An entrepreneur’s guide to understanding SaaS development better with examples.
Organizations the world over are quickly transitioning to SaaS solutions—and for a good reason. As companies are increasingly considering work from home as a permanent situation, SaaS has become their lifeline—helping organizations stay in touch, collaborate and in many cases, even exceed existing productivity levels. This led to over 65% of businesses adopting SaaS solutions, and nearly 80% have planned to completely shift to the cloud by 2022.
A report by Gartner estimates that public cloud spending will cross $332b by the end of this year. Up 24% from $270b in 2020, the public cloud (SaaS and associated services) market is showing no signs of slowing down and is a great opportunity for any entrepreneur who wishes to jump the SaaS bandwagon with an innovative and ground-breaking product.
What is SaaS?
SaaS, or Software as a Service, is software hosted on the cloud that customers access using a web browser or a thick client. SaaS allows organizations to greatly reduce their infrastructure and licensing spending by providing a subscription-based model that only needs a browser (or a client) to work. This helps companies switch from expensive desktop computers and laptops to inexpensive computing platforms, tablets and mobile phones! Today, over 38% of companies worldwide only use SaaS-driven solutions as they have transitioned to a fully virtualized and cloud-driven platform. SaaS is often used as an umbrella term to describe various services such as IaaS, PaaS and SaaS, and ancillary cloud services. Popular SaaS examples include the Google Suite, Adobe Suite, Canva, Microsoft Azure and Amazon Web Services.
See more: SaaS Business Model
What is the difference between SaaS, PaaS and IaaS and on-Site cloud services?
SaaS or Software as Service solutions has existed for a while. Early SaaS products included webmail services such as Hotmail, Outlook, Yahoo! Mail and Gmail. Fully integrated solutions such as Concur and Salesforce hit the market between 2005 and 2010. Today, most traditional desktop software has transitioned to SaaS. SaaS examples include Microsoft Office suite, Adobe product suite, WebEx, Zoom, and Microsoft Visual Studio products being notable examples.
A SaaS product vendor takes care of the underlying subsystems, applications, data, operating systems, servers and networks. All the user needs are either a web browser or other specialized client software (if needed, such as Adobe Suite, Microsoft Office 365 or WebEx).
PaaS or Platform as a Service gives businesses a platform to deploy their own apps and services without maintaining servers, frameworks and security. Popular PaaS examples include Microsoft Azure services, Amazon Web Services Elastic (AWS), Apache Stratos and SAP Cloud.
IaaS or Infrastructure as a Service allows organizations to rent servers, virtual machines, networks and operating systems from a provider on a pay-as-you-go basis. This helps companies to offset infrastructure costs while maintaining a high level of control over the server itself. Popular IaaS services include Microsoft Azure, Google Compute Engine, Amazon Web Services, Rackspace, Linode, Cisco Metacloud, etc.
What are the pros and cons of SaaS?
No product or service is perfect. Here is a list of the pros and cons of SaaS:
Pros of using SaaS
Cost is the number one factor why businesses choose SaaS. They need to pay for a subscription cost per (in some cases active) user, and they’re good to go—no need to purchase expensive hardware and multiple perpetual licences. Just pay for what you need and let your service provider manage the rest.
Managing the different versions of a product was a massive headache for IT companies. As software versions change rapidly, organizations often stuck to the version they purchased and relied on IT personnel for their upkeep—which sometimes resulted in downtime. Additionally, applications often require specific hardware and software combinations to function well—adding to the list of tasks for an organization. With SaaS, all they need to do is open a browser window to use the product—the service provider takes care of the rest.
- Upgrades and patches
I remember waiting a week until our IT team rolled out the latest version of Microsoft Office to the entire organization. With SaaS, all this seems like a blast from the past. When you open your browser to use Microsoft Office 365 over the internet, you access the latest and greatest version of the software yet—making software maintenance a redundant activity. You still need to have a compatible browser, which is trivial to maintain as SaaS applications often support a wide range of browser versions.
Mobility is the number one factor that draws organizations to SaaS-based applications. With work-from-home becoming the norm and lockdowns occurring as frequently as network fluctuations, SaaS becomes the backbone of an organization, helping them to stay up and running at all times. All you need is an internet connection and a web browser!
Cons of using SaaS
- Endpoint Security
The sheer number and wide variety of mobile devices make security an organizational nightmare. As employees can use any device to access SaaS products, it becomes crucial for organizations to ensure that those devices are not compromised.
- Lack of control
As the vendor manages these applications, it becomes difficult for organizations to control or customize them according to their needs. Additionally, you are dependent on the version of the software that is provided to you and cannot keep using an older version, as was in the case of desktop-based apps.
- Downtime and service disruptions
SaaS applications are not perfect, and neither are the subsystems on which they run. Salesforce’s latest outage caused global outages, and millions of customers could not use Salesforce products and services. Similarly, companies such as Facebook, WhatsApp, Netflix and others have faced service outages which can cause loss of business.
10 Popular SaaS examples—a list of our favourites
Here’s a list of SaaS software that we use at work—and for personal use. This is not an exhaustive list but includes the most-used and much-loved products.
I’ve used Canva since the day it came out. Canva is an online design tool for individuals and businesses alike. With an outstanding drag-and-drop interface and thousands of templates for nearly every graphic design you need to choose from, Canva is the first software I pick when a graphic designer is unavailable. You can use Canva to design book covers, ads, invites, business cards, Instagram posts and everything else you can think of. Canva rakes in nearly $300m in revenue each year and has more than 15 million active users.
