What is a Saas, anyways?

If you’ve ever wondered what a SaaS is and how it could benefit your business or personal life, this article is for you. The Software as a Service (SaaS) model has been rapidly growing in popularity ever since the introduction of Salesforce in 1999, which has more recently seen an indie uprising by independent programmers and designers. By understanding the ins and outs of SaaS, you can streamline your processes, reduce costs, and improve efficiency, all from the convenience of any internet access you have available. In this article, we break down the concept of SaaS and explore its various uses and advantages, helping you to navigate this innovative technology and determine if it's right for you.

What is SaaS in simple terms?

SaaS is considered a cloud-based software delivery model in which users access applications and services over the internet. Instead of purchasing and installing software on their own devices, users subscribe to a SaaS product or service and access it through a web browser or mobile application. SaaS providers host and maintain the software, as well as handle security, updates, and backups. This allows users to focus on their core business activities, without the need for dedicated IT infrastructure or technical expertise.

The benefits of using SaaS for businesses and consumers are numerous. For businesses, SaaS provides a cost-effective solution that eliminates the need for significant upfront investment in IT infrastructure and software licensing. SaaS also offers scalability, allowing businesses to easily adjust their usage and subscriptions based on their individual business needs. For consumers, SaaS provides convenient access to a wide range of services and applications, without the need for specialized software or hardware.

Now that you understand what a SaaS is, let’s talk about an example. Because of it’s digital-only distribution, many people think Netflix is a prime example of a SaaS company. But is it really?

Is Netflix a SaaS company?

Netflix is often referred to as a SaaS company due to its use of the subscription model and the fact that its product is hosted and delivered over the internet. However, Netflix has unique characteristics that differentiate it from traditional SaaS companies. The online video streaming juggernaut known as Netflix creates its own content and licenses it to users, whereas traditional SaaS companies provide software developed by third-party providers. Additionally, Netflix invests heavily in original content production, which sets it apart from most SaaS companies. By having it’s own media creation happen in-house, they not only offer entertainment instead of software, but also save costs from licensing other media.

While interested persons are more than able to release a SaaS that runs without expecting any payment in return, most will put the effort into developing one to make a profit. But how do they do that?

Making money with SaaS

SaaS companies make money by offering their software products on a subscription basis. This provides a steady stream of revenue for the company and predictable costs for the customer. Revenue streams for SaaS products may also come from upselling or cross-selling additional features, offering add-ons or integrations, or charging for increased usage beyond certain limits. If you’ve ever signed up for a SaaS, you’re probably familiar with the tiered approach to pricing, where certain features are locked behind particular increasing price tiers.

Pricing models for SaaS products can vary, but commonly include a flat fee per user per month, a tiered pricing model based on usage or features, or a usage-based model where customers are charged based on their actual usage of the software.

There are SaaS companies out there who make plenty of revenue without charging users at all. Let’s learn about how they operate without a subscription, next.

How do free SaaS make money?

SaaS companies offer free products/services to attract customers and generate revenue through various strategies. Here are some common ways free SaaS products make money:

1. Freemium model: The basic version of the product is free, but users must pay to access premium features or more advanced versions of the product.

2. Advertisements: The SaaS company sells advertising space on its platform to generate revenue.

3. Data monetization: The SaaS company collects and analyzes user data to sell insights or targeted advertising.

4. Referral programs: SaaS companies offer incentives or rewards to users who refer new customers to the platform.

5. Limited trial periods: The SaaS company offers a free trial of the product for a limited time, after which users must pay to continue using it.

A SaaS will only make revenue in part to the quality of service or product it offers, but also based on many other qualities that a SaaS may opt to outsource or otherwise get someone to handle for them.

SaaS professional services

SaaS companies often require professional services to ensure their products are functioning effectively and meeting the needs of their customers. Professional services for SaaS companies may include:

·  Implementation and integration: SaaS agencies and consultants can assist with implementing the product and integrating it with other systems.

·  Customization: SaaS companies may require customized solutions to meet the specific needs of their customers.

·  Training and support: SaaS agencies and consultants can provide training and support services to help users effectively utilize the product.

·  Copywriting and marketing: SaaS companies require effective marketing strategies and copywriting services to attract and retain customers. Freelance copywriting services can be a valuable asset to SaaS companies.

While not every SaaS will need all these services, they are common enough to be worth recognizing as a potential SaaS customer or founder.

Conclusion

SaaS is a rapidly growing industry that is transforming the way businesses and consumers access and utilize software. SaaS companies offer a wide range of benefits, including increased flexibility, scalability, and cost-effectiveness. Understanding the unique characteristics and revenue models of SaaS companies is crucial for businesses and consumers alike. The future of SaaS is bright, and we can expect to see continued growth and innovation in this industry in the coming years.

Dan Riemen
Level 00