Did you know the average small US business spends between $10,000 to $49,000 annually on Information Technology? That’s noticeable when you realize the average small US business owner makes between $46,000 to $71,000. ‘But, it’s a necessary sacrifice.’ you might argue. That’s true. Modern businesses need technology and software to run. Your business would probably earn much less if you used accounting books instead of Microsoft Excel. But, switching to SaaS (or on-demand) applications would massively cut your IT costs without losing any data.
What’s a SaaS application?
SaaS is a software delivery method that uses cloud storage and the internet instead of installing software on your computer. Microsoft 365 is an example of a SaaS product. It gives you online access to Microsoft productivity apps instead of installing them on your computer. Since it’s online, two remote workers can even edit the same file online without transferring it.
SaaS is often referred to as on-demand software or web-based software. Most on-demand applications are subscription-based with monthly or annual payments instead of a one-time installation fee, just like Netflix. These subscription fees are also usually lower than conventional software licensing fees.
On-demand applications aren’t new, either. They’ve been around since at least 1999. Still, most businesses have only recently recognized their potential–you want yours to be one of them.
SaaS Vs. Conventional Applications
Conventional applications work fine, but SaaS applications work better. Here are 7 reasons why:
Lower initial investment
SaaS applications operate on a subscription model instead of demanding hefty upfront fees. The subscription model works best for smaller companies who only have to pay $50 for online access to an application that’d cost several hundred dollars to download.
You can even treat an on-demand application fee as an operating expense instead of an investment, which is easier to manage. You can also quickly scale up or down the features you want.
Most on-demand applications let you choose which additional features you want and add or remove the expense from your subscription.
2. SaaS applications cost less long term
You may think that SaaS applications cost more long-term because of their subscription model, but you’d be mistaken. The overall long-term cost of an on-demand application will almost always be lower than a conventional one. Conventional applications have hidden costs.
A conventional application’s cost includes the software and the cost of buying and maintaining hardware to use it. In contrast, on-demand applications work on any device with a browser, so hardware acquisition and maintenance costs are massively lower.
As a result, SaaS applications will almost always be cheaper long-term than conventional ones because of the reduced hardware and maintenance costs.
3. SaaS works the same on all devices.
The best part of SaaS applications, in general, is that they can work from any device with a browser. A $100 Chromebook accesses on-demand applications as good as a $2,000 Macbook. Any device with an internet connection works with SaaS applications.
So, team members can access SaaS applications regardless of their device. The result is that you have seamless access and functionality of on-demand applications across your entire organization.
Another huge benefit is that you won’t need to purchase expensive hardware for any team member if your entire organization uses SaaS applications.
4. No more IT issues
IT issues are one of the worst problems with conventional software. They both slow you down and cost you money. That problem virtually disappears with SaaS applications. First, you don’t need any hardware for web-based applications, so you can’t have issues on your end.
Second, any IT problems that happen are always on the application provider’s end. So, they’ll have their dedicated teams fix any problems you experience and administer upgrades, too.
5. SaaS works with existing software
Most of the time, using the SaaS application instead of a conventional one doesn’t mean switching to new software. Instead, you’ll just switch to the SaaS version of your current software and take all your existing data with you to the cloud.
For example, when you switch to Microsoft 365, you can upload your existing Microsoft Word documents to the cloud. You can then access them on the familiar-looking Microsoft Word online.
You’ll have all the same features on Word online that you had on the offline version. As a result, you get minimum disruption from purchasing a SaaS subscription.
6. Better data security
Understandably, over 66% of IT professionals rank security as their biggest concern in using Saas applications instead of conventional ones. After all, losing invaluable customer data means everything from losing our customer’s trust to being taken to court. Thankfully, SaaS application providers address this concern.
SaaS application providers are directly responsible for their application’s data integrity, and they’re fully incentivized to protect your data. SaaS vendors safeguard your data by having multiple servers across different locations and automatic regular backups.
In contrast, you have to manually backup your own files with conventional software. So, SaaS providers’ security measures are far greater than what most small businesses can achieve themselves.
7. Scaling up is easy
Scaling up on a SaaS application is a fast and straightforward process. In fact, in most cases, all you need to do is adjust your subscription according to your needs. You could even scale up every web-based application in your organization in less than a day.
Suppose you want to increase the number of users on your web-based CRM. You’ll just go to your Application provider’s website and increase the number of users in your subscription. You’ll have increased users on your CRM in an instant.
20% of businesses already report seeing improvements in their average marketing time from using SaaS applications instead of conventional ones.
Putting everything together, SaaS is a massive cost-saver for any small business. On-demand applications cost less and don’t need fancy hardware or maintenance costs. Just a device with a functioning internet connection will do. So, don’t shell out tens of thousands of dollars on conventional software like other small businesses. Switch to SaaS apps, and you’ll save millions of dollars long-term.