-effective manner—or to plan for the unexpected.
The reality is that business growth now hinges on the speed by which businesses adapt to technological change. SaaS makes this simple and cost-effective. Early adoption of the right SaaS solutions for your business are critical to retain greater financial control and free up resources to focus on business growth.