Technology has increasingly contributed to changing the way companies operate. According to the report developed by 451 Research, 60% of companies in Latin America will use cloud services in 2019. This includes the private and public sectors. However, many people still wonder if it’s worth it and how to cut costs for SaaS. Our goal today is to answer these questions.
Find out what the SaaS service is, how it works and why it is worth adopting this model in your company’s sales.
What is the SaaS model and how does it work?
SaaS ( Software as a Service ) is a model of operational structure in the cloud (online) offered by a cloud computing resource provider. The system can be standard (model ready) or exclusive, hosted on virtual servers and under full domain of the provider.
Unlike traditional software, the SaaS model is accessed through a link typed in the web browser (Google Chrome, Mozilla Firefox, Internet Explorer, among others). In addition, it is necessary to have a registered user and password to navigate it.
What are the main advantages of migrating to a SaaS sales model?
There are many advantages. So we focus on the most important ones. Find out how SaaS helps reduce business costs and drive sales:
Reduces the need for investments in physical infrastructure
When the company opts for the software as a service (SaaS) model, it becomes dependent on an easier IT infrastructure, since the system and data are hosted on third-party servers. As a consequence, it is no longer necessary to invest in the acquisition of own servers , refrigeration machines, switches, hubs , cables and other physical elements.
In addition to reducing costs with equipment purchases, the company also reduces the space necessary to accommodate them, managing to use it in another way or by giving it to the owner, if it is rented.
The company no longer needs to worry about maintenance
And not only in the investment in acquisitions does the company save. Maintaining the machines and the software itself is no longer a concern. With less equipment in the possession of the company, the volume of services required for maintenance falls, resulting in a great financial economy.
Regarding software, in the SaaS model, the provider assumes full responsibility for the maintenance that, many times, occurs without you even realizing it. In this case, in addition to the financial costs, the company saves labor time with the function.
Updates are at the service provider’s expense
SaaS is a software model that is involved in various types of technology and is therefore totally dependent on updates. Cloud computing , encryption and security resources are evolving rapidly, and the SaaS model needs to accompany the changes, as it depends entirely on them.
In this case, vendors have a rigorous patch management policy (update packages), exempting their company from the feature. This means that it is no longer necessary to buy and download updates . Just trust the SaaS provider.
Eliminates the need to pay for licenses
Most companies that use software hosted on their own servers pay a license to use to the developer, since the property rights remain with it and that is a cheaper means of having the technology.
However, when the company migrates to a sales model through SaaS, it no longer has to have this kind of cost. The company pays only a fixed fee , which is much cheaper than licensing, having its data and systems in an exclusive environment in the cloud.
Reduce costs with specialized labor
If we consider that there is no longer a need to download, install, update and maintain the software, as well as manage the update packages, the hiring of specialized labor becomes less necessary.
Your company may even have its own IT team, but professionals must be relocated for more vital functions , such as online structure management, measurement of service availability and performance, for example. Thus, it helps the business to maintain the quality of the tools and the provision of services via the internet without spending so much.
Helps the company to optimize processes
SaaS model software goes beyond the traditional ones, and helps the company to use the available resources to the ideal extent . This means that waste is eliminated through more optimized processes. For example: when SaaS is adopted, the company has a structure adaptable to business demand. In this way, the business uses only what it needs, eliminating idle IT capacity.
In traditional IT models, this is not possible. The company would have to spend to maintain the complete software, although it does not use it in its maximum capacity.
The company pays only for what it uses
In the SaaS model, payment for services is based on signing a plan with service packages appropriate to the needs of the business . A monthly payment with a fixed value is paid, plus a rate that varies according to the consumption of additional resources and tools. Thus, the company pays exactly for what it uses, nothing more and nothing less.
This allows costs with technology to become fixed and managers to gain predictability in budget control.
Improve business intelligence
With the help of Big Data Analytics, SaaS enables the business to analyze data automatically, delivering more accurate reports on demand projections and trends in customer behavior. This technology helps managers save time and money with testing by implementing strategies with the greatest potential for attraction and loyalty more quickly.
And more: if SaaS encompasses CRM ( Custom Relationship Management ) methods , the company can more easily build relationships with customers and increase its average ticket.
Allows you to generate frequent income
We know that for the client to continue buying, it is necessary to sell products and services with shorter life cycles and that require updates and upgrades . SaaS facilitates this strategy, since it enables the company to create a frequent source of income from the delivery of aggregate services via the Internet.
Products that demand additional services to complement and improve performance make consumers more dependent on the business , which prolongs the customer’s life cycle and reduces the Churn Rate .
Requires a low initial cost
In a traditional model, the company would need to hire a team of developers to design, test and launch the software, in addition to having to pay a series of additional costs, such as updates, maintenance and use license.
In the SaaS model you only have to choose the best service plan and start using it , paying only a fee equivalent to the space, tools and other resources you prefer. This is one of the factors that has most contributed to the emergence of startups and new service models.
If the required initial capital is low, the return on investment (ROI) can occur faster, making the business even more financially viable.
Deliver more security
The SaaS provider also takes care of much of the security of the environment. It uses encryption of data and passwords , preventing this information from being readable if there is a code break and, consequently, an invasion.
Additionally, data and source codes (software structure) earn constant backups , with replicas sent to ancillary servers located miles away. Any accident of loss or damage to data and systems can be reversed in a matter of minutes with access to up-to-date and intact copies.
In the SaaS model, the company is safe against natural and accidental (man-made) disasters . If the Data Center is fatally reached in any way, the provider has another, redundant, to be activated and take action immediately afterwards. This makes the systems always remain in the air, preserving access to data and functionalities.
There are providers that already offer 99.99% availability, which is great for those who sell products and services online.
If you want to have remote work teams and extend corporate functions beyond the walls of the company, the SaaS service will be a great solution. Regardless of the device used (computer, laptop, tablet or cell phone), the pages and buttons adjust to the screen size, maintaining vital characteristics.
Since the connection is online, jobs can be done from home , bank line, during a trip, or other occasions. The fact is, SaaS adds mobility to data and systems, increasing business productivity.
Software as a service models are also scalable. In other words, if the software has an access peak, the server does not crash. Instead, it expands to withstand high demand , reverting to the original size after the access volume. It is an elastic structure.
If the business maintains the new demand standards, it means that it is developing and the SaaS meets the new needs, providing an environment in the correct measure for the company to grow in a sustainable way.
Now that you know how to reduce the costs of the SaaS model, don’t waste more time and money. Start planning your migration today and raise your company’s business level.