SaaS: A Great Way to Shave Money off the Bills


saas savingsSoftware-as-a-service, more commonly as SaaS, has continued to grow as one of the most popular business models available within the tech sphere over the last five years. Tightly connected to cloud computing, SaaS is a “sweet spot” in enterprise marketing due to the ease with which new services can be rolled out to end users. Nearly 40% of the software market was dominated by SaaS-based services in 2012 alone, with the top ten providers generating nearly

$18 billion in revenue in the same year.

Customer Relationship Management (CRM), invoicing, Human Resource Management (HRM), office & messaging software, sales tracking software, data storage, and many other task management programs can all be held in the cloud securely, where access and function can be rented from service providers. This business model has many benefits for providers and end-users, the least of which is the preservation of data in the event of a hardware loss.

Because most SaaS programs are accessible through the internet or intranet, software is no longer limited to a specific machine; it can be accessed easily from any compatible computer with internet access. Most providers have fail-safes in place to allow for backups, as well as security measures to ensure that data remains confidential. This is of great benefit to anyone who travels frequently for business or pleasure, and can also help businesses to form remote teams securely and safely. For casual consumers, it can help to provide easy access to games, productivity programs, and other useful programs.

Trends in SaaS have pointed to a continuation of this popularity; many reports suggest that the SaaS market is projected to continue growing at an increased rate. SaaS providers can expect to enjoy a 16% growth rate over the time period starting in 2012 and ending in 2015. This translates to sequential revenue growth of nearly $7 billion dollars during the same time period.

Easily the most competitive companies within the SaaS market, industry leaders SAP and Oracle are reporting sequential growth in even greater numbers. This is also representative of SaaS’s bright future, and points to the need for companies to focus on reputation and support, in addition to services rendered.

Industry experts like Charles Phillips have had plenty to say on the subject when questioned about the future of the SaaS model. The former co-president of Oracle Corporation is now a major player at Infor, a company dedicated to enterprise software solutions. Considered an expert in cloud services and SaaS, Phillips knows what he is talking about.

In an article in Information Weekly, Phillips stated, “The industry is different than it was five or ten years ago when you could look at laggards and leaders. Technology is now pervasive, so everybody has certain expectations — even the most remote end-users. They’re using smartphones and consumer apps, and they’re versed in what’s possible.”

The prevalence of smartphones in the tech industry has changed marketing permanently, and has directly impacted the demand for cloud software. It has led to a higher demand for support from consumers. Phillips is correct when he states that users have expectations. The one manner in which marketing has remained the same is that the companies who come out on top will still be those who find a way to meet or exceed consumer expectations. This is true whether the consumer is engaging with software as a basic individual consumer, or at a much wider enterprise level.

Over the next five years, cloud services, CRM software, and other SaaS provisions will continue to evolve. In 2014, many experts have suggested that SaaS companies will need to gain an understanding that the business model is no longer a unique strategy.

As consumers become increasingly aware of cloud services and better able to differentiate useful software from novelty software, businesses will need to adapt to the fact that novelty is no longer the driving factor for conversions. Demos and temporary accounts will no longer have the same pull as they once did, because consumers will be wiser and better able to digest offerings fully before they sign up for them. Competition will rise steeply across all digital channels, with an increased need for useful content remaining at the forefront. Despite increased competition, there remains plenty of room for new providers to enter the sphere and succeed.

Image credit: CC by  photosteve101

About the author: Michael Templeman

Mike Templeman is an online marketing consultant.  He specializes in SEO and Social Media Management.  He is currently working with Decisions, a workflow software company.  When he’s not writing or consulting, he can be found in the great outdoors in his home state of Utah.  Find out more about Mike at his website.

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