Business | 12 min read
Software-as-a-Service Application: Meaning, Examples, Business Model
The primary goal of digital tools is to help users and simplify their lives. Besides, it is crucial to make these tools user-friendly and captivating.
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Entrepreneurs and startuppers are always looking for a way to build something potentially exciting and easy-to-use. Nowadays, users don’t want to spend their time on complex applications that require too much time to install them. Time matters, so the faster — the better.
SaaS applications became the ones that are accepted well by users, and the majority of famous companies strive to create cloud-based software. What makes SaaS apps so accessible? What are the top SaaS examples that you probably use every day? This information (and more) will be clarified in our article.
What Is A SaaS Application?
Software-as-a-Service, or SaaS, is a type of software that is available for users on the cloud. That is, users don’t need to install the software as a desktop app, they need Internet connection only, and SaaS becomes available on demand.
Users of SaaS apps get access to applications when they pay for a specific period. In fact, users rent a SaaS app. Such apps become economically beneficial. And the main advantage for customers is that they don’t need to deal with technical issues like updates, installation, compatibility, etc. Launch and use — that’s the whole SaaS meaning.
Besides, the problem of piracy also comes to naught. SaaS apps cannot be downloaded, so users cannot save it and distribute it illegally. That is why SaaS products make all users play fair game.
How SaaS Works
As the SaaS app works in the cloud, it eliminates many limitations that common software-as-a-product has. For example, when users use desktop apps, they need to update apps on their own, spend time on customization, and the app is stored only on one device.
As for the SaaS software, users may get access to it from anywhere provided that web connection is available. However, some SaaS apps may even function in offline mode.
For a better understanding of SaaS application functionality, you should get acquainted with two other services like IaaS and PaaS that use cloud computing as well.
– IaaS (infrastructure-as-a-Service) is a cloud model where users may find infrastructure that contains storage, servers, firewalls, etc.
– PaaS (Platform-as-a-Service) is a platform that provides users with databases, operating systems, web servers — i.e., everything that allows users to build their software.
What Is the SaaS Business Model?
SaaS business model is a cycle of stages that all SaaS companies need to go through to succeed. The SaaS lifecycle includes three stages that you will find below.
– Startup stage. This stage includes preparation tasks that help you build a SaaS app. You need to draw up a business plan, identify the main pains of potential users, elaborate on the list of features, and strategy on how to make your app stand out. Then, you need to hire software development experts who will make a SaaS application from scratch. Cadabra Studio may provide you with a sufficient level of the required services for app development.
– Hypergrowth stage. The SaaS app is built, you launch it and start attracting first customers. Also, you need to monitor all critical metrics like bounce rate, retention rate, number of visitors, lifetime value, etc. If you want to retain as many customers as possible, you should know everything about users and respond to all changes immediately.
– Stability stage. If you worked hard and did everything correctly in the previous stage, you proceed to the stability stage. Your customer base is increased exponentially; the retention rate is high, and the bounce rate is low. Your SaaS app is popular. However, stay alert since the situation may change at any time, so keep on monitoring all vital metrics.
Ten SaaS Examples
The SaaS industry is evolving rapidly, and we are sure that you use at least one of the software-as-a-service examples every day. In this section, we will make a list of SaaS companies that are well-known and gained their popularity long ago.
Salesforce is a famous cloud CRM system. Besides, Salesforce may be used both as SaaS and PaaS simultaneously. Its SaaS features include customer analysis, data storage, marketing strategy elaboration, contact details of customers, etc. Salesforce is used in many industries.
As PaaS, Salesforce is used by developers to customize CRM, use integrated frameworks and other tools to develop new marketing or eCommerce software. Gartner acknowledged Salesforce as a top CRM system on the world market in the last thirteen years.
Google provides a range of apps that are widely used. Professional Gmail email service, Google Drive for personal data storage, Google Docs that are cloud text editors, Google Hangouts for video meetings. Google apps are included in the list of top SaaS apps since they are known for their diversity and high quality.
Adobe Creative Cloud
Adobe Creative Cloud is another SaaS application example representing cloud storage of various tools for designers, photographers, sound engineers, web designers. They can pay subscription fees monthly/yearly and use the required tools in the cloud. Today Adobe is the largest and most popular platform for the creation of UI/UX design and photo editing.
