Don’t know SaaS’s meaning? It’s one of the most important tools in the modern world of business, and this article is here to help you understand it!

SaaS is one of the most popular and essential product categories in the world today. It can be found everywhere from mobile devices to office workplaces, and it’s making a huge difference everywhere that it goes.

In fact, if you are reading this article, you’re probably making use of SaaS technology right now! This article can help explain what SaaS is, all of the places it is used, and why it’s so important.

What Is SaaS?

SaaS is an acronym that stands for Software as a Service. It is based around a software licensing and delivery model that enables companies to use a powerful software platform for a subscription fee.

The SaaS model of business is based around cloud computing and a unified online infrastructure that SaaS providers make available to end-users through web browsers and apps.

While traditional software in businesses used to almost exclusively be based around local area networks and servers, SaaS products provide access to any person with an internet connection.

SaaS businesses and service providers make it one of their main goals to provide helpful software services to many people and organizations while still offering approachable prices even if the customer doesn’t have a vast amount of money.

What Are the Benefits of SaaS?

One of the biggest reasons to use SaaS is because it is much more accessible. While traditional software was usually sold inexpensive perpetual licenses, SaaS is sold as an ongoing subscription. This means it is much more scalable for larger and smaller businesses and consumers. Instead of worrying about paying a massive upfront cost, companies can affordably have access to high-level software that can scale up along with them.

In some cases, SaaS can use the “freemium” model, in which a free version of the software is made available to customers who have low needs or smaller scale. This is a powerful marketing tool that allows a company to incorporate customers into its ecosystem while they are small so that as they scale up, they start to pay money for the product.

Another primary benefit is focused on the fact that SaaS is engaged with and used online. Because an increasing number of jobs are going remote and alternative workplaces are becoming more popular, having software services accessible via the internet is vital.

SaaS enables people to work on their platforms everywhere—from office desks to mobile phones—making it incredibly important for productivity and accessibility.

How Is SaaS Used in the World of Business Today?

SaaS is massively popular, and SaaS vendors will often try to create B2B products that make running a business more accessible and more efficient for companies. Some standard SaaS Business models include:

Financial Management software
CRM (Customer Relationship Management) tools
HRM (Human Resource Management) organization applications
ERP (Enterprise Resource Planning) software
Cloud Storage platforms

While all of these can be done without the help of SaaS software or using different kinds of software, SaaS provides highly accessible and functional tools for businesses of all sizes.

Some popular SaaS providers include:

Dropbox
Salesforce
Slack
Microsoft Azure
Amazon Web Services (AWS)
Google Workspace and Drive

These tools all qualify as typical SaaS apps because they are accessible through a web browser or downloaded app, work on a subscription-based model, and focus on internal business collaboration.

How Does SaaS Work in the Context of Consumer Products?

Suppose there is a service provider with an expensive and high-quality product but wants to reach a more comprehensive number of people. In that case, they will likely start looking at subscription-based software delivery models.

This software distribution model makes it much easier to sell software to people. Customers are generally much more likely to pay $5, $10, or even $20 every month instead of having to drop several hundred dollars at one time.

This also works out for the company in many ways, but its benefit is primarily in the infinite nature of subscription services. Instead of having one set purchase, subscription-based companies can have a slow and steady yet mostly consistent income. This allows the company to remain profitable and viable over a long period and removes the problem of market saturation.

Another reason why SaaS is so powerful is that it is based around the internet. A cloud service provider can reach far more people than online software based on stationary hardware. This means businesses can market to a broader and more diverse audience while making the wholesale process quicker and more efficient.

Some popular consumer products that are also SaaS products include:

Netflix
Spotify
Strava
Mint Mobile
Tinder
Grammarly
Evernote
VSCO

How Is SaaS Different From Other Software Providers?

Before the internet was as prominent as it is today, business and consumer software products were created for offline use. Sometimes, software would communicate with other users through local area networks, but that was often a hassle to set up.

With traditional SaaS, the entire platform is usually online, and the service itself is delivered through internet access. This means that users can access the products and services no matter where they are. This is incredibly useful in the modern age where working remotely and in alternate workspaces is more popular than ever. It also often increases market accessibility for people who primarily use mobile devices to use SaaS applications, anywhere they roam.

Since SaaS products are typically delivered on a subscription basis, they tend to be developed and improved upon over time. As the developer creates additional features and upgrades for the software, people paying the subscription will almost always have access to the latest version.

SaaS is a much better solution than in the past when people and businesses had to buy one version of a software and continually pay for individual upgrades as time passed.

Sources:

Kevin Miller is a growth marketer with an extensive background in Search Engine Optimization, paid acquisition and email marketing. He is also an online editor and writer based out of Los Angeles, CA. He studied at Georgetown University, worked at Google and became infatuated with English Grammar and for years has been diving into the language, demystifying the do's and don'ts for all who share the same passion! He can be found online here.