Why SaaS is the future of the software industry?

The COVID-19 pandemic caused massive disruption across countries, communities, and businesses. It made businesses (both large and small), realize the need to create resilient business models, to be better prepared for large scale disruptions, and to become competition ready. This brought back the focus upon digital transformation and accelerated the digitization process for several companies and their day to day operations. With the ongoing shift in control over software purchase to the customer from the vendor and the increased implementation flexibility brought on by SaaS, every successful digital transformation program now has SaaS at its very center.

So what is SaaS?

SaaS or Software as a service is the delivery of applications over the internet instead of installing the applications onto the system, thereby avoiding the complexities of software and hardware management. Customers can access these applications through a secure internet connection. The access, security and performance of these applications are handled by the provider.

The SaaS market is already seeing a strong demand globally driven mainly by digital transformation programs. As digital transformation is a continuous process, this demand will continue to remain strong in the coming years as well. Gartner has predicted the SaaS market to continue growing in 2021, reaching almost $120.9 billion. The COVID pandemic is also playing a significant role in accelerating these numbers. Interestingly, SaaS is finding unique applications for specific business verticals. Restaurant Management, Healthcare Management, and even Church Management (ChMS) have found applications for SaaS technology. Meanwhile, small and medium scale businesses continue to be major contributors to SaaS-based business models.

As companies move towards developing a number of applications for serving customer needs and adapt themselves to the changing customer behavior, SaaS will evolve into an integrator for developing an ecosystem of partners, taking subscription-based models to the next level.

Why SaaS for the software industry?

Customers and enterprises are now looking at customized software solutions to solve their business problems. SaaS technology enables users to customize the applications for business processes without changing the central infrastructure. However, the core benefit of the SaaS model lies in its capability to turn IT from a capital expense into an operational expense as it eliminates the need for large starting investments and complex implementation processes. This makes companies much more agile and future-ready. Therefore, SaaS has gone on to become strategically important to organizations rather than just being a cost-saving exercise. 

Some of the major benefits arising from SaaS are below:

• Shorter time for adoption
• Lower infrastructure costs
• Better resource allocation
• Strong customer-centricity

As we move forward, software companies will have to start looking at shifting to SaaS, in order to prevent losing the market traction. This will require significant ramp-up in terms of supporting a cloud-based infrastructure as well as aligning the business strategy with SaaS. There has to be a strong focus on communicating the change programs to each of the teams internally. Customer success will continue to be a cornerstone for such programs.