SaaS stands for Software-as-a-Service, and it describes a business model that offers customers continued access to software products that are managed centrally and accessed via the Cloud. A SaaS company generally charges customers a recurring monthly or annual subscription fee rather than a one-time upfront charge, and SaaS is considered an alternative model to the traditional process of selling a perpetual license to the software and possibly going through a costly personalized installation and physical setup.
When you hear the term “SaaS company” thrown around, you are likely hearing about a company that uses the Software-as-a-Service model, charging customers recurring fees for access to a centrally managed software product. Many companies that started out using a traditional model are transitioning to become SaaS companies, at least in part; and countless startups are classifying themselves as SaaS right off the bat. There are so many SaaS companies out there nowadays that listing them feels like going through the entire alphabet.
Indeed, SaaS has taken the business world by storm in recent years. The concept of selling access to cloud-based software and charging recurring fees for it, while not new, has gained so much traction recently that a Statista survey estimated the market has more than doubled in size since 2014, reaching nearly $160 billion. And it’s only going up as both buyers and sellers recognize the benefits of a SaaS model, generating a greater need for management and guidance for SMBs trying to navigate the market.
SaaS’s huge rise in prevalence has a plethora of causes on both sides of the transaction. Among software companies looking to establish more reliable revenue flows, the SaaS model’s recurring monthly/annual charges of customers are a huge draw. Selling software as a service introduces consistent and repeating sources of revenue from each customer subscribing to the product. The SaaS company can better predict the cash coming in and can have a stronger connection with existing customers, rather than trying to project the number of one-time sales they’ll be able to make.
Furthermore, SaaS exhibits a whole lot more scalability than other models. By centrally managing the product and using the Cloud to distribute it to customers, a SaaS company avoids the exorbitant costs and effort of countless localized setups and downloads for every single user. The software product can be created and improved all in one place, with few additional costs or barriers to adding new users.
SaaS has plenty of advantages for the customer as well. Outsourcing the hard parts of the software implementation process to the seller lets customers focus on their own work without worrying about setting up hardware or installing programs in their computers. The recurring nature of SaaS means that new updates, bug fixes, and improved features are included in the customer’s plan, no second purchase necessary. SaaS companies also tend to offer top-notch customer service and maintenance to regular customers. And SaaS products provide buyers the opportunity to pay for their desired products only for as long as they need them, rather than deal with the finality and large upfront cost of a single purchase that sticks forever.
The challenges of a SaaS future
The future may be SaaS, but that doesn’t mean it’s all fun and games. As businesses and individual buyers take advantage of the growing wave of SaaS products, they’ll likely find themselves overwhelmed by the collection of recurring charges it brings, the plethora of choices to make in the market, and the security challenges that come with dedicating credit cards and bank accounts to their SaaS subscriptions. That’s where NachoNacho comes in.
You can view NachoNacho as the ultimate SaaS company: we offer a SaaS product that manages, limits, and organizes all your SaaS costs (we know, it’s meta!). NachoNacho’s marketplace allows users to discover new SaaS solutions for every business need, as well as access exclusive cashback benefits. And the NachoNacho app and system of virtual NachoCards lets users track all their expenses and place customized limits on each SaaS subscription, all on their web browser. To get an even better idea of what SaaS companies are, head over the NachoNacho marketplace and explore the SaaS products available at nachonacho.com