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Top 7 Business Benefits of SaaS Versus Traditional Licensed Software

August 26, 2016 Jim Iyoob

Software as a service is an alternative to traditional licensed software installation in the business environment where the end users create the server, install the applications, and configure all the platforms. SaaS clients do not buy software. Instead, similar to a rental, they are authorized to utilize it for a defined period and pay just for the software they use.

  1. Favorable adoption rates: SaaS applications have higher approval rates and lower learning curves because the software is available through standard web browsers. This is significant given the high cost of on-premises software development and implementation versus the low entry cost for SaaS. Businesses don’t want to invest capital in custom developed or off-the-shelf software that users won’t adopt.
  2. Pay for usage: IT organizations often overestimate end-user software utilization, such as forecasting an active end-user community growth to 10,000 employees for a particular application when it only grows to 500 employees one year later. Software as a Services enables corporate buyers to pay for active users instead of the forecasted user community.
  3. Simpler upgrade process: SaaS vendors manage updates, feature enhancements, and new releases by deploying them to the hosted applications centrally. This process eliminates the need for clients to upgrade applications on end-user desktops. SaaS vendors typically deliver several minor automatic upgrades alongside two to four major updates annually. In this way, SaaS-based applications users can be confident that the software provided by the vendor is always the latest version.
  4. Scalability and integration: Some SaaS applications support end-user customization. APIs allow connections to internal applications such as CRMs or ERPs as well as to other SaaS vendors. A notable aspect of integration is automatically sending field written orders to the ERP. It enables salespeople in the field to check inventory, write the order, obtain customer approval, submit it and get confirmation, all in front of the client within minutes. As customers scale with a SaaS vendor, the need for software licenses or investing in server capacity is eliminated. Just modify the subscription.
  5. Time-to-market: The Software as a Service vendor provisions the network infrastructure, software, and hardware at the data center narrows customization of the SaaS applications user interface and features. This restriction eliminates delays for internal IT organizations to deploy, enhance, or develop the application.
  6. Work anywhere: Users can access software via mobile devices wherever they are connected because it is accessible over the internet and hosted in the cloud. The ability to access the data and software when salespeople in the field need it can mean the difference of a sale.
  7. Lower total cost of ownership: The unknown cost to deploy and operate licensed software is a common criticism of licensed software. However, the total cost to run a SaaS application is predetermined. Software as a Service vendors bundle software, hardware, and support services such as business continuity, implementation, help desk, training, upgrades, troubleshooting, and security into a single fee. The result is knowing the overall total cost of ownership in advance.

The SaaS software industry is advancing rapidly. In fact, point solutions will continue to fill gaps in the marketing and sales continuum.

This blog post was first published on LinkedIN