Software is increasingly displacing hardware: an industrial revolution is underway, the effects of which hardly affect any industry. For society and the economy, digital change is as important as the invention of the steam engine and the use of electricity in the past. The associated business model is also growing rapidly: Software as a Service (SaaS).
SaaS: How software is displacing established business models
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Saving photos and other files in the cloud and being able to access them from anywhere at any time has long been a matter of course for many people. With SaaS, the software is also stored centrally on a server system. This means that instead of buying software and installing it on a laptop or in a company’s server room, users obtain the service via the Internet.
The increase in SaaS is mainly based on the expansion of the fast Internet and certified data centers. The necessary basic technologies are so advanced and available that they can be used in almost every industry.
What matters: Consumers like to take advantage of when there are no minimum terms and shipping costs. When taking out a subscription, the decisive factors are the cost and time savings for the customer.
From an entrepreneur’s point of view, it has become increasingly easier to manufacture hardware in recent years. The raw materials have also become cheaper. If you want to be successful in the technology industry today, you have to have one goal with your products and services: to make people’s everyday lives more convenient, more efficient and safer.
With SaaS, the software can be used immediately and usually runs on any device. This means that the user can also access the same software and memory from anywhere on third-party devices.
SaaS enables concentration on core business
SaaS users benefit from several advantages: For example, the service provider takes care of software updates, the servers, the maintenance of the infrastructure and backups. This saves costs in software licensing and in the use of specialist personnel. There are no costs for software licensing – the application is purchased monthly in a flexible subscription model. This allows a company to concentrate on the actual business area. Companies should avoid complex tariff models if they want to be successful. It is important that the subscription model is as simple as possible. The easier it is, the more likely it is that potential customers will choose it.
Another advantage of SaaS models is their easy scalability, which is particularly relevant for start-up companies. When the company grows, SaaS simply grows with it: Whether 10 or 100,000 customers, thanks to the automation of billing, the effort for the company remains almost the same with subscription commerce.
Thanks to transparent costs that can be planned monthly, the company always has an overview of the total operating costs with SaaS. The software from the cloud makes budgeting easier, because costs and income are transparent and can be accessed up-to-date. This is how companies can plan their growth properly: Additional employees require increased subscription sales.
Highest security precautions in certified data centers
Security concerns about SaaS, especially in medium-sized companies, are unfounded. The security precautions of certified data centers exceed the security precautions of medium-sized companies many times over. The location of the data center also plays an important role. In Germany, the data is protected by one of the strictest data protection laws in the world.
SaaS will continue to grow and play an important role in the years to come. According to forecasts by Statista GmbH, worldwide sales will increase to 171.1 billion US dollars by 2021. This trend is also underpinned by a study by Strategy Analytics: According to this, more smart home devices, including speakers, locks and cameras, will be sold for the first time than smartphones in 2023.
Software-as-a-Service used to be only part of the economy, today Software-as-a-Service is in the process of restructuring the entire economy and making once successful business models obsolete. The corona crisis has reinforced this trend