The Pros and Cons of Software as a Service (SaaS)

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The Pros and Cons of Software as a Service (SaaS)
by Marketing

More companies are shifting to the Software as a Service Model, commonly known as SaaS. It is gaining popularity across industries, and there is a good reason why this is happening. The SaaS market has grown 18% annually, with an estimated 90% of companies leveraging at least one SaaS solution. SaaS provides an alternative to standard software installation, including building the server, installing the application, and configuration.

Rather than downloading an app to your device (and regularly updating it), you gain access via the Internet. The organization gains use of this Software for a specified duration or licensed subscription. These software vendors manage the technical issues, allowing users to lean on their expertise. 

There are three types of commonly used cloud services: 

    • Infrastructure as a Service (IaaS) 
    • Software as a Service (SaaS)
    • Platform as a Service (PaaS)

What is the difference between SaaS Software and the Traditional On-Premise Model? 

Most traditional on-premise solutions require end-users to pay for the whole package in advance. Software licenses are usually limited to one user or device, whether it is a standalone purchase or bundled with hardware. To use the app, the user pays once to install it on their device. 

SaaS enables its users to subscribe to the service and pay for it annually or even monthly. The end-user can end the subscription and discontinue use at the end of the contract. Companies often prefer this as it can provide a more open license structure.

Cloud computing is gaining momentum, and more vendors offer SaaS as one of their services. SaaS marketing trends can be an integral part of your business, offering savings and flexibility. The SaaS model can improve marketing ROI and add value to the company. 

We’ve outlined the main advantages and reasons why more and more companies are moving to the cloud below. 

Benefits of SaaS Software 

1. Accessibility

One of the most important reasons companies chooses SaaS is that it can run through an internet browser. Regardless of the operating system, the app is accessible through a URL. 

SaaS is also mobile-friendly. This also means that you can get access to all of your files from anywhere at any time — all you need is user authentication and an Internet connection. 

2. Reduced time to benefit 

The most significant difference between SaaS and the traditional model is that SaaS is already installed and configured. Your new Software is ready for use in a couple of hours once you provision the server in the cloud. This saves time spent on installation and configuration, preventing issues you may face during development.

3. Cost-efficiency

SaaS reduces (and eliminates) numerous costs for installing and configuring an app. Users no longer have to pay for maintenance and upgrades, significantly reducing small business CRM spending. SaaS models allow you to pay as you go; users need to pay only for the Software they are using without wasting resources on unused licensing. If running a small business, the app provider handles the required infrastructure’s complexity. The end-user no longer has to worry about resource-consuming hardware maintenance. 

4. Compatibility 

If you are using a conventional installation method, it may take a lot of money and time to install it. Version discrepancies between team members can cause compatibility issues; SaaS simply enables its users to log on to already upgraded services.

5. Better Collaboration 

Like Google Docs, a SaaS model offers a non-relational database to its end-users. Users collaborate quickly and simultaneously on one document, make comments, and edit, allowing the team’s visibility on changes. Work becomes more productive, collaborative, and efficient (providing a single source of truth for all users.) This collaborative advantage of the SaaS model also allows its users to streamline value-chain communication. This mitigates the need to send documents and files via email, preventing outdated information in your system,

6. Easy-to-use proof of concepts 

Saas comes with “baked-in” best samples and practices, which users can test the new feature or a new software functionality upfront. Users can also have a few instances with different versions, quickly doing a smooth migration. 

7. Faster Innovation 

One of the organizational benefits of SaaS software is its accelerated innovation: it gives its customers more accessibility to technological improvements. All of the upgrades, updates, and bug fixes are executed on behalf of the vendor eliminating headaches end-consumers typically experience if they are in charge of the software maintenance. 

8. Saving and storage 

On the one hand, on-premise data storage requires you to invest in reliable backup options like cloud storage or create another disaster recovery plan to prevent any hardware crash that can lead to severe consequences like a significant loss of data.  On the other hand, the SaaS model allows you to save data in the cloud. This does not only help you store and save a considerable amount of data, but it also allows you to switch between devices without losing data or your work.  All you need to do is log into one account on any device you choose. 

9. Data and Analytics 

Since everything is run through one centralized platform, SaaS allows you to gather data, monitor data health quickly, and provide analytics. SaaS offers easy access to intelligence tools, reporting, and visualization, which provides essential insights into business operations, and allows a streamlined process. This significantly improves your organization’s efficiency. 

The Disadvantages of SaaS Software

While the SaaS model can be an ideal solution for many companies, there are a few downsides to consider. 

1.  Bad Internet connection 

One of the most common challenges — the need for an Internet connection. If your Internet connection is poor, the Software could be unavailable. 

2. Loss of Control

The vendor can manage everything, which causes dependency.

3. Limited Customization 

The app may be limited in the customization of its product for its intended use.

4. Slower Speed 

SaaS solutions may be slower than client/server apps.

5. Security Risks

While the SaaS provider provides high security for the app, businesses should still secure sensitive data.

Bring Your Business to a Higher Level with SaaS Model

Features like scalability, easy access, and lower costs are among the top priorities of businesses in an ever-increasing market. More companies than ever are interested in renting Software instead of purchasing, mitigating risks with deployment, patches, and upgrades with SaaS. The bottom line is that SaaS allows businesses to scale collectively and achieve higher revenues. 

About the Author:
Rick Seidl is a digital marketing specialist with a bachelor’s degree in Digital Media and Communications, based in Portland, Oregon. With a burning passion for digital marketing, social media, small business development, and establishing its presence in a digital world, currently quenching his thirst through writing about digital marketing and business strategies for Find Digital Agency.