Dropbox was my go-to service whenever I needed to share documents, code samples, presentations, videos or just about anything. Dropbox is a simple tool that allows you to store, share and collaborate with files on the go. Supporting a wide range of file types, Dropbox is perfect for both small and large teams. Dropbox is a unicorn with $1.5b in annual revenue and half a billion registered users.
3. Microsoft Office 365
I wrote this article using Microsoft Office Word 365. Office 365 cloud is a pure SaaS product that allows you to get the latest and greatest version of MS Office without having to shell out hundreds of dollars for a new version. I love the fact that I get both cloud-based and desktop variants of the software to choose from (dependent on the plan you choose) and can cancel at any time. Additionally, Microsoft is currently offering a free 1-month trial to see what version you like the most.
Salesforce is the most well-known SaaS tool that offers a CRM solution that includes marketing, sales, analytics, engagement monitoring and a host of other features that your business needs to succeed. Salesforce lets you collect, store, access and analyze customer data from a unified dashboard. Using Salesforce’s plug-and-play capabilities, you can pick and choose the modules you need.
5. Google Suite
No SaaS list is complete without the ubiquitous Google Suite. Google’s top-rated, user-friendly list of apps includes Gmail, Calendar, Google docs, Google Drive, Google Vault and more. With Google’s world-class service and massive user base, it is difficult to go wrong with their products. Google’s amazing pricing strategy ensures that individuals, large businesses, and small businesses can benefit from their services without breaking the bank.
My first experience with ZenDesk was as a one-person startup. I used ZenDesk’s amazing customer support SaaS tool to manage support for the product I created. ZenDesk gave me a world-class interface that had phone, email, chat, social media, and online tickets rolled into one seamless, integrated interface.
One of our clients swears by Slack and considers it impossible to function without it. Slack becomes your de-facto business communication tool that is entirely online, and you can manage all your communication channels through a single dashboard. With support for messaging, DMs, video calls and document sharing, Slack is slowly eating into email’s market share with its innovative interface.
Box is Dropbox for enterprises. Box has found favor with over 70% of fortune 500 companies that use it for file sharing and collaboration with a focus on security. Box offers great options for automation, and its workflows can help you automate the workings of various departments with ease.
9. AWS (Amazon Web Services)
Does the web even function without AWS anymore? Offering everything from storge to databases, machine learning, IoT, analytics, blockchain, computation, business applications, security and more, AWS has something in the cloud for everyone. Used by majors such as NASA, Netflix and the US Navy, AWS powers 30% of all cloud-based services that exist today.
10. SAP Concur
Concur was the first SaaS-based tool I used when I was an intern in a large software company. Concur is owned by SAP and helps organizations to automate their travel and expense management systems with ease. Concur is a one-stop shop for everything related to business travel, encompassing budgetary allowances, travel categories, and expense reconciliation.
Building a great SaaS application
Building SaaS apps requires using a different approach when compared to traditional development methodologies. Here’s what you need to do to ensure that your audience loves your application:
- Focus on the purpose of your product instead of the price
Most SaaS entrepreneurs build clones of existing products at a lower price without focusing on the purpose of their products. It is best to find an underserved need for your product and focus on fulfilling that need instead of touting a price point. When customers see your product fulfils their needs, they will unquestionably give your application a try. This is how I started using Canva and ditched my Adobe Photoshop subscription for it.
- Prepare informative content to help the audience understand your product
Your app may make sense to you but might not do so to your customers. Create content that provides real value to your customers. Your customers must understand what the application provides before they start using it. You can do this with blogs, informational videos and even podcasts.
- Offer a free trial
Try before you buy is a great way to get customers to use your product. Transitioning from one cloud-based application to another is a major step for any enterprise, and people need to be sure of the capabilities of your product before they make the switch. A free trial showcases your confidence in product quality and customers appreciate it. You can even consider offering a free tier with limited functionality—similar to what Google does with Google Cloud.
- Research extensively at every developmental stage
Know your customer well. Researching what your customer needs at every step of the way goes a long way in ensuring that you create a relevant application for your audience. Create surveys to ask customers what they need. You can even opt for video calls, emails and any other means to do so. A thorough validation before you start building will go a long way in reducing iterations that make you return to the drawing board.
- Avoid building apps that you do not need
Build features that your customers need, not the features that you want to build. Remember, too many features do not ensure app success. Successful apps understand the needs of their customers and provide them with exactly the features they need to succeed. Everyone loves to innovate, but sometimes it is good to understand that less is more. Build on-demand for the on-demand world!
How can Volumetree help you in your entrepreneurial journey?
We’ve been there, done that and created world-class SaaS services used by millions of people every day. Our SaaS clientele includes government agencies, multinational enterprises and small businesses. With our extensive industry experience, we can help you at every step of your entrepreneurial journey and help you to create a SaaS application that the world will love.
The IT world changes rapidly—so much so that the technologies we used less than ten years ago are irrelevant today. This has been made possible with consistent innovation and an unrelenting entrepreneurial spirit that refuses to accept the norm. At Volumetree, we celebrate the spirit of innovation and entrepreneurship and offer world-class consultation and development services that will help you successfully create and launch an innovative SaaS service.
Schedule a free 15-minute consultation with our SaaS product experts to know more today!