What is SAAS product? Defination, Benefits and Examples

What is software as a service
What is software as a service

Whether you are going to learn or going to buy, this article will help you understand what is saas product, benefits of software as a service for businesses and software as a service examples.  We want to explain this service in the most simple way so that you can get everything around it clear. 

VTSoft Review is your place to find the best Saas Products and Service. 

What is Saas product?

Saas, also known as Software as a service is essentially a new method for delivering software applications. So at your work on your computer, you have tools to use for handling tasks.

What is software as a service
What is software as a service

Back in the days when software used to be installed on local servers, when going to the bank you saw that they’d have terminals with black screens and text and they would just hit F1 and all these buttons to connect to a more powerful server. 

But things are changed now in the delivery method. You can use the internet to get access to these applications, these softwares are as a service.

A lot of people make the mistake, they think any subscription is SAAS. It’s not subscription as a service, it’s software. It has to be a tool. And it’s usually delivered through a web interface or a mobile app. It’s the idea of using the internet instead of a local network to deliver the software. 

This is software as a service definition. The next part will explain it more clearly. 

Why is it new?

Back in the day you used to have to buy the hardware, there were lots of things to do.  You had to buy servers. You had to buy the software from the creators then you had to install it in a server room. Then you had to set up terminals to get people to access the server so they could do the applications, the accounting, the management of business and whatever. 

What changed now is that there is a thing called ASP (application service provider). If you don’t want to invest millions of dollars in servers and software licenses, et cetera, you would just pay another company to host it for you and then they would charge you a subscription for it. 

It is sometimes a multi-year contract but they won’t make you have to pay for the whole upfront investment. And you could just pay for the amount of usage you have. For example, if you have ten employees this year then 100 employees next year, you only have to pay the same price to use the software. 

The challenge with the ASP model was that these application service providers would then have all these different versions of software and system  across all these servers, because some companies would upgrade, some other companies could configure and change the code. And essentially they had literally a server farm full of different sources. There was no efficiency, what happens with software as a service when you are connecting into the same code base , even though they will provide security separations called multitenant, not getting into the technical terms.

But with software as a service now, instead of having a company that manages all these different softwares, the software company says “Look, we will host it for you, we will put it up on the internet, we will give you the ability to add your team members and security and all this stuff. And you pay us a monthly subscription for it.”

So that’s where software as a service allows you essentially pay by the drink, you don’t have to pay for the glass or the jug of water.  Software as a service allows us to not have to make a big investment upfront and have somebody else host it for us. 

Read more: 

  1. What Makes a Good SaaS Product?
  2. SaaS vs PaaS vs IaaS

Why is SAAS preferred?

 software as a service benefits

There are four main reasons why Saas products are preferred as a business buying software

Opex versus Capex

Operating expenses are things we can write off. For capital expenses, typically you can’t write them off. You have to depreciate it over time, servers, software and all that stuff those in the past were capex capital investments. Now what happens is Saas becomes something that you can pay for to deliver business like you use the tool to deliver value to customers. You can now transfer this over to operating expenses. Operating expenses you can write off so it’s actually more tax efficient.

Time value of money

Instead of having to have $2 or $3 million dollars or going to borrow $2, $3 millions dollars to buy what is called an ERP (an enterprise resource planning) tool to run your company. Now you can pay a little bit every month and get that going. You don’t have to put a lot of capital today into a big investment. You only put a little piece of capital on software so you have more capital in marketing, in sales, in customer success to grow your company. 

Speed of deployment 

If you need to procure the hardware, install the operating system, find a place in a data room and do all this work, it might take you months to make decisions, prepare things, and get them into the operation in your company. 

Now, with software as a service you can just literally go online to start a trial, check it out, add all the people in your team. And you could log in the software at the same hour to do work.

Instead of buying the server and installing the software and  then care about the success of using the software, now you, as a business owner, put the success of software back onto the software creator. Because if it is not easy to use, it is not easy to get deployed, it is not fast to get value then you are just gonna go to find somebody else that solves a similar problem. 

And because there is no effort, you didn’t make a big investment upfront, you are just in a trial to find the best service provider. 

A lot of software services have a trial of 14 days, 7 days, and even 30 days for you to play with it, to see if you like it.

The software creators have a responsibility to make it better, faster, and clearer. When the software can integrate with all other tools in your company, for sure, you would create a beautiful wonderful thing in your business. 

Its speedy growth

This is a famous investor entrepreneur named Marc Andreesen and he had a great quote that kind of summarizes why it has been growing 40% compounded year over year. And that is that software is eating the world. It means everywhere you look, no matter what your job, your role, your business, your functions is, there’s probably a software that help to get rid of manual process, the requirement to be creative 

Examples of software as a service

Look at an example like Canva. Canva is a simple tool that allows anybody that wants to create social media assets, different imagery promotional materials, et cetera. You don’t have to be a designer or not have to buy photoshop or even know how to do those tools or even know what good design looks like.  Canva takes care of all of it. By the transaction, by the month, you can pay them to have access to this powerful tool to create beautiful images and videos. You know, you only have to pay $10 or $15 a month to make your company become an incredibly powerful business. 

Canva is an example of software as a service

Google docs is an example of software as a service

Besides, there are a lot of Saas products for marketing email, sales management, customer relationship management (CRM), financial management, human resource management (HRM), billing and collaboration. Some popular names are: 

  • Salesforce
  • Google Workspace apps
  • Microsoft 365
  • HubSpot
  • Trello
  • Zoom
  • Zendesk
  • DocuSign
  • Slack
  • Adobe Creative Cloud
  • Shopify
  • And more 

On VTsoft review, we will introduce hundreds of Saas products, and provide you lifetime deals to save on the price. 

You see software as a service meaning is not difficult to understand. Through this post, you understand the definition of saas products, their benefits, and have some examples.

Continue to follow VTSoft Review to equip yourself with other necessary knowledge to run software and run your business well. 

About Donna Baily 15 Articles
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