9 Software as a Service Examples
Today, Software as a Service (SaaS) is practically synonymous with online business ownership and management.
You will be hard-pressed to find an online-based business today that doesn’t use some type of cloud-based SaaS solution to help them either run or manage a part of their day-to-day business operations.
Here, we are going to talk about what SaaS is, discuss why it’s great for you as an online business owner, and give you nine SaaS examples of companies doing it right.
Let’s get started …
What Is SaaS and Why Is It Great for Business?
SaaS is just one of three categories that define cloud computing along with Infrastructure as a Service (IaaS) and Platform as a Service (PaaS). SaaS is where a third party provides an application, which is hosted on its own servers and delivered via the internet, typically through your web browser.
SaaS is the top of the stack, meaning it’s what a majority of users like you and me see and use over the internet on a daily basis, while IaaS and PaaS are the underlying infrastructure that all SaaS applications are built upon.
We are only talking about SaaS, as this is what’s relevant for most online business owners in running their business (unless, of course, you are planning on developing your own SaaS business).
What Makes SaaS Different From Regular Software Licenses?
Typically, software is sold on a perpetual license basis. This means you pay for a single license to access the software and use it, essentially, forever — with most enterprise software vendors charging a yearly support or maintenance fee.
SaaS, on the other hand, is sold on a subscription basis, which is either monthly or yearly.
So why would you pay for software that you end up paying for forever when you can pay only once?
There are many reasons why the perpetual license model isn’t that great for a business. The problem with most perpetual licenses is they tend to be operating system (OS) dependent. This means software designed for Windows won’t work on MacOS and vice versa.
Another problem with this type of software distribution is that there is little incentive for developers to keep updating old software. So once a new version comes out, many software companies drop support and stop updating the old version of the software.
Many enterprise-level applications require expensive hardware such as servers to run the applications on a business’s internal network — usually requiring some sort of internal IT department or specialist. This is to make sure if there are any issues, they can be resolved quickly, without costing the business revenue when their entire system goes down.
All of these additional requirements end up increasing operating costs over the long term — which is one reason why some business owners are prepared to risk turning to software piracy and running software without paying for it. This is no good for either the business or the software company, as pirated software is open to being compromised by malware, risking the security of the business — while the software vendor loses a source of revenue from using the software they spent so much money developing.
While SaaS is not perfect nor ideal for every circumstance, it does solve a lot of these issues.
What Are the Benefits of a SaaS?
The biggest benefit of a SaaS is that it is OS-agnostic, meaning it doesn’t care what OS you are running. Usually delivered via the browser (referred to as a thin client), a SaaS service doesn’t require any special software installation or hardware to run like on-premise software would. If your computer can run an internet browser, you’re good to go.
However, some SaaS companies also supply a desktop version of their online app. It still uses the same backend database and code, but usually has advanced features like the ability to work offline or integrate with other desktop apps.
Another key benefit of a SaaS is how it runs its software on its own data center and servers in the cloud, which removes the need for customers to invest in and maintain expensive or specialized equipment. This also eliminates the need for a business to hire an IT specialist, as the SaaS provides its own team of support and technical staff — saving both time and money for end-users.
A SaaS with its subscription fee and cloud-based distribution allows it to rapidly respond to bugs and feature requests, allowing the software to be updated incrementally rather than once every one or two years like in typical software development. This also means the customer of a SaaS always has the most up-to-date software and doesn’t have to worry about what version they are running, or if they are exposed to a major security leak or other problem for an extended period of time.
There is also a reduced risk of piracy, because not only is the software more affordable, but it’s also practically impossible to steal. You either pay to use it, or you don’t get access, which helps incentivize a SaaS vendor to keep supplying the software and also keep it updated in order to keep customers paying.
While we could go on about the benefits of a SaaS, here is a quick shortlist of the benefits the SaaS business model provides for both SaaS providers and the businesses that use their service models.
For the SaaS provider:
- Consistent revenue stream, making it easier to maintain a team of developers, technicians, and support staff to keep the service stable and improving
- Faster development cycles thanks to the cloud platform with more regular incremental updates and fewer major ones
- Easier troubleshooting of problems and bugs, as problems would be more likely related to software rather than hardware
- Reduced risk of software piracy
For the SaaS customer:
- Typically, cheaper over the long term when factoring in associated equipment and staffing costs of running an internal system
- Ability to choose best-in-class software, as many SaaS platforms are highly specialized pieces of software that do a particular task really well
- Easier integration (or communication) with different SaaS platforms through the use of application programming interfaces
- Reduced need for and costs associated with having an in-house IT team
- Flexible payments that allow the business to pay monthly or yearly
- Easily scalable up or down depending on business needs
9 Effective SaaS Examples
Let’s take a look at some successful SaaS business examples and the services they provide. We’ll start with …
HubSpot is, at its core, a client/customer relationship management (CRM) system. A CRM is typically used to manage the sales process, moving somebody from a lead to a prospect, and finally to a customer. It allows you to manage all the information — from social media to tracking contacts within content management — anything that is related to their relationship with the business can be overseen with this SaaS product.
HubSpot provides a free forever tier (often referred to as “freemium”) for their CRM with the goal to get potential customers to start using the basic software and then pay to upgrade to the integrated and advanced outbound marketing tools offered. It provides different pricing tiers that scale with your business and is considered to have one of the best systems out there for onboarding new customers.
If you are doing any kind of outbound sales or lead generation for your business, then having a CRM service provider to manage all of your leads and notes in a single location is a massive time saver — making it easier to remember those little details that are often forgotten and close the sale.
