As more business owners become aware of the benefits of Software-as-a-Service (SaaS) solutions, there’s a growing problem of vendors taking advantage of the increased demand and selling solutions that are not actually ‘true’ SaaS.
Forrester recently published a report titled “Beware of the SaaS Trap”, in which the issue of software being falsely sold as SaaS is covered in detail. Below you’ll find the main points that are covered in the report so you can avoid falling into this trap.
Why should you care if a solution is truly SaaS or not?
It’s easy to assume that if you’re using a cloud-based service and are getting a good price then whether or not it can be truly considered ‘SaaS’ isn’t really that important. Whilst that might be true in the short term, as your business expands and you need to quickly add new functionality and you want to benefit from seamless upgrades, then it can quickly become apparent that other deployment models do not cut it.
For these reasons, it’s incredibly beneficial to be able to discern which services are SaaS and which are not.
What makes SaaS different from other off-premise models?
At first glance, it can be difficult to determine between a non-SaaS model and one that can truly be classified as SaaS. However there are certain key factors of a ‘real’ SaaS solution that set it apart. These include –
A high level of agility
With SaaS, all customers are running on the current version of the application which means that the vendor can deliver new features and capabilities very quickly and easily. It’s also easier for the vendor to support additional quick-to-deploy functionality through partner add-ons because all partners and customers only have one version to worry about.
With non-SaaS solutions, the buyer will often be stuck in the rut of only having access to major upgrades on a yearly basis (or every couple of years). They will also find it harder to take advantage of a true app store, because vendors will have a harder time creating ready-to-go, downloadable solutions across multiple versions.
Subscription payment model
SaaS services are usually priced on a subscription basis, usually per user per month (or year) with a generally predictable cost structure. Many non-SaaS on-demand models require large upfront costs.
True SaaS applications offer multi-tenancy which means core functions are shared across multiple customers. This means that the costs can be reduced as they are spread across a volume of customers. Solutions that lack multi-tenancy could mean higher costs and almost always mean minimums for the buyer (e.g. 100 users).
What type of business can benefit most from SaaS?
Two key alternatives of deployment model to SaaS are ASP (Application Service Provider) and Application Outsourcing. Whilst each model has its own advantages, SaaS is by far the best option for businesses that value agility and customer experience. Not only does SaaS typically provide the fastest delivery of new features and capabilities, but it also has the ability to adapt to the changing needs of your customers and your employees, as well as any other changes within your organisation.
SaaS solutions have also been very quick to embrace new technology, whether it’s supporting mobiles and tablets or coding languages such as HTML5 and CSS3. With the rapidly changing nature of technology today, this willingness to adapt quickly is a key benefit of SaaS.
It is worth noting that in the Forrester report, it states that SaaS isn’t well suited to companies which require the system to be “heavily adapted to their unique business processes, or require custom modules and unique integrations.”. With NetSuite – the SaaS business management solution that we provide – customisation is part of the offering. Every single instance has some level of customisation as this is what sets your business apart from your competitors. Where caution should be taken is if you are making the system do something highly complex and not part of the platform’s competency – though this indeed applies to any and every platform.
To learn more about SaaS and how to determine it from other services, download the Forrester report in its entirety by clicking here.
NoBlue is a leading provider of NetSuite, which is a true SaaS business management application. If you’d like to find out more about SaaS or how using NetSuite can benefit your business don’t hesitate to get in touch.