Why A SaaS Model Is Right For You
Business benefits of a SaaS model
SaaS is to business what Netflix is to movies and TV. When you subscribe to Netflix, you don't have to worry about buying DVDs, waiting for them to arrive in the mail, or returning them when you're finished. You just log in and watch what you want, when you want.
The same is true of business software. When you subscribe to a SaaS solution, you don't have to worry about creating or maintaining the software, because that's all taken care of by the service provider. All you have to do is use the software, and everything else is handled for you.
Perhaps the most obvious benefit is that it reduces the upfront cost of purchasing software, since you can pay for it on a subscription basis instead. This can be a big advantage for small businesses or businesses with limited budgets.
Another benefit of a SaaS model is that it's much easier to scale. If your business grows, you can simply add more users or increase your subscription plan accordingly. With traditional software, you would have to purchase additional licenses and install the software on new computers - a much more complicated and expensive process.
Finally, SaaS models tend to be more secure and reliable than traditional software. Since the software is hosted in the cloud, there's no need to worry about losing data if your computer crashes. And since the service provider is responsible for maintaining the software, you can be sure that it will always be up-to-date with the latest security patches.
SaaS subscription model
Subscription models are becoming increasingly popular, not just for software but for all kinds of products and services. The appeal is simple: you pay a fixed monthly fee, and in return, you get to use the product or service as much as you want.
There are two main types of subscription models:
- Pay-as-you-go: With this type of subscription, you only pay for what you use. For example, if you use a cloud-based storage service, you might pay a few cents per gigabyte of storage.
- Flat-rate: With a flat-rate subscription, you pay a set monthly fee regardless of how much you use the product or service. For example, with a flat-rate Netflix subscription, you would pay the same amount whether you watch two hours of movies or eight.
The subscription model has a few advantages over the traditional purchase model. First of all, it's more flexible - users can cancel at any time, and there's no long-term commitment.
Second, it's more predictable - users know exactly how much they 'll be paying each month, so there are no surprises. This means businesses know exactly how much revenue to expect, and can budget accordingly.
Finally, it's more convenient - users don't have to keep track of their usage, and they can be sure they'll always have access to the latest version of the product or service.
So, should you switch to a SaaS model?
A SaaS model can be a great choice for businesses of all sizes. It's especially well-suited to businesses that are growing quickly, or that have limited budgets. If you're considering switching to a SaaS model, keep the following benefits in mind:
Continually refine your product - Choosing a SaaS model for your product encourages you to continually refine your product. This is because you need to keep users subscribed in order to continue generating revenue.
In contrast, if you sell a traditional product, you only need to sell it once. After that, you can continue selling subsequent versions of the product, but you're not as incentivised to keep making improvements.
Make changes based of immediate, live feedback - Another advantage of the SaaS model is that it allows you to get feedback early and often. This is because users are using your product on a regular basis, so you can quickly see which features are popular and which ones need improvement.
You're able to make changes based on immediate, live feedback. This is in contrast to the traditional model, where you would have to wait for users to purchase the next version of your product before seeing how they react to your changes.
Scalability - A SaaS product is much easier to scale than a traditional product. This is because you can simply add more users or increase your subscription plan accordingly. With traditional software, you would have to purchase additional licenses and install the software on new computers - a much more complicated and expensive process.
One example of SaaS scalability is Dropbox. When the service first launched, it offered smaller plans, starting from 2GB. But as more and more users signed up, the company quickly realised it needed to offer more storage.
It now offers a variety of subscription plans, including plans of up to 1 TB. And if a user needs more than 1 TB, they can simply contact Dropbox and request additional storage.
This kind of scalability would have been much more difficult - if not impossible - with the traditional software model. Thus, the SaaS model is a great choice for businesses that are growing quickly and need to be able to scale their products accordingly.
We helped ANZ goMoney with their SaaS project
How to approach the development of a SaaS model product
Pricing - The first thing you need to think about is pricing. There are a few different ways you can price your product:
Pay-as-you-go: With this pricing model, users pay for only the resources they use. This is a great option if your product has a lot of features and users only need some of them.
For example, AWS Lambda charges users based on the number of requests they make and the duration of each request.
Subscription: With this pricing model, users pay a fixed price per month or year. This is a good option if your product has few features and users need all of them.
For example, Adobe Creative Cloud charges users a monthly subscription fee for access to all of its products.
Usage-based: With this pricing model, users are charged based on how they use the product. This is a good option if your product has complex usage patterns.
For example, Google Cloud Platform charges users based on the number of resources they use, such as storage and bandwidth.
The pricing model you choose will depend on the nature of your product and the needs of your users.
Licensing - Another important consideration is licensing. When you develop a traditional software product, you need to purchase a license for each user. But with a SaaS product, you can simply give each user a username and password.
This makes it much easier to manage your users and ensure that they're using the product correctly.
You also have the option of giving users a free trial before they purchase a subscription. This is a great way to let them try out your product and see if it's right for them.
Support - When you develop a SaaS product, you'll need to provide support for your users. This includes providing documentation, answering questions, and troubleshooting problems.
You can provide support through a variety of channels, such as email, phone, or live chat. You'll also need to decide how you'll handle customer service requests.
You can either handle them yourself or outsource them to a third-party company.
Updating SaaS products
Another important consideration is updates. With a SaaS product, you can push updates in real-time without affecting your users.
This is in contrast to the traditional model, where you would have to wait for users to purchase the next version of your product before seeing how they react to your changes.
This allows you to make changes based on immediate, live feedback. This is a great way to improve your product quickly and efficiently.
All of these considerations are important when you're developing a SaaS product. Keep them in mind as you begin the development process.
In summary, the SaaS model is a great way to develop a product. It's scalable, easy to manage, and provides users with the flexibility they need.