Top 5 Benefits of Transitioning to SaaS

GUIDE

Thank you for taking the time to read The Top 5 Benefits of Transitioning to SaaS, we hope the steps we’ve outlined help you with your approach in transitioning from a perpetual licensing-based model to a SaaS model. According to Gartner, the SaaS landscape market is expected to grow and by 2021 will account for 45% of all software options. Additionally, the total SaaS market as a whole is presently generating 20 billion dollars in quarterly revenues, growing at a CAGR rate of 32% and will continue to increase. We’ll look at the market landscape in further detail throughout the eBook.

The benefits outlined will hopefully help your organisation consider if a SaaS model is the best option to meet your business goals. With ever evolving technology, more competitive pricing and the removal of managing legacy infrastructure systems, SaaS is certainly the way forward for the future of the software applications market.

Introduction

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You can start your SaaS journey now and there’s no better place to start than reading this eBook!

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The SaaS Market Landscape 4What is cloud computing? 5The rise of the cloud computing landscape 6The rise of subscription-based services 7SaaS challenges and the reluctance to transition 8How SaaS can resolve these challenges 9 1. Cost efficiencies 10 2. Managed Service and Support 11 3. Scalability 12 4. Security 13 5. Cross platform accessibility 14

Conclusion 15Resources 16

Contents

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As technology continues to evolve so too does the evolution of the software industry. Software as a Service known as SaaS is a software distribution model in which a third-party provider hosts applications and makes them available to customers over the internet. Migrating services to the cloud ensures your organisation no longer needs to purchase bulk licences but can pay for services via a monthly subscription fee for example, for services and support.

A perpetual licence model is a type of software licence which the individual owns indefinitely with an initial period of technical support and updates provided by the vendor. According to Gartner, SaaS remains the largest segment of the cloud services market to significantly grow with revenue expected to increase to 17.8%, to reach 85.1 billion USD in 2019 and by 2021 will account for 45% of all software options.

SaaS involves third party providers hosting, maintaining and supporting software requirements with lower initial upfront costs and removes the need for organisations to install and run applications on their own environment or data centres. According to a recent research report carried out by Business Wire, the SaaS market is expected to grow at an annual compound growth rate of 21.2% between 2018-2023. This evidently reflects that the market is growing substantially, with the future of businesses gradually migrating to a cloud-based model.

The SaaS Market Landscape

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Cloud computing is the delivery of on demand computing services, this can include applications, networks, servers, storage, processes to AI – all purchased on a subscription fee basis. Rather than owning their own data centres, organisations can rent access to cloud solutions such as applications or storage. Cloud computing supports a vast range of services, consumer services such as cloud back up of photos on a smart phone, Gmail services, or access to online shopping apps such as Amazon or eBay. Today software vendors are increasingly hosting their services via applications which can be accessed online and purchased through a subscription model rather than a stand-alone option. Within cloud computing there are three cloud models, referred to as Infrastructure as a Service (IaaS), Platform as a Service (PaaS)

and Software as a Service (SaaS). IaaS is the fundamental building blocks of cloud computing that can be rented such as servers, storage or networking. PaaS includes the infrastructure and additionally the software that developers need to build on top of such as databases and applications. SaaS is the delivery of applications as a service that consumers use on a day to day basis, via the internet, usually via an app and on a subscription fee basis.

What is cloud computing?

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According to Software Strategies, cloud computing platforms and applications are proliferating across enterprises today, serving as the IT infrastructure which is forming digital businesses at present. Enterprise application of Microsoft Azure services increased significantly from 43% to 58%, whilst the enterprise SaaS market generated $20 billion in quarterly revenues across software vendors. A number that is growing by 32% per year. Microsoft is the growing leader in the SaaS market worldwide with a share of over 17% and is now the leading SaaS vendor primarily due to its leadership in the high-growth collaboration segment.

