Whether it is appropriate to use this format has to be assessed based on the type of business or application. Let’s consider its benefits for customers:
● The software does not need to be installed on PCs and employees’ desktops. Access can be arranged via the computer’s browser. Sometimes a client software is installed, but this is most often a matter of convenience for the particular company
● A drastic reduction in the cost of organizing the work of the company. If the business owner chooses client or client-server software, it may incur costs to pay for the software, rent premises, to organize a data center. It is also worth considering the cost of staff salaries and regular computer maintenance
● Reducing the cost of upgrading deployed systems to their complete reduction
● Quick start. It takes 1-2 minutes to sign in the application. Afterwards, you should log in and be fully familiar with the software
● Multiplatform. The payer does not depend on the platform the developer chooses
● Work from any location with internet access
● Synchronising data across multiple devices
● No backup problems, as on physical devices – PC failure, HDD issues, etc
● Collaboration between users
There are several advantages for developers:
● Services are in demand. The largest companies in the world use them
● Rapid digitalization and increasing complexity of SaaS application development. Functions are becoming more complex and massive, but easier to use in practice
● The system can be implemented quickly and cheaply. It is easy to penetrate global markets
● There are no difficulties with unlicensed software and its prohibited distribution
● The SaaS client is tied to the provider. The user cannot buy the software once and use it after the relationship is terminated. The developer does not risk losing money – his investment is protected
● SaaS brings economic benefits in the long run. The model will generate more revenue than the user will spend to purchase a software licence. SaaS is more profitable because there is no need to spend money on technical support for the software being installed
● No large support team is needed to fix issues on users’ desktops
● Quick and frequent software updates, fully controlled by the developers
● User data protection
The advantage for both parties is increased competition. Users get an improved product with enhanced functionality due to the continued growth of the provider companies. Developers get more customers and investments if the application is properly designed.
But the model also has several drawbacks:
● Revenue is stretched over time. The user pays for the app once a month, and the cost of recruiting new users often exceeds the revenue from the first purchase. Hence the importance of constant contact between user and vendor. Developers need to retain an audience. To do this, the software needs to be updated regularly and become more creative
● For users, the service can be complicated by a lack of Internet access, including unstable Internet connections. In this case, the applications are slow to load or stop working
● The main disadvantage is support and server infrastructure costs