Why would you buy software any other way when SaaS exists?

Tuesday 20 October, 2020

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Insight Legal Chairman, Brian Welsh gives us his thoughts on why SaaS is the way to go.

Back in the dark ages when the internet was accompanied by the torturous tune of a dial-up modem, software was predominantly bought one way. The customer would pay a capital amount for each unit of the software they were purchasing and then an annual support or licence fee. There were variables, of course. The capital price could be per user, per device or some other unit of purchase, and the licence might be a percentage of the unit cost or a fixed fee.

Thankfully, we’ve now ditched dial-up and embraced broadband, but some consumers continue to buy software as Capital and Licence. I get why that’s a good result for software providers whose cashflow is boosted by all that upfront income. What I don’t get is why, in the age of SaaS (software as a service), customers would continue to do so. For me, there are so many obvious benefits of SaaS that it seems like a no-brainer.

These are my top five reasons why SaaS is the way to go:

  • Affordability

The pricing model of SaaS – which involves monthly subscription fees – makes purchasing what you need so much more affordable. It allows businesses, particularly start-ups or those with limited resources, to get up and running with the software they require super-fast and without spending big. Right now, when every penny counts for companies trying to make it through the nightmare of COVID-19, subscription pricing is an excellent solution. You aren’t paying upfront capital and licencing costs, merely renting the software from the supplier as and when you need it.

As part of the subscription, you’ll also get some level of support from the supplier. This is excellent news for businesses with multiple users who may need to ask questions or report problems from time-to-time. Instead of clogging up your IT department’s inbox with support tickets, your people can seek advice and help from the supplier team instead.

  • Immediate deployment

Forget having to carve out time in your packed schedule for implementation, SaaS allows you to get started without building infrastructure. It’s a simple case of download and go; meanwhile, the supplier themselves handles all the IT infrastructure. If you need to up the number of users or reduce them, it’s easy to do so with the click of a button, which gives you the flexibility you need to manage your workflow.

That’s great news for companies who suddenly expand and need to scale-up their users. It’s also good news if you are working with employees who need to travel or are based all over the world. Given that you only need a browser and an Internet connection, it’s easy to work on software sold this way wherever you are at any time.

  • Maintenance and Security

If you’re in charge of IT infrastructure, you are responsible for the maintenance, upgrades, security and operating system compatibility. Prepare to spend a lot of time dealing with the numerous gremlins that any one of those areas might unleash. For me, it’s a Godsend when all those things are covered in my subscription charge and taken care of by an expert team.

We all know how vital digital security is, and most SaaS providers have numerous data centres to handle sensitive business information and keep it secure. By doing so, they can revert to different data centre if anything happens to compromise their security. That sort of set up is often far more secure than the structures in place at smaller businesses, particularly those not handling large amounts of data or without a tech-focus.

  • Upgrades and performance

When your business relies on the performance and usability of your software products, that’s going to be your company priority. So, you can rest assured that software suppliers spend vast amounts of time and resource on upgrading and enhancing their products. The competitive software market demands nothing less.

As developments and upgrades happen, they are generally rolled out to all users and it’s easy to update the software. That means you can guarantee that you are using the best version of the software you rely on and get the benefits every time innovation happens.

  • Work with the best

SaaS purchases allow you to switch and ditch software that is left behind by the competition and quickly implement something new. It’s in your software supplier’s best interests to keep innovating and improving. If you deem that they’ve dropped the ball or one of their competitors is offering something better, you have the flexibility to change supplier without much drama.

Also, if the software company changes hands – as they so often do in the tech world – you aren’t stuck with a new supplier who doesn’t share the ethos of your original seller. You can simply take your business elsewhere. As the client, you are in control and able to make the decision that aligns best with your business needs and ethos.

SaaS Vs long-term savings

Finally, there will be people who point out that SaaS is more expensive than Capital and Licence in the long-term. They’ll argue that over seven years or so, they’ll pay more if they go down the SaaS route. For me, that’s incredibly short-sighted and a false economy.

If you are making decisions for your company to take you through seven years, you’ve fundamentally misunderstood the benefits of software innovation and what they’ll mean for your company in the moment. We all know that the world of software development moves fast, so you need to make the decisions that will bring you success today, not in seven years.

During that period, the company you’ve bought from might change hands, a competitor might release software that blows what you’ve got out of the water, or your business needs might evolve. If you get stuck using one kind of software for years because it was more prudent financially, that narrow thought-process won’t benefit your business – it’ll stifle it.

There are other ways to buy software, such as Pay Per Case, which may be right for certain specific products that aren’t required all the time. However, in my view, if you are utilising particular software day in, day out, going down the SaaS route makes the best sense. I’d be interested to hear the argument for sticking to Capital and Licence in this day and age, but I bet it sounds like a noughties modem that’s on the blink.