Access Intelligence – Why a SaaS provider is a good investment
Software-as-a-Service (“SaaS”) solutions deliver on-demand access via the internet to a single application, shared across multiple users.
In effect, a SaaS solution greatly increases the efficiency and flexibility in the way a computer program works; removing the need for access to an entire piece of software to be run from a user’s machine. Instead, software is centralised in a more powerful delivery structure from one location and one version, allowing users to access functionality in real-time via an internet connection from a chosen device, anywhere in the world.
This has a number of immediate benefits to both the end user and the software vendor, primarily the elimination of the need to install and maintain the software, as is commonly associated with desktop installed products. Furthermore, they replace the upfront licence fees and lengthy implementation cycles of traditional installed applications with a “pay-as-you-go” subscription based service.
Benefits for End Users
- More Frequent Software Upgrades: The SaaS model allows updates more regularly and at a far lower cost than traditional software companies.
- Lower Total Cost of Ownership (TCO): The reduced overall cost of delivery, ie. Maintenance costs, licence costs and distribution costs, ensure that margins are far higher at a lower price point than through a traditional legacy or desktop model.
- Higher Level of Service: Customers benefit directly from higher levels of immediate support and responsiveness; this is due to the SaaS model’s subscription format.
Benefits for Software Vendors
- Revenue and Cash Flow: Customers pay for software by subscription rather than buying a licence, resulting in more predictable future revenue streams and cash flow. The immediacy of purchase also allows rapid visibility of emerging customer bases, providing evidence for strategic development.
- Scalable Delivery: SaaS Software can be distributed, via the internet, to new customers at almost no extra cost to the company.
- Highly Valued: Thanks to capital efficiency, high profitability and the lock-in effect, SaaS companies have a real advantage in the technological marketplace.