Ronaldo (1)10 Reasons Why Companies Should Seriously Consider SaaS Software Now
Software as a Service, or SaaS is a model where software is rented instead of buying it. Applications are delivered via the internet, accessed using a pc with internet connection and a browser.
The model has been implemented for quite some time now, but its popularity was exponential lately when businesses started to look for better yet cheaper alternatives to traditional, often costly and hard to implement business softwares.
However, in my almost 3 years of actively advocating for SaaS and Open Source technologies, I found that many business owners are still not aware of this model.
Most companies don’t see the “hidden” costs associated with investing in traditional business softwares. Thus, in most cases, implementing and maintaining these softwares are always costly – especially when costs are extended over a period of 5 years.
Here are the top 10 reasons why businesses should seriously consider SaaS today:
1. SaaS software is on a subscription basis, usually monthly. There are no license investment requirements at the start, which may cost as much as 5000USD per user in traditional softwares. Expending the subscription fees monthly is easier to manage than requiring big amount of capital investment in acquiring a software.
2. There are no annual maintenance fees with SaaS while traditional softwares require up to 22% of the license cost per user every year for maintenance and support. And in most cases, all you get are news updates, patches list and announcements.
3. There are no costly server requirements with SaaS. The Applications are served by the SaaS provider “online” using the internet. The Servers are usually hosted in Data Centers, which can handle multiple users from different companies accessing the same single Database. A true SaaS software is multi-tenant, meaning shared by many companies. This allows SaaS providers to significantly “lower” the costs of “using” its Software by way of economies of scale.
4. There is very little, even no IT support personnel required with SaaS. One of the hidden costs in owning and maintaining traditional software is internal skilled personnel required to maintain servers, infrastructure and do support. Others opt to outsource this – but costs are prohibitive for many companies, especially the SME’s (small to medium enterprises). The SaaS model puts the burden with the SaaS provider to maintain the applications, database and servers in tip-top condition. Support is also available when required – either by phone, web or email. And all these are already included in the monthly subscription fees.
5. Regular backup and disaster recovery programs (DRP) are managed by the SaaS provider. Business continuity is part of the subscription fees. Redundant hardwares are provided, and data and transactions are backed up and replicated in multiple servers in real time. The necessary bandwidth are also provisioned. Investing on these infrastructures to perform such tasks would require a very large amount of money for many companies.
6. Implementing SaaS softwares are relatively easier and faster compared with traditional softwares which may take years to configure and implement. Some of the best features of SaaS softwares are easy and intuitive navigation, user friendly design, and workflow driven. LAMP Enterprise ERP, a full SaaS ERP software was developed with these features in mind.
7. SaaS Softwares, once implemented, require very minimal or even ZERO on-site support. Traditional softwares may require extended on-site support which are very costly. The mere application of program fixes/patches may require a skilled technical person. SaaS Softwares are shared by multiple users, thus, once an error is fixed in one client, it gets fixed for all.
8. SaaS softwares are more flexible and scalable, contrary to some opinions that they aren’t. The SaaS provider/developer owns the program source codes. Although SaaS softwares are designed with best practices and universal usability in mind, custom requirements which will benefit many users can be easily implemented.
9. SaaS upgrades and enhancement releases are included in the subscription fees. Traditional softwares normally require periodic upgrades for reasons like, the earlier application or database versions are no longer supported, or there is an upgrade in the core design, or several major module enhancements. These upgrades in many cases require re-implementation, often with disastrous consequences. In my experience, big traditional ERP softwares on the average require upgrade once every three years.
10. The monthly subscription fee for SaaS softwares is all-inclusive, meaning all available modules and modules which will be added in the future are already part of your subscription fees. Traditional softwares are normally licensed per module – and you need to pay a significant amount of money when you want to use some modules in the future. This is the reason why very few implementation sites of traditional softwares can be considered “completely integrated.”
Getting that Human Resource module or payroll, or CRM to complement with your existing financials, supply chain and operations installation may not be possible due to additional prohibitive cost requirements.
Another cost benefit of SaaS software is its use of Open Source technologies and platforms. A company doesn’t have to pay for extra database or operating system licenses if it chooses to adopt Open Source applications.
These are the potential benefits of adopting SaaS to power business processes. It is surprising to note though, notably in the Philippines where there are a lot of SME’s that only a very few business decision-makers, from business owners to top level managers (the CEO’s, CFO’s, VP’s) seemed to be aware of this revolution and evolution of business softwares.
Gone are the days where only the big and multinational companies can afford to implement and use a decent business software to integrate its multiple processes and functions. Now, with SaaS model, everyone, even the smaller guys, can afford to have one.
10 Reasons Why Companies Should Seriously Consider SaaS Software Now | Bloggista.com…
Most companies don’t see the “hidden” costs associated with investing in traditional business softwares. Thus, in most cases, implementing and maintaining these softwares are always costly – especially when costs are extended over a period of 5 y…
I just wanted to add that there is an all encompassing reason on why SaaS should be considered. This model allows business owners and managers to concentrate on their core business. All 10 of these reasons lead to one thing, which is less head ache on the technology, and more focus on the business.
As more businesses look to software to run their day-to-day operations, its refreshing to see that the process is no longer intimidating. Especially for the non-technical individuals.
Vincent
MHelpdesk, Service Management Software
You are absolutely right Vincent. SaaS allows businesses to concentrate on what they do best – doing business, and leave the complexities of IT and technology to the experts.
SaaS should be considered because it can also help us to fight the global crisis which we are experiencing as of this time..
SaaS gives small businesses and those companies with limited resources to automate business processes in a more cost effective way. SaaS is so flexible you can subscribe for just two seats now, then probably 10 seats in the next 6 months.
A 2 or 3 – seat subscription is even cheaper than hiring an IT guy just to write or maintain a software.
Great points here. So many articles are bashing SaaS, but what people aren’t realizing is that nothing is perfect. Of course there are some shortcomings and disadvantages. However, when comparing with the advantages, SaaS comes out on top as a great alternative to traditional software. The bottom line is, a decision-maker needs to be informed – compare all the advantages & disadvantages, see what’s most important to you and where it falls in the comparison. There are a ton of unbiased resources out there. I’ve found some white papers at HyperOffice.com that are particularly informative.
Whats funny we people in IT used to be the visionaries and agents for change and cost savings. Now, many IT guys kill the SaaS idea even before it reaches the decision makers.
I agree, SaaS should reach the decision makers – the Top Management folks and in my experience, they are always amazed at the reality why it took so long before the learned about SaaS. Over the years, SaaS have evolved to be a better and cost effective alternative. The future will make it even more efficient.
yes. good point!
Some few years back we thought SaaS is not feasible for ERP however, the recent trend tends to disprove this. I haven’t seen any complete SaaS ERP yet but I believe its the future of business software.
It truly revolutionizes the business software industry – and now people begin to think traditional software (it pains me every time you imply Oracle and SAP are traditional software) are at the sunset stage. SaaS will be the future.
Its the normal product life cycle. Some great products have to be retired and replaced with new even better ones.
In these times of crisis, people clamor for better and cheaper alternatives. SaaS ERP is definitely a good alternative to traditional systems like oracle and SAP.
Saas sounds great for business backup. For my personal computers, I’ve been using SafeCopy, http://www.safecopybackup.com. In particular I was able to backup USB drives, share files and backup both my Mac and PC with one account. I’m very happy with it and it may be worth checking out.
The SaaS model works great for people who want the convenience of a ready technology/infrastructure and just pay for using it, rather investing on one. So it can be applied to emails, business applications, and backups. Good thing you found something that works for you. Thanks for sharing.
I agree. But SaaS Software when used should be monitored efficiently to ensure that everything works well. There a people who relies mostly on the software but don’t consider much monitoring…
Good point @Snow. This the difference between a poorly designed SaaS application and one that’s mature already. When selecting a SaaS application, one should also check if the existing users are happy with the software. One way to verify this is to talk to these existing customers.
That way, one will know if the product really works as promised. One has to investigate the provider’s support capabilities as well. Then there’s this “trust” ratings and open disclosures of server/access performance which will allow clients to see the service levels and the uptime vs. downtime of the hosted applications.
Hi B,
our company has been using software like this for the past year now and has shown to be rather profitable for both.
BTW
You have been tagged to save the world – See you at Empyty Streets 1027 http://emptystreets27.blogspot.com
XOXO
Hey Metz! its great to know your company is using SaaS. By now they should have already see the tangible results/benefits of using the model.
Btw, pardon for not being able to respond quickly to your tag of Saving the World. I left my super strength and cape somewhere I couldn’t fly. Hehehe. Thanks metz, will check it out.
Hi B,
hehehe I guess i should call you super b today heheheh
Hope that you are having a great week and a weekend to come 
Keep cool always 
xoxo
It sounds too good, I wish you success and good luck for your efforts.
Thanks dude! Fortunately, SaaS is already right here, right now. 5 years ago it seemed like a fantasy esp for ERP software, but now its a reality. Here in the Philippines, we have developed the first complete ERP using open technology and SaaS model. Probably the first in the world.
We will be officially launching this SaaS ERP by June in the Philippines. Although it has been used by some clients for more than 3 years already, we felt we ought to give a big launch.
few years ago SaaS sounds like a farfetched idea. yes there has been few murmurs about it then, but just doesn’t seem viable. But this idea coming up right now when things are happening so fast in the software industry, it feels like a breath of fresh air. I hope these will continue to evolve.
I invite you to the launch of the first ever SaaS ERP developed here in the Philippines bro. It will on June 18, 2009 at the Renaissance Hotel in Makati. For details check out http://www.saasph.com/ .
The advancement in internet technology, the availability of unlimited bandwidths and extra large data centers made it possible for SaaS applications (like ERP) to be a viable and better alternative to traditional systems.
I have a detailed Marketing plan for a mobile content business utilizing SaaS. Kaso nagloko ako di ko pinasa at nag drop out ako. Maganda kasi pag SaaS gamitin kasi you can focus on content (content based business ko ehehe) and you don’t have to worry about maintaining the database which I don’t know how to do.
If only malaki ang kita ko sa adsense. for sure lalago ang business kong yun. Baka binili na nga ang business ko by smart or globe by now
)
Hmmm, should you need a partner on this one, you know how to reach me. Hehe.
I am open to this venture also. Hehe…
This made me think
LOL – hope it means something good. Hehe, thanks for dropping by bro. Saw your site and it intensified my craving for food right now.
Good luck on this one bro. Hope you make those business owners see the light.
Thanks bro! Hehe, by the way there’s some percentage referral incentives on this one. Hehehe.
nice topics you have going on here!
is it rude to ask for exchange links?
=)
hope to see you around!
I think the major concern with SaaS, from what I understood, is security. Using SaaS would mean having your database managed by an outsider which can be a big No-no for some companies.
Aside from security, there’s also the issue of dependency. If a problem occurs, the company would be totally reliant on the SaaS provider for support, which brings about a control issue as well. Developing an in house system, although much more expensive, makes the company in full control of the system.
Earn and Save Money Now!
The improvements in technology, bandwidth and the savings in sharing resources should somehow help companies realize that its always costly for them to develop their own system.
In terms of security, whether SaaS or not, its always an issue, however, it will be costly for companies to implement all the infrastructure for them to be secured and problem free. They have to invest on costly business continuity and disaster recovery programs. These things are inherent in SaaS service providers, though I still believe that its always best to select a better and reliable SaaS provider.
In terms of Control issue, the SaaS applications are designed in such a way that only the data owners can access and manipulate their data – and not shared with others. There is still Control, in fact even tighter control than what many companies can provide to their own data.
This is a great new. It’s been a slow development for SaaS. I am just glad it’s coming up now. been a long for for it’s acceptance. hopefully it will continue.
You’re right Ron. Its gaining acceptance – and is touted to be the future of software. Hopefully, businesses will realize soon that what they are currently using is probably not the best option anymore, costs are getting bigger each year. With SaaS, like the SaaS ERP that we developed – the first of its kind developed in the Philippines, the software industry will change.
Let me know if you’re interested in attending the official launch of LAMP Enterprise ERP on June 18. Thanks for the visit.
Hi B,
Hope all is well. Been busy again hehehe so many weddings and hosting gigs coming up. Enjoy the weekend and remember to keep cool always
though i am totally from the village of idiots when it comes to these kinds of techy stuffs, i can see that using this platform is very much useful and also profitable for companies and organizations…and it will minimize human errors also
Its amazing bro how technology changed everything. Before when I was in college, we were doing recording of business transactions and inventory planning manually – using formula and calculators. Now, you just enter transactions in a system and voila! its there, accounting gets updated, inventory gets updated etc etc.
This really helps companies in streamlining their processes, and ensure that data and information are captured, and business is managed well.
Hi B,
It’s been long time, how are you? I guess you are very very busy.
Just dropping by to say hello!
Cheers,
Snow
Hey Ms. Snow thank you for the visit! yeah, this event that we will be doing on June 18 is keeping me busy these past weeks. But I should be back soon and then promote this product LAMP Enterprise ERP both online and offline. I have started the beta for referral, hopefully that one will be pumped up to life as well.
Hi B,
You have been tagged with a personality quiz
Hope you have fun with it as you discover things you probably already know and get pleasantly surprised with those that you dont 
Here is the url: http://emptystreets27.blogspot.com/2009/06/empty-streets-special-personality-test.html
Hi metz! Will check it out, thanks for the Tag!
I wonder if i still have some personality lately my nose’s under water these past weeks. Hehe, will find out.
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