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Software as a Service or SAAS
The new business model of SaaS also fosters the creation of a closer relationship with customers as it fosters a more dynamic interaction and ongoing dialogue between ISV and users of the ISVs application compared to the old one-time sale.
Many of these same SaaS benefits that accrue to an ISV will be reaped by their clients in the form of operational efficiencies, lower costs, and better performance. But the savvy ISV taking advantage of an enabling partnership gains the ability to devote their expertise to their core business—software development—rather than operating and delivering it.
This allows core assets and resources of the ISV to be leveraged strategically for growth that can be more appropriately targeted at high value-add contributions that will service customers most—by enhancing software value, rather than on infrastructure and peripheral business purposes associated with the on demand model.
Additionally, one of the most sought after benefits by ISVs is the ability to discover a new, more consistent, and recurring revenue stream. Within a SaaS model, ISVs are provided flexibility to craft solutions for varying companies’ business situations. This can mean serving the needs of companies who might otherwise have been unable to deploy, manage, and maintain their own IT infrastructure for a critical application, opening up entirely new markets of opportunity.
Benefits to End Customers
What are these benefits
SaaS saves money:
A recent study found the total cost of operating an on demand software package is 50% less than implementing and managing an on premise solution.
Quick implementation:
With SaaS, software can be deployed in days and weeks, rather than months to years with traditional license-and-install software.
Scalability:
By outsourcing application infrastructure, companies are able to scale according to their partner’s operational capabilities, which are designed to accommodate the growth of business by orders of magnitude beyond their own. This allows rapid and seamless platform extension, geographic expansion, and worry-free bandwidth growth to support your business needs.
SaaS allows greater IT department focus:
With SaaS, they can offload the delivery and maintenance of software applications to their enablement partner, allowing internal IT and engineering to focus on strategic initiatives. The SaaS firm invests in the technology, hardware, and ongoing support services, freeing the customer from those expenses.
SaaS is a lower risk alternative:
Small and midsize companies live in fear of the failure rates of large-scale ERP and CRM implementations. With SaaS, the expense and risk of implementation are greatly reduced, and the return on investment is greatly improved.
Application Security:
The SaaS model provides end users access to highly qualified security professionals and technologies for monitoring and response to network and application breaches and attacks.
Finally, SaaS produces healthier relationships:
The SaaS provider earns its return over the term of the relationship, rather than front-loading costs via a license sale. There is tremendous incentive for SaaS provider to continually improve their offering as well as their customer service.
The business case for customers is compelling, especially strong for small and midsized businesses, which lack the infrastructure, depth of technical and business experience, and buying power of larger enterprise organizations. That’s not to say larger enterprises are not interested in SaaS—they most certainly are, and are exploring SaaS with full vigor. Recent research points to a significant percentage of enterprises that are either using SaaS already or considering SaaS.
It’s natural that during lean times both ISVs and their customers have begun to search for options to create new opportunities. Price cutting and underbidding is not the answer.
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