SaaS stands for "Software as a Service".
It's a way of delivering software applications over the internet. In most cases users don't need to install the software on their own device. They access it through their web browser or app for convenience.
SaaS is good for businesses as user. They can enjoy the benefits of up-to-date tools without having to worry about devices. The provider is the one responsible for the infrastructure, updates, security,etc ...
There are also important drawbacks to using SaaS : platform risks and vendor lock-in. We'll get back to it in more details in the future. To put it simply here, by using a SaaS you can be giving up a lot of control over the sustainability of your business. You're trusting that the provider will be around in the same capacity at least as long as you will.
What is the cost structure ?
Typically the cost of a SaaS involves a recurring subscription fee. The fee can be based on many factors such as number of users, amount of storage used, or the features included.
As SaaS provider it is best to anchor the price of a SaaS to some key value metric(s): number of emails sent, number of users, ... A customer gets charged more as it gets more value out of the software.
Some SaaS providers offer a free basic version (called freemium model). It often comes with limitations designed to get you started and upgrade to a paid plan when you are ready.
Some may also offer discounts for customers who pay annually, rather than monthly.
SaaS costs are more predictable and manageable than traditional software. There are no large upfront costs, and expenses can be linked to the actual usage.
Why is a SaaS product subscription based ?
The provider must deliver, update, maintain and support the application. This is a continuous service. Therefore it requires a recurring revenue stream to support the costs.
The subscription model also allows the provider to spread the cost over a larger customer base and longer period of time. This makes it a more sustainable business model as it provides a predictable and stable revenue stream. SaaS providers can plan and invest in future product development and improvements on the long term.
For customers, the subscription model provides access to the latest software without having to make a large upfront investment. It should also reassure the customer that the software will be available for a longer period of time.
Should I build a SaaS ?
That's the point of this website, helping you decide on whether and how you should go about SaaS and building software for your services.
At Saasify.work, we have a strong opinion about it, so for an unbiased (?) opinion, we asked ChatGPT, an AI powered tool answering questions. Here is what it had to say about it:
Building a SaaS can be a rewarding and lucrative opportunity, but it's important to carefully consider the following factors before making a decision:
- Market demand: Is there a clear need for the product you're considering building, and is there enough potential demand to support a SaaS business?
- Competition: What other SaaS products exist in the market and how do they compare to your proposed solution?
- Business model: Can you create a viable business model that will generate enough revenue to sustain the business over the long term?
- Technical feasibility: Do you have the technical expertise or resources to build and maintain a SaaS product?
- Resources: Do you have the financial, human, and technological resources necessary to bring the product to market and grow the business?
If you can answer these questions positively and are prepared for the challenges and uncertainties of starting a business, then building a SaaS could be a good opportunity for you. However, if you have doubts or limitations in any of these areas, it may be best to reconsider.
Now, here is our opinion and it is more direct: NO, you shouldn't.
However, it is also less black and white.
We believe you should start building towards having one.