Skubana provides an integrated inventory management solution for online retailers who want to sell their products via multiple distribution channels. High-quality inventory management software can be expensive, and a centralized inventory is critical to ensure a retailer doesn’t oversell their stock, which is a big problem when it comes to managing multiple sales channels. Skubana provides a cloud-based solution at a fraction of the cost of implementing a custom inventory management system from scratch.
Setting up an online store yourself can be complicated and take outside expertise from developers and designers to make it work. Shopify saw the opportunity to create a platform where you could build an ecommerce store and start selling products in just a few hours.
Setting up a Shopify store is easy and painless, providing the site, the shopping cart, online catalog, and payment integration all in the one platform. It also offers customization options via its library of both free and paid plugins.
If you are dropshipping or looking to run a branded site for your business that integrates with your Fulfillment by Amazon business, then Shopify offers a complete and simple solution with competitive pricing.
Google’s G Suite is basically a cloud service version of Microsoft Office, albeit with a little less functionality. G Suite is officially the name for Google’s business version of apps; however, the paid version is only a fraction of the price you would pay for Microsoft Office. If you have a free Gmail account, Google Apps is the free version of the same software.
Many business owners never need to use anything else to run their businesses. It also has hands down the best collaboration functionality of all the online business apps, where you can have multiple users logged into the same document and making changes in real-time simultaneously without creating versioning issues like some other services. It also helps knowing Google Compute Engine is the IaaS framework fueling your business as it’s a well-known and trusted infrastructure used across the internet.
If you’re on a budget, G Suite can give you most of the features of Office including email, spreadsheets, a word processor, and more, without the cost — great for the budding entrepreneur.
Zendesk provides a centralized way to manage all of your customer support tickets. Instead of filling up some support inbox or losing emails over several different customer support team inboxes, Zendesk provides a way to track, allocate, communicate, and resolve any issues that your customers might be having. Not only does this make sure you don’t accidently forget about a customer problem, it reduces wait times for support and cuts down on negative customer feedback.
Any business that’s dealing with more than a handful of customers or clients should be using something like Zendesk to manage customer support requests. In the online world, reputation is everything, and all it takes is a bunch of negative reviews to permanently damage your reputation online. It can also help you identify if your support team is being stretched too thin and if it’s time to bring on some help, improving the morale and productivity of your team.
Dropbox was one of the first consumer-grade cloud storage solutions on the web. Dropbox has several pricing tiers, starting from their free plan (beginning with 2GB of storage) for individuals, and 2TB or more space on their business offerings.
The basic levels offer an easy way to save your photos and files, and sync them across your devices regardless of the OS you’re running. At the higher end, it allows for you to recover deleted data and offers encryption options with advanced user permission management, much like what you would find on an in-house corporate network — without the need to invest in expensive software and infrastructure.
The default communication medium for most businesses is either phone or email; however, if you are running a business with a remote team, you need something a little more flexible.
Slack is an instant messaging service that gives you the convenience of Facebook Messenger, but with advanced functionality — allowing easy collaboration with multiple users and the ability to share sensitive company data securely. It also supports integrations with most popular project management apps, such as Asana, Trello, and Basecamp.
Slack offers a freemium tier to try it out as well as a paid version.
Adobe Creative Cloud
Adobe has a long history and is the industry standard for anyone doing graphic design or video production. Adobe used the perpetual license model for many years, but a single piece of their software suite would typically sell for over $1,500 — putting it out of reach for many small business owners. This may be the reason it used to be among the most pirated software on the web.
Adobe saw the light and shifted to a SaaS subscription model in 2013, supplying their entire suite of products for only $49.99 a month — a fraction of what it used to cost to buy a single piece of their software. This allowed them to scale up and increase their user base by improving accessibility to their suite of products through more competitive pricing.
While there are many alternatives out there to Adobe Creative Cloud (Adobe CC), nothing comes close to it in terms of the powerful features it offers in image manipulation, video editing, and graphic design. It’s the industry standard, and if you do any kind of design work, Adobe CC is a must for your business.
Microsoft Office 365
If G Suite is for the business owner who is starting out and wants to be cost-effective, then Microsoft Office 365 is the industry standard enterprise-level software for larger corporations — offering more advanced features than Google’s service.
Microsoft has been around a long time, and many people are just used to using it. So if you have a team of seasoned professionals or are moving a traditional business online, then Office 365 can provide the benefits of the cloud while still offering something familiar for your team — reducing the time and cost human resources has to spend in retraining your staff.
Google Apps are also quite limited in their functionality compared to Office 365. This is most noticable if you do any advanced spreadsheet work, where Excel wins hands down. Another key point is Office 365 will keep working if you lose your internet connection, which is important for many business owners who may need to access their data even if they are offline — or simply want to keep their data off Google’s servers.
Are You Using SaaS in Your business?
Using SaaS is great for many types of businesses. It can be cheaper, faster, and simpler to maintain than traditional perpetually licensed business applications.
This is why SaaS is also a popular business model for many entrepreneurs, as the recurring revenue stream makes it easier to maintain a lean development system and pump out updates faster and more efficiently, while being able to listen to their customers and make tweaks based on their feedback. If you’re looking to acquire, make sure you check out the SaaS businesses for sale on our marketplace. Or if you have a SaaS, make sure to check out our article on SaaS valuations so you know what to expect when you’re ready to sell your SaaS business.
As more people get online with their businesses and use more SaaS-style applications, competition will keep driving down prices and pushing software vendors to keep innovating and improving their products. This will make it more affordable for more entrepreneurs like you to start your business for a very low cost.
Is it time for you to get SaaS-y with your business?
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