As a fledgling online retailer, you may be aware of the success that the more established retailers enjoy. You notice that their websites run smoothly, or that they have a presence on mobile devices, usually in the form of an app, and are able to handle customer issues immediately.
SaaS is what makes this all possible.
- 1 Defining SaaS
- 2 How SaaS Supports The E-Commerce Industry
- 3 Best E-Commerce Platforms for SaaS Application
SaaS (Software as a Service) is a cloud-based delivery and licensing structure in which the software is accessed on the internet via subscription or pay-per-use service instead of being downloaded to the subscriber’s computer. The provider of the software retains ownership of the apps, and it is their job to manage and deliver the software to the user. Software as a Service is also known as hosted apps.
How does it work?
Storage as a Service also uses the same abbreviation, but refers to the data storage model where a client leases storage space from a provider, transfers their data to the space, and accesses the data using the provider’s proprietary software. Storage as a Service is also known as cloud storage.
SaaS eliminates the need for organizations to install applications on their own computers or networks, and in turn unburdens the users from having to buy the necessary hardware and software, along with associated updates as they are released. At the same time, SaaS also removes the expense of support, provisioning and maintenance on the part of IT departments and other relevant parties.
SaaS is one of the three overarching categories of cloud computing. The other two are infrastructure as a service (IaaS), and platform as a service (PaaS). SaaS platforms have been around as early as 2010, when hosted shopping cart apps were in their infancy. Currently, SaaS has continued to evolve and improve to the point where they can run at larger scales and with far greater stability.
What are its benefits?
SaaS benefits both the providers and its subscribers, starting with reduced costs. As SaaS providers can deploy, debug, update, and patch their software all within the cloud, software maintenance from their end comes at a reduced cost. As for SaaS subscribers, they no longer need to worry about whether the currently installed version of the software is incompatible or outdated, nor do they have to keep paying licensing costs whenever there is a new update.
This also takes away the need to maintain a dedicated in-house IT staff to handle software issues, further saving money for the subscribers. Deployment of SaaS can occur to and from any location in the world, so long as internet access is available to both the provider and the subscriber, taking away the burden of network management.
Meanwhile, subscribers have the leverage to avoid having the software entrenched in their operations. Getting “locked-in” by the software vendor does not happen, and when it’s time for the subscribers to upgrade or replace the software with better options, they don’t take a huge financial hit in the process.
Another key benefit of SaaS is a highly significant increase in productivity for human resources teams. SaaS provides automated or self-service interfaces for applications related to logins, employment applications, and signing up for employee benefits.
For small and medium businesses, especially those for whom maintaining an HR staff is unsustainable, the cloud-computing environment of SaaS makes human resources more efficient. Managing employee information on a real-time basis is all but impossible under the traditional paradigm of human resources software.
Again, the scalability of SaaS HR applications cannot be overstated, as subscribers can implement the features they need when the time is right, and with little effort or learning curve involved.
Latest SaaS Statistics and Trends
The original business model for SaaS is Salesforce.com, which started in 1999. Currently, Sales Force Automation SaaS remains the current market leader, amidst software giants such as Microsoft and Adobe making gains in market share.
The worldwide market for public cloud services, which includes applications, storage, processes, and infrastructure, is forecast to have a value of $623.3 billion at the end of this year. Collectively, the global SaaS workload is expected to reach 380 million in 2021 and its market annual growth rate is currently at 18%.
The overarching philosophy seems to be that companies are looking to cut their internal IT costs across the board, leaving a gap to be filled by cloud-based services.
Following Microsoft and Adobe’s lead, software vendors in various industries, from health care, entertainment, fashion, transportation and hospitality, and many others are following the trend to convert their software into cloud-based offerings.
Other upward trends for SaaS include the prediction that by 2021, over 93% of CIOs will adopt cloud SaaS.
Another market entry includes Data as a Service, or DaaS. This works by providing companies with a high volume and a broad spectrum of cloud-based data at cheaper rates. For businesses adopting this technology, DaaS is expected to improve daily operations and decision making, by allowing more data to be transferred at a faster rate.
Shadow IT is the performance of IT tasks by departments other than those designated to execute them. Currently, this is one of the challenges faced by SaaS and cloud computing in general, but it comes with tremendous opportunities. Shadow IT exposes the lack of experience and knowledge that company executives have of the different processes their companies have. As new problems are identified, solutions arise. The end result: services will improve and become stronger and even more stable.
How SaaS Supports The E-Commerce Industry
Since SaaS is a subscription-based business model, the customer gets to pick and choose the services they want to use and need. As your business grows, you can add the upgrades and new features a la carte, at the appropriate times.
More apps and services are becoming cloud-based, and for good reason. For online businesses to set up and maintain their own servers to handle the vast amounts of data, the cost is too great to justify such an extreme financial commitment. The solution? More companies look towards outsourcing their storage needs to cloud server specialists.
High Adaptability Features
SaaS apps are not only available to traditional computers, but also on mobile platforms. In line with the advances in e-commerce, SaaS applications are keeping up with the demands of retailers and their customers who are always on the go. The high adoption rates can also be attributed to the idea that most people are well versed in using the internet on both desktop and mobile platforms to get things done.
Aside from scalability, customization is very feasible as well, since SaaS providers allow you to integrate the cloud apps with the existing systems you already have in place. Both your hardware and software infrastructure can remain intact, and you can scale up without worrying about incompatibility issues.
Lower Implementation Costs
In addition to the reasons mentioned above, the fact that SaaS apps are curated and updated on a central server means you can expect the software to be stable straight out of the box, saving you the time and hassle of having to customize or tinker the software to your preferences.
As the cloud grows, it matures. Since the beginnings of cloud computing, e-commerce has become more accessible and able to reach out to a larger customer base.
Best E-Commerce Platforms for SaaS Application
Launched on September 27, 2011, WooCommerce became the most popular open-source platform worldwide due to the fact that it’s free and very easy to use.
In spite of its easy installation and customization methods, it also boasts high-level performing functions in wholesale, distribution, and financial service industries. You don’t have to worry about complicated infrastructure and integration setups, this will give you more time to focus on your business operations and servicing your customers.
Cleverbridge offers full-service e-commerce on an international scale, driving the performance of B2C and B2B businesses worldwide. The company specializes in optimization, allowing you to sell to a worldwide customer base.
Shopify includes apps, tools, plugins, widgets and templates to help retail startups set up a fully customized and operational online store. As an online retailer, you can sell a wide variety of items, from clothes, accessories, collectibles, gadgets, and other products. The company also uses 128-bit SSL encryption to ensure the safety of credit card data, as well as Level 1 PCI compliant security to maintain the highest standards of security.
Olark is a tool that allows website hosts to chat with their visitors through their existing instant messaging software. By streamlining the communication pipeline, Olark helps you boost sales and resolve customer issues, while providing analytical reports to help you assess the performance of your chats.
Braintree is a company that develops e-commerce tools for programmers, handling payment transactions for mobile e-commerce companies such as Uber and Airbnb. Braintree provides free PCI compliance verification without requiring users to be PCI compliant on their end.
Cloudy days are upon us, and SaaS is here to stay. Are you looking to cut costs with IT? Let us know by leaving a comment below.