SaaS saves on capex, labor, and makes your more competitive
There are many advantages to SaaS over the license model including stronger data security and better upgrade management. But one area that can be overlooked is the saving it labor and infrastructure that disappears with the SaaS model. There are significant advantages to SaaS because it eliminates labor, hardware, infrastructure, and utility expenses.
Supporting software applications on site requires expensive IT labor. Labor is required at the outset for planning and design of the infrastructure to support the software. Once installed, there are upgrades and backup procedures that have to be handled routinely. Any laxity in this area can leave you vulnerable to data security breaches ( see above) that can present significant liabilities. It should also be noted that because SaaS eliminates the planning and design stage, software adoption can be done quickly.
Next, there are the hardware expenses and their associated costs. You entirely eliminate the cost of servers ( and redundant servers). But you also save in other areas. Hardware takes up office real estate, which isn't free. Technology infrastructure also requires its own cooling, ventilation and humidity controls, and all of these increase your utility expenses. In-house technology has a way of creating a cascade of expenses that can be stopped using SaaS.
Finally, because SaaS eliminated physically located infrastructure, it has value in the area of business continuity and disaster recovery planning. Because the software and hardware are not located at your physical sites, any type of disaster–from power outage to hurricane–won’t disable your use of the application. Additionally, should a disaster make access to your physical offices impossible, employees can access SaaS from any registered device and from any location.
Finally, to add one more advantage, SasS functions as part of your business model. SaaS can make you more competitive. You face less chance of downtime using a vendor supported model, and you are able to respond to a competitive environment more quickly. SaaS, unlike an in-house plan, is immediately and instantly scalable, so you can respond to market needs as they develop in real-time. Finally especially for smaller business, by replacing the heavy, front loaded licence fees of a software purchase with monthly subscription fees you spread out the costs of the software use.
In summary, SaaS isn't a just a different way to buy software. It is a business model that helps you be more competitive. You are able to be more agile in a competitive fast moving environment, you offer your customers greater data security, and you save on expensive hardware and the cascading expenses that are associated with in-house technology infrastructure.