A Very Quick Guide to SaaS

Get to know what a SaaS is and if it is the model your business needs.

A Very Quick Guide to SaaS

By now it is extremely likely that you have heard the acronym SaaS. If you are reading this, it is even more likely that you are considering getting more information about it, whether to improve your business or just to check the options out there. Either way, we are here to help you get clear on what a SaaS is and what are some key things you should know about it.

SaaS stands for Software as a Service. This is a relatively new method of delivering software, in which end users only need a solid internet connection and a web browser. With SaaS, the providers centrally host the product, and they take care of updates and support. This also means users do not have to worry about hardware or installation issues, like it would happen with on-premise software.

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For businesses, SaaS is a practical solution, especially now that the needs of clients evolve as quickly as technology and their needs and expectations change with them. This method allows these businesses to respond quickly with updates and changes as soon as they are needed, and not when the next version is available in stores, when users would have to pay for it again.

And that happens to be one of the main characteristics of SaaS: how users pay for it. Instead of a one-time fee payment like in the early 2000’s when you used to buy your Office bundle or your Adobe Suite, with Software as a Service you use the product through a subscription model. This way, users have a more flexible way to pay for the software and use it monthly (or yearly), and if they stop using it, they can simply stop paying for it.

But there is a little more to say on that subject. If your business is trying to start a SaaS, you will have to consider pricing models. Are you going for the freemium model, in which users can have the basic features for free, but pay for a subscription if they need more than base level? Perhaps you are considering a single flat-rate pricing. You could also go for tiered pricing if your software will count with different levels of complexity. Or maybe consider per-user or usage based pricing models. This is to say, there are lots of options and it is important for you to understand them and choose the one that makes the most sense for your business, taking into account that typical SaaS can take up to two years to break even, according to PwC.

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Finally, you should know what type of SaaS you are interested in building or acquiring. There is packaged software, which takes the largest bite of the SaaS market and focuses on handling specific business processes, like Hubspot. There’s also collaborative software, that basically explains itself, and lets people work together either through shared documents or messaging or project planning. Think of something like Slack. And there’s also enabling and management tools, which may be the tools to help create other SaaS tools, or that let monitor and test these latter ones. Cloudsponge could be a useful example.

So there you have it. A very quick guide to SaaS. Is it the perfect software for your business? Would you rather build your solutions using No-Code tools? Let us know on Twitter!