The rise of the cloud computing landscape

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The rise of SaaS is more prevalent than before with consumers using subscription-based services such as media subscriptions via Netflix, Spotify, and Amazon video, as well as ecommerce online shopping subscriptions such as Birchbox and Dollar Shave Club. An in depth survey on the rise of US shoppers subscription services in 2018 by McKinsey and Company reports that 46% of consumers they questioned subscribe to Netflix, and are now also turning to ecommerce type subscriptions, with 15% of online shoppers subscribing in the past year. The survey suggests women account for 60% of subscriptions with men having 2-3 active subscriptions.In the UK market, 27% have already signed up to a subscription based service and according to Royal Mail the rise of the subscription box market is forecast to grow stating it will increase to £1 billion in the UK by 2022. Royal Mail state the majority of users are currently

from the younger generation aged under 35, with female consumers aged between 25-35 receiving a subscription box service at least once a week. Similarly, nowadays the younger generation continues to make up a larger portion of the workforce. This suggests the younger workforce is expected to access the technology that is made available to them today both in enterprise software and for personal use.Subscription based services are fuelled by the adoption of cloud computing and SaaS solutions which are regularly used on a day to day basis such as Office 365, Gmail and Dropbox. But what is driving the shift towards these services? Having instant access and

updated information all via a range of devices it would suggest. Subscribers are promptly kept up to date with the latest developments or updates. For example, if a new series is released on Netflix, subscribers are emailed with the information and are also provided with suggestions as to what they might like to watch based on their interests. Consumers no longer need to wait for a particular TV series to be released for purchase in store and can instead view via their subscription. Additionally, subscribers are able to access such services via a range of devices anytime, anywhere.

The rise of subscription-based services

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Organisations often find the transition to SaaS comes with its challenges. Challenges such as the need to reduce business operational costs while improving IT processes, upkeep of cost requirements for storage issues and deploying cloud services over multiple geographic locations. Additionally, moving data can be a slow process because it requires a lot of bandwidth and resources and often organisations are concerned with the security aspect involving the movement of data and would have preference to hold their

data on local servers. Even though security breaches are rare, concerns do remain, especially for companies moving their data between clouds. Additionally, businesses often worry if there is a dependable infrastructure in place when moving to the cloud, especially when transferring to a third-party vendor.

SaaS challenges and the reluctance to transition

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Finance Online suggests SaaS technology has more to offer today than we can refuse and is slowly taking over the B2B industry. It is inevitable that moving to a SaaS based model is the way forward, and with customer expectations increasingly changing, businesses need to adapt otherwise they’ll be left behind. As daunting as it may seem, transitioning to SaaS has its advantages which may seem too valuable to overlook.

We review the top 5 benefits of transitioning to a SaaS model and considerations to think about when making the move.

How SaaS can resolve these challenges

5 Cross platform accessibility

1 Cost efficiencies

2 Managed Service and Support

3 Scalability

4 Security

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When purchasing a perpetual based licensing model, organisations are required to pay a costly upfront sum, however SaaS models reduce initial upfront expenses by spreading the costs out over a subscription fee which can be paid monthly or annually for example. Pricing can be based on the number of usage parameters such as the number of transactions made or the number of consumers or customers using the app.

Costs can also be significantly reduced in terms of hardware overheads as no physical equipment such as servers are required in the workplace environment. Furthermore, transferring the workload away from internal IT teams to an external vendor, eliminates additional work hours or downtime and therefore saving on time and costs. With on premise type models, organisations usually require an onsite technical or IT team to monitor their hardware and provide maintenance such as updates and

security patches. Alternatively, with a cloud-based model, third party vendors fully manage and monitor the service for your business, reducing the need for resources and so cutting down on expenditure, whilst also giving your teams the capacity to work on other projects.

Most SaaS installations can be set up with a simple internet connection and acquiring log in details. Upgrades, technical support, licences and hosting are all covered within a SaaS managed service, therefore renewal support costs normally associated with perpetual/on-premise type models and overall total costs are also decreased. The move to subