Should you develop a SaaS application? That question is very valid, because today, SaaS products are everywhere, and they are very profitable too. Just look at Microsoft, Oracle, and Adobe. Some of the world’s leading companies have adopted the SaaS business model, so should you?
Today’s blog is all about the SaaS business model. The advantages, disadvantages, and some tips on how to develop them. We have already made the following video covering this topic:
First of all, let’s make sure that we are all on the same page here. What is a SaaS application? Software as a Service, or SaaS, is a type of cloud-based software where customers are able to rent the use of an app and connect to it, usually using a web browser. A SaaS product does not have to be downloaded or installed because the underlying infrastructure and app data are stored in the service provider’s data center. GitHub, Slack, and Trello are some examples you might be familiar with.
Advantages for customers
With that in mind, a customer doesn’t necessarily buy a SaaS product, they rather buy the right to use it for a limited period of time. The subscription pricing model is commonly used, and we have already made a blog post covering that pricing model. One benefit that I mentioned in that video is that subscriptions lower the entry barriers for customers, and that is also one of the benefits of SaaS products, as seen from a customer’s point of view. It’s just cheaper to get started with subscriptions than a one-time payment!
Another benefit lies within the cloud itself. Since you do not download a SaaS product, customers can use it anywhere, with any device that is connected to the Internet. There are no download or setup time delays, just log in and start!
Advantages when developing a SaaS application
Great, but what about the developer’s point of view? When you begin to code a SaaS app, you can have a lower initial cost because you can leverage cloud services from Amazon, Microsoft, or Google to host your product so you don’t have to invest in hardware.
These providers also make the application very scalable and flexible, you can simply tell them to increase your computing power as you face a higher demand for growth or seasonality reasons. This does not come with any unnecessary overhead costs and can be done pretty quickly. You can then fully capitalize on the high demand!
Disadvantages and solutions when developing a SaaS application
Now, there are also some important disadvantages and challenges we need to consider. If you really want to develop a SaaS application, I also have some solutions to share. One issue is that you have to code a lot of functionalities to facilitate all kinds of users. That can easily take a lot of time and effort. The solution to that problem could be to integrate with third-party products instead of coding everything yourself. For example, some products might benefit from having a sophisticated map function. Why code such a feature yourself, when you can simply integrate your product with Google Maps?
Another third-party solution you can use to save significant time and money is a special type of SaaS product called LaaS, Licensing as a Service. Cryptolens offers such a service! Instead of coding your own software licensing system that controls who has access to your application, you can use Cryptolens.
A final remark on continuous improvements
My last remark will be a bit broader than both the developer and customer perspective. The process of continuous improvement is a commonly used term within business management that refers to the ongoing improvement cycle focusing on employee involvement and customer enjoyment.
The SaaS business model makes continuous improvements easier since you have greater access to usage analytics data. You will then know exactly what features your customers are using in real time, and you can focus on enhancing the features your customers love the most.
Thank you for reading, stay smart!