Amazon Web Services
AWS is a subsidiary of Amazon, and it is an enormous platform that provides more than 150 various services. It is used both by individual and large enterprises. AWS offers databases, IoT tools, machine learning platforms, blockchain solutions, robotics, marketing tools, storage, etc. Everything is available on the cloud so that users can get access to it from anywhere. Such companies like Netflix, LinkedIn, Facebook, and more use AWS successfully.
The following example of the SaaS application is a web service for mailing and related services. MailChimp allows users to collect contact databases, manage contacts, create letter templates, schedule emails, get reports, set up automated mailing, make landing pages, etc. Moreover, MailChimp provides users with an opportunity to share campaigns using different ad channels.
Zendesk is a cloud-based customer service that helps managers optimize their work and automate some routine processes. In fact, it is another type of CRM. Managers can communicate with customers efficiently via multiple channels like email, social media, phone, chat. Zendesk uses machine learning algorithms for automated replies, it has a chat service, and Zendesk Voice is a phone support service that offers comprehensive and efficient communication with customers.
Slack is a web and mobile service for communication between employees. It is a corporate messenger that is used by companies predominantly. Slack allows integrating active chats with other apps, and users can monitor the progress status of different projects easily.
Also, users can exchange files, create group chats, search by words, archive chats, synchronize all information on multiple devices, get desktop notifications, etc. IT companies actively use Slack for fast and fruitful communication between specialists.
HubSpot is a set of cloud-based tools for inbound Internet marketing. Inbound marketing is targeted at the growth of a company’s online presence, contributing to customer engagement and lead generation. HubSpot includes CMS tools for the development of corporate website and blog, SEO tools for website promotion, email campaigns, and analytical tools. HubSpot can be integrated into various apps like Gmail, Zapier, Mailchimp, and more, to enhance business processes.
Atlassian is a company that creates software that helps programmers in software development. Jira is one of the most popular tools built by Atlassian. It is a project management tool and issue tracker as well. IT companies use Jira to monitor the progress of projects, plan sprints, and other tasks. Also, Jira is used as a bug tracking tool. Jira is available on the cloud, and it also has a mobile version.
Microsoft Office 365
Microsoft Office 365 makes it possible to manage, edit, create, and share office docs using any device. It is a SaaS application that was built for more comfortable interaction with office files. Microsoft Office 365 is also available as a desktop version, but the cloud app gains momentum today due to its more extensive capabilities.
Top SaaS Trends To Make Your App Exceptional
What is the best way to build an app that will occupy the minds and hearts of customers? The answer is to keep up with modern trends. So you should know what top trends in the SaaS industry rule in 2020.
– AI. Although artificial intelligence is already not a new technology, a large number of apps strive to use AI for the improvement of business processes. So SaaS apps are not the exception. AI is the most innovative tech today in the SaaS market, and it helps enhance security, speed, automate many processes and build better relationships with customers, of course.
– Blockchain. Fraud and intransparency are two primary problems that any business may face. Thus, blockchain technology should be used in SaaS products to protect them and reduce possible security risks. When the SaaS app is created using blockchain, it uses distributed chains where information is transferred in encrypted form. It makes security level increase as well as customer loyalty.
– MicroSaaS. Another trend today that rapidly grows. MicroSaaS is a small tool that improves the existing functionality of SaaS. It is a perfect option for startuppers who plan to compete with massive enterprises. Thus, microSaaS lets people create add-ons, plugins, extensions for SaaS apps. Grammarly and Boomerang for Gmail are good examples of microSaaS apps. And one of the most significant advantages is that microSaaS requires low development costs, but it is potentially profitable.
– Mobile-friendly approach. According to Statista, the number of smartphone users worldwide reached 3,5 billion to date compared to 3,2 billion in 2019. If you are planning to build your SaaS product, mind to make it responsive and mobile-friendly since people prefer using mobile devices more. As of June 2020, mobile devices traffic is 50.13% compared to 47.06% of desktop traffic, according to Statcounter.
The SaaS application may become a good idea for your first startup. The only thing you need is to apply the SaaS business model wisely. If you want to know more details about SaaS app development, hurry up to read a relevant guide from Cadabra Studio. You will find there SaaS app advantages, types, steps to follow, and challenges to avoid.
The development time and cost will depend on your future project requirements, and our business development managers will be glad to provide a detailed estimate upon your request. Get in touch with our specialists at any time, and we will find the right troubleshooting solution for you.