Rise of SaaS - The EE

Rise of SaaS

Software as a service (SaaS) in 2020 is booming as more companies stretch to develop programs and apps that are cloud based and integrated. The big fish in many cases continue to gobble up little fish that support their vision and can integrate into their portfolio. 2020 has become the year of 2 things Coronavirus and the rise of SaaS. Perhaps this will be the next box office hit, “ 2020, Rise of SaaS”, says Joseph Zulick, a writer and manager at MRO Electric and Supply.  

Software has changed its image dramatically over the past 15 years. When many of the software companies started their business models their goals were simple, develop software that solves a problem and does this for the largest market share as possible.

The next phase of this was to develop the program before someone else created the product and got it on a disc and into the market while it was hot. You then had to promote the heck out of it and get it into people’s hands before you rolled out version 2.0 approximately a year to 18 months later.

The next version had to work out the bugs and add new features; that became clear that needed new solutions and added enough features that would obsolete the first version. Many people or businesses didn’t upgrade every year and opted for a hopscotch approach where they skipped a version or even two.

So how did this change under Software as a Service (SaaS)? Software now has shifted to download form. There is limited production of software on discs. This makes for a convenient and instantly available delivery system. The advantages are that the disc can’t be lost, if something happens with the program you can uninstall and reinstall in catastrophic cases.

In our 24 / 7 world the availability at any hour is fantastic. I have fallen victim in the past of believing that I can just run a report on the weekend only to find out at 11 at night that I need another piece of software or an add on or plug-in to make this functional. Having this available saved me a few times.

Instant and automatic updates are another benefit to SaaS. If a program has important updates or security patch, this is done seamlessly. The updates mean that you don’t sell the program or design another version. The running update or version upgrades improve the user’s experience since they are always running the latest and the greatest.

It also means that for the most part, everyone is running the same version which minimises troubleshooting due to the version variances. This makes development easier but can complicate some programs who are not on board with the constant evolution of programs.

If you look at devices like tablets and phones, there is minimal money in these apps and oftentimes the program developers can’t shoulder the burden of staying on top of their required interface. If you’ve had a favorite app that is no longer supported you may see a cloud and arrow on your device showing that it needs updating.

When you click on it for the download you will sometimes see a message that the provider has not updated the program and you may still be able to use the old version. This is only the case until you get a new device and the app is not available in the App Store. As you can see even in the SaaS world there maybe some flaws if you have a poor business model. The business model for the SaaS companies known as Startup, Growth, Stability.

These 3 pillars are what makes the model easy to reproduce on a basic level. Startup – Getting Launched. Growth – increase in subscribers provides working and building capital and requires less tangible goods other than the program. Stability – comes from customers familiarly with the connection and the exponential growth builds tomorrow’s development.

Piracy, since there is no disc and the software is only an interface and runs in the cloud, piracy is much lower. (2) Josh Fechter has discussed this at length and has recently posed this very point. This is another advantage for the software company but don’t overlook the benefits to the user such as not being required on your device and instead, accessed through a web browser!

Thought leaders have discussed that the many app creators don’t have a sustainable model. Often these are not truly SaaS, they are instead thinking of their softwares in terms of products. Many of these are free!

Sustainability of these SaaS systems come from their subscription payments. This allows them to commit the resources to improving their software with a predictable income and not being subject to the ups and downs of the sales cycles of products.

The SaaS world is also one that has moved to the cloud. How many of the programs you have are fully functioning when not connected to the internet? Most have a built-in skeleton but can’t update the master without connectivity. I am typing this on a tablet and I can pick it up on another device and continue. This is only possible if the connectivity exists, without connectivity the data and its progress only exists on the device in the temporary memory, waiting to sync.

The behemoth companies who are living in this space like Microsoft, Intuit and Amazon Web Services, Oracle, SAP, Salesforce.

These companies have identified the path to success and have focused on user experience.

The companies that are working on the Software as a Service strategy have realised that users are now subscribers. Subscriber’s experience is what makes or breaks SaaS companies. This also now includes integrated Cybersecurity. All systems now that are integrating online, and cloud platforms need to secure their data. This does come with a risk as we’ve seen from the number of security breaches over the recent years.

Salesforce has worked hard to expand their offerings by buying up other companies that can integrate into their platform. These companies are also looking at crossover. If they are business focused, how do you move into the consumer market?

On the industrial side companies like AWS, are connecting with the manufacturing world by supplying Artificial Intelligence and IoT integration as part of their services. AWS is leading the way in this direction for several years and they have the horsepower to lead the way in this area.

SAP has been the big dog on the block with their systems and modular mentality which allows them to dictate to their business partners the format and protocols used in their communication interface. This is an incredibly powerful position and one that forces all other suppliers to take notice when they partner in working with manufacturers that are in the SAP family.

The Corona Virus has forced most companies into a work from home mentality and a protocol. Many companies have had some form of remoting-in to the company system but now we’re taking this to another level by asking people to do more.

Can you read data inside of your company? Do you have instant access to real-time manufacturing data? If you are working from home and you’re expected to have your finger on the pulse of manufacturing, your system better be integrated. It one thing to do zoom or skype meetings, but it’s another to ask your engineers and managers to work remotely and know real world data. This is why SaaS is pushed to the front of every company’s needs list.

Joseph Zulick

Whether you realise it or not SaaS is here and it’s happening right in front of us. If you have walked into an electronic store you can see how little space used by software today. If you do find the software, it’s probably an empty box, but filled with dreams.

The author is Joseph Zulick, a writer and manager at MRO Electric and Supply.

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