SAAS Business Model and How it can save businesses money?

August 9, 2021
Artemy Kirnichansky

A SaaS company is a company that hosts an application and makes it available to customers over the internet. SaaS stands for Software as a Service. This infers that the software sits on a SaaS company’s server while the user accesses it remotely.

A SaaS company maintains servers, databases, and software that allow the application to be accessed over the internet — most likely by web browsers. Users can access the software from almost any device.

SaaS customers usually pay a subscription fee— often monthly — to access the application. Some subscriptions are based upon how much data needs to be stored, the number of users who will access the application, or the level of technical support desired.


  • Customer resource management (CRM) — These applications allow SaaS customers to manage customer information and track sales through their pipeline.
  • Enterprise resource planning (ERP) — This is a system of many SaaS applications most suited for big organizations.
  • Accounting and invoicing — Some SaaS companies focus on billing and invoicing services. Others offer a full range of financial tracking and reporting services.
  • Project management — Software can help collaborators communicate and stay on track.
  • Web hosting and ecommerce —  Remote servers can handle everything a business needs in its online presence.
  • Human resources — SaaS companies can offer tools to track employee hours, manage payroll, schedule and manage the hiring process.
  • Data management — SaaS products can help analyze and secure a company’s data.

The Advantages of SaaS

1. It Can Save You Money

Traditionally, deploying large-scale business-critical software systems, such as ERP and CRM application suites, has been a major and costly undertaking. Deploying these systems across a large organisation can cost hundreds of thousands of pounds. The time, staff, and budget requirements of a deployment of this magnitude represents a significant risk and expense for a business of any size, and often puts such software out of the reach of smaller organizations.

SaaS applications on the other hand don't require the deployment of a large infrastructure at the client's location, which eliminates or drastically reduces the upfront commitment of resources. Also, giving prospective customers a chance to try the software for a limited period before they buy it helps eliminate much of the risk surrounding software purchase. If a piece of software is only needed for a limited period then it is only paid for over that period and subscriptions can usually be halted at any time.

There are of course no additional hardware costs as the processing power required to run the applications is supplied by the cloud provider. There are also no initial setup costs as applications are ready to use once the user subscribes. Updates are automated; whenever there is an update it is available online to existing customers, often free of charge. No new software will be required as it often is with other types of applications .

SaaS applications are usually licensed with a usage-based transaction model, in which the customer is only billed for the number of service transactions used. Or, there's the time-based subscription model, in which the customer pays a flat fee per user for a particular time period such as a month or a quarter - and is allowed unlimited use of the service during that period.

2. Multitenant Architecture

All users and applications share a single, common infrastructure and code base that is centrally maintained. SaaS vendor clients are all on the same infrastructure and code base, so vendors can innovate more quickly and save the valuable development time previously spent on maintaining numerous versions of outdated code.

3. Easy Customisation

Each user can easily customize applications to fit their business processes without affecting the common infrastructure. These customizations are unique to each company or user and are always preserved through regular upgrades, with less customer risk and much lower adoption costs.

4. Get Better Global Access

You will get improved access to data from any networked device and at the same time make it easier to manage privileges, monitor data use, and ensure everyone sees the same information at the same time. All users will have the same version of software which allows for easier collaboration.

SaaS is accessible from any location so rather than being restricted to installations on individual computers, an application can be accessed from anywhere with an internet enabled device.

5. It will transform your IT Department

SaaS has the potential to transform the way your IT department relates to and even thinks about their role as providers of computing services to the rest of the business. With SaaS, the job of deploying an application and keeping it running from day to day - testing and installing patches, managing upgrades, monitoring performance, ensuring high availability, and so forth - is handled by the provider. By transferring these responsibilities to the provider, your IT department can focus more on high-value activities that align with and support the goals of your business. The department will have an opportunity to contribute to the success of your business more directly than ever before.

6. Ease of Management

SaaS applications are completely managed by the vendor or SaaS hoster; in fact, the implementation of management tasks and responsibilities is opaque to the consumer. Service-level agreements (SLAs) govern the quality, availability, and support commitments that the provider makes to the subscriber.

7. Cross device compatibility

SaaS applications can be accessed via any internet enabled device, which makes it ideal for those who use a number of different devices, such as internet enabled phones and tablets, and those who don’t always use the same computer.


SaaS companies work very hard at making their applications easy to use for users. And they try to make it just as easy to purchase their SaaS products. Perhaps too easy. Slow the process down and consider some best practices in choosing a SaaS partner for your business.

  • Find out what happens when you are no longer a customer. Can you get your user data back in a standardized format easily?
  • Test customer support. Just how good is it when you’re a paying customer?
  • Get as much training and migration help as possible. Or use it as leverage in negotiations.
  • Find out what is the backup plan. Nothing is bulletproof. There will be downtime. Have a plan for when the system is unavailable.
  • Look for data vulnerabilities. Speaking of vulnerability, does the SaaS company offer strong defense against hackers and data breaches?
  • Understand the prices. Look for hidden fees and what kind of usage will trigger a higher subscription tier.
  • Make sure your systems are compatible. The promise of SaaS is functionality on any device used anywhere. But does the application really work with all browsers or phones?

SaaS companies can provide needed business services at a low cost. Due diligence will help ensure the user experience matches expectations and promises.


Even if you find the perfect solution, there is a chance you won’t use it to its full potential. For complicated software, there is often a learning curve. There are a number of steps to take for each new tool your company uses.

  • Utilize educational materials — Most SaaS products have tutorials, knowledge bases and other material to help users get the most out of the product.
  • Speak with the onboarding team — The next level is to get on a call or video conference with a rep(s). Make sure key members of your team are there, too.
  • Consider third-party setup — Some SaaS tools are so complicated, having an outside contractor set everything up is ideal. The company may also offer this service.
  • Get the team onboard — The right tool paired with education and ample communication will make adoption easier, but all change takes effort to make it successful.
  • Re-evaluate use at regular intervals — After a few months, it’s a good idea to see if the software is doing what you hoped it would. This is a good, regular practice for every tool your company uses.

SaaS companies can provide needed business services at a low cost. Due diligence will help ensure the user experience matches expectations and promises

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