4 Things You Need to Know About SAAS Businesses

Start-ups are a hot new property and the race for funding has grown tremendously. As a result, the amount of cash going around is limited. Fortunately, SAAS businesses are here to save the day. When setting up any kind of new venture or SAAS business, there are 4 things you need to know about this kind of company.

What Is The Concept Of A SAAS Businesses?

After the dotcom revolution of the 90’s, SAAS businesses became popular and took a hold on the market. SAAS stands for Software as a Service. Companies develop varied kinds of software that can be used in different ways.

While certain businesses purchase their software outright, others use it as an ongoing service. This means it requires it to be hosted by the developing company and access it through the use of the internet, rather than the company installing and hosting it themselves.

For most part, the software remains under the scrutiny of the developers and access is distributed with the help of a code. Most businesses will then use this code to pay for the time the software is utilized. An SAAS business has tremendous potential for users that are unable to purchase software outright or want the flexibility of monthly payments, but still need to use it.

4 Things You Need to Know About SAAS Businesses And Using Them

There are four main advantages when using an SAAS business model.

#1 – Lowered Cost Of Infrastructure

Often, using software for office functions requires a lot of technological infrastructure. Entire servers have to be set up, and people have to be hired to maintain it. When processes are added to the task, the technological load increases (and therefore cost). Utilizing software that is under an SAAS business model reduces these costs and frees up the capital, because the cloud based software circumvents the need for the purchasing company to host the software.

#2 – Reduction Of Security Problems

When data is stored on a local server, the chance of a security failure is potentially higher than when the data is stored remotely, where the dedicated software company can take steps to protect private data in the cloud. The data can be updated constantly and saved by external applications and human error is reduced.

#3 – Ease Of Scalability

A number of businesses suffer from delays when they have to scale up. A major reason for that is that they need time to get new personnel to handle the workload and put the technological infrastructure in place to handle those processes. Using SAAS ensures that a number of these procedures are eliminated and the process of scaling can move faster.

#4 – Flexibility

Ultimately, the idea is to make operations far more flexible and efficient for the purchasing company. Rather than a large upfront fee, SAAS is usually paid for on a smaller ongoing monthly fee, with shorter contract durations, meaning improved flexibility for businesses who wish to utilize SAAS.

A great example of this is Statement-Matching.com, a SAAS product that helps accounting departments automatically reconcile vendor statements as opposed to doing it manually. To develop and host custom software to do this would run into the thousands of dollars in costs, whereas a cloud based solution allows the company to keep monthly costs down and only pay for the transactions they reconcile.


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