If you’re in business, by now you’ll have heard a lot of people talking about SaaS. It’s a buzz phrase, and it’s one that you’ll see in almost any article about tech companies and software. But what does it mean for the rest of us? Well, up to a few years ago, buying software was a relatively simple matter. You shopped around for several years, waited until all your original options were out of date, picked one and then paid far too much money for it.
Ouch.
The good news is, that’s changed. It’s going to keep on changing. Because the world of software has been hugely disrupted by brilliant young developers and visionaries who have taken an old-media business model and applied it to their products. That model is called subscriptions.
SaaS means Software as a Service. Essentially, it’s a new way of paying for applications, and it’s a much more affordable option than any other. Under an SaaS model, if you have a piece of software that you need for your business, instead of paying tens of thousands up-front to purchase licenses for your team, and then paying exorbitant software installation and consulting prices to boot, you can pay smaller monthly subscription fees.
Depending on the software you’re looking for, those fees could range from $5 per user to hundreds – but there’s usually enough benefits to make it worth your while:
- Software as a Service applications will always be up to date. Once you sign up for a subscription, you’ll never need to pay another huge licensing fee to install the latest version, it’ll be covered right there in your plan.
- SaaS applications come with customer support included. No more paying consulting fees and support fees just to set everything up and solve errors that (probably…) aren’t your fault!
- SaaS applications are more affordable for the average SMB. It’s difficult to find capital to fund a business, but even more difficult when that capital used to have to go straight into software. With the new model, you can take the cost out of your regular running expenses.
So what kind of software is SaaS? Almost any kind you can imagine. For example, at Charltons, we recommend using apps like Xero to manage your bookkeeping and accounting. Completely cloud hosted and available for a monthly fee instead of an old-school buy in, Xero is a game changer that makes high quality accounting software a viable option for businesses of any kind!
Beyond that, you can find invoicing apps, health and safety apps, even graphic design apps that are all SaaS.
One important note though: in the long run you might end up paying a little more for your software than if you paid a one-off cost. Sometimes, the benefits can make up the difference, or if you just don’t have the budget for that initial spend it’s a simple decision. However, if you have more of a budget and you’re able to choose – it’s worth taking the time to calculate the cost of an SaaS product over the course of 2 years as opposed to the cost of an upfront fee!
