Benefits of Having a SaaS Offering
If you don’t know the meaning of SaaS, it simply means Software-as-a-Service. The SaaS industry has been growing in leaps and bounds for the past several years and it’s expected to keep growing. According to a research by Gartner Inc., a global research and advisory firm, the SaaS industry is the largest segment of the cloud market and is expected to reach $85.1 billion in 2019. That’s a whopping 17.8 percent from 2018. Now, that’s a huge potential. If you want to tap into this billion-dollar market, then you need to start offering SaaS for your business.
Here are some reasons why you should have a SaaS offering:
Reach new prospects
Having a SaaS offering gives you the opportunity to attract new type of customers for your business. The importance of always attracting new customers for your business cannot be overemphasized. Businesses need to look out for non-customers instead of concentrating on old customers alone. This can be done by continuously building powerful products and services that customers value. Doing this will enable them reach beyond existing demand and unlock new mass of customers that never existed before.
For instance, a small business might not have the technical know-how or appropriate resources to leverage the IT infrastructure of a multi-user software application. But, in a SaaS context, the said business can deliver the software application through a web browser or any Windows client apps. This way, the application can be bought directly from the SaaS reseller or the web store of the publisher, thus eliminating technical and cost of sale barriers. The small business gets the needed technology to compete in its marketplace and the software publisher makes automated sales. It’s definitely a win-win situation.
Automatic payment collection, online signups, automated provisioning, automated trials, reseller integration and automated customer support makes for a completely new type of business model. You can lower your cost of delivery by automating more of the processes involved. It’s a step by step process. Begin by automating the most important pieces first. At first, you’ll want to host your software and set the price for it. Then later, write a script for automatic payment collection and software delivery, and set up processes once someone places an order through your web store.
When it comes to software company valuations, recurring revenue is the number one driving factor. Regardless of whether you intend selling your software company in the near future or not, recurring revenue is one of the amazing benefits of having a SaaS offering. It’s a business model that guarantees a predictable, stable income and a high customer lifetime value (CLV).
According to Ventana Research, a market research company in NW Brooks, California, U.S., having a recurring revenue for your business gives you the opportunity to decrease costs, increase revenue, stabilize your cash flow, and enhance business profitability.
In addition, having a recurring revenue business model enables you to have multiple service choice offerings for your customers as against a one-time purchase offer. This will enable you reach a wider audience that you never deemed possible. Take for example, Adobe once offered their software for a one-time purchase of $1,800, but not many people could afford this. So, what did they do? They repackaged the software to offer multiple options, which made it more attractive to a larger audience. Adobe recorded a 115 percent increase in market cap two years after this smart move – the power of SaaS offering.
Scale effortlessly and sell anywhere
Your customers don’t require any onsite setup or engineering or any of such related when it comes to implementing your SaaS products. This means you can sell anywhere, both nationally and internationally. You can sell through resellers or through your web store and manage everything from your server in the cloud.
The SaaS industry is huge and the time to start offering it in your business is now. Go on, implement that amazing software idea you have and profit BIG.