Rapid evolutions and technology have created a revolution in the industries worldwide and has changed the way one gets various products and services. Not only the efficiency and effectiveness of the product/service have increased but also the reachability, after-sales service, quality and the overall utility of the product/service has increased manifold. With the increase in traffic on online service providers, various models and service providers have turned the internet a perfect platform to provide their services. As there is a major shift of the population towards the digital world, and since the pandemic, there has been no escape or outing but the digital world.
A lot of online platforms have opened since, and are providing services, for example, Netflix, HBO Now, Amazon Prime, etc. providing OTT (Over-The-Top) services to the customers. With a greater demand for such online platforms and over the counter services, it has become widely popular is being readily accepted as it has gained trust and hype amongst the masses.
SaaS (Software as a service) is gaining huge popularity amongst the crowd and is becoming a very good source of income too. SaaS is a way of providing services over the internet as a service. The main difference is that one needs to maintain the software and the hardware of their systems to smoothly run the software but SaaS provides access to the software online without requiring any setup, taking care of the security, performance, maintenance of service, availability, etc. making sure one has a hassle-free and satisfactory experience.
What is SaaS Business Model?
The best way to understand a SaaS Business model is the functioning of a bank, as it provides service that is reliable and secure on a large scale, protects and maintains the privacy of its customers and making sure your data is safe and not shared without your authorization.
SaaS models not only provide ease of use to the customers but also has a strong potential in various industries and with the development of AI and other intelligent systems, the future possibilities are just endless for the same.
Advantage of SaaS business model
SaaS models look very lucrative in terms of revenue generation and attractive from the customer’s point of view, but one needs to understand the pros and cons of the same. As with a SaaS model, the only source of income is with the membership fee or recurring payments of the customers. SaaS model makes sure that customers can become insanely loyal to your service as they become ‘members’ of your society, also if the service provided is essential to their business or its functioning, they would not want to stop using it, thus adding to the profitability.
The main advantage or dream of those who have an online business is receiving recurring income. As SaaS models provide services over the internet, the startup investment costs for the same is very high, as one would require good developers, UI designers, servers, etc. to make sure that your platform is very easy to use and the interface is user friendly. Moreover, the capital generated is reinvested to enhance data capabilities, increase security, storage, also to keep the team to handle maintenance and other issues that may develop.
The effectiveness, scalability and profitability of SaaS models are no doubt full of potential and easy to understand but maintain the product actively is an entirely different ball game as it can be difficult even for people and knowledge of coding, also to market the model and finding the right niche and audience is equally challenging as SaaS models are either a hit or a miss. Examples of SaaS models are Zenforce, SalesForce.com, etc. The world of over-the-counter services is very enticing in terms of the earning potential but one needs to have thorough knowledge and understanding of the SaaS models, and that goes for all the business models but these models are a lilt more complex than normal ones.