Access Intelligence – Why invest in Saas
The software market is transforming to create new and sustainable opportunities for investors. Software-as-a-Service (“SaaS”) is where software is provided and accessed via the internet and shared across multiple users. It fundamentally changes the relationship between a customer and software because it relies on access rather than the user needing to own the product, which could only be bought on a single machine. With SaaS, the user accesses the software via the Cloud, which gives access to greater functionality in real-time from any chosen device, anywhere in the world. This access can be simultaneous with multiple users.
The model has many benefits. For SaaS providers, it means software and data is hosted in the Cloud which is cheaper to store and distribute than having to invest in the hardware and infrastructure of large server centres. Upgrades to software can be made instantaneously, across the entire system, at virtually no cost and with minimal disruption for a consumer. With no need to install and maintain software, the provider’s subscription based service delivers sustainable, secure revenue streams with reduced customer churn.
Benefits for SaaS providers
- Revenue and Cash Flow: Customers pay for software by subscription rather than buying a licence, resulting in more sustainable, predictable revenue streams and cash flow
- Development focus: Focus is to software development rather than needing to invest in extensive hardware systems required to support licensing servers
- Scalable Delivery: SaaS Software can be distributed, via the Cloud, to new customers at almost no extra cost
- Highly Valued: A capital efficient, high profit model that delivers competitive advantage and secures customers because of the time and cost to switch
Benefits for Users
- Frequent, Real Time Software Upgrades: The SaaS model delivers a smoother update and distribution process
- Lower Total Cost of Ownership (TCO): Reduced costs as maintenance, license and distribution costs are removed
- Higher Level of Service: Immediate support, upgrade and service through the software subscription