The SaaS Business Model
The SaaS (Software-as-a-Service) business model has emerged and grown in the last few years as the availability of real-time resource provisioning has been made possible by advances in cloud computing. Meeting your company’s software needs with software delivery vs. acquisition lowers initial cost and reduces the daunting expenses that come with enterprise software licensing.
Why Enterprises Benefit
- Reduced Total Cost of Ownership – There are fewer up front expenses which lead to SaaS being a better choice for companies that are trying to reduce and better manage costs. Additionally, the economies of scale add to lower costs over the span of ownership.
- Faster Deployment – With the SaaS business model, the software’s installation as well as configuration is much faster and in some cases, instant.
- New features are quickly installed – Release management is performed by the host company and leads to very minimal impact on the availability of the application.
- Reduced costs for human resources – The SaaS business model removes the need to hire additional IT personnel that are skilled in database, system administration, and business intelligence. Therefore, it saves the company money both in benefits and in salary.
- No need for additional hardware – The company that is hosting the software (service provider) procures the needed hardware for hosting and delivery.
- Increased ROI and productivity – Since there are faster deployments and reduction of total cost of ownership, the SaaS business model shifts the burden of successful management and deployment from the company that is employing the services back to their vendor. This improves the productivity of the user by increasing the security and reliability of the application.
In today’s economic climate, companies are looking for ways that they can cut the costs of their business and become more efficient. Utilizing a SaaS business model is a key strategy that a company can employ to gain a competitive edge over their competitors.
A great resource for more information about SaaS and how it can benefit your organization is Apprenda. They have been at the forefront of the SaaS industry and understand the vertical. Apprenda can lend helpful insight into ways to be more efficient while containing costs and moving to a SaaS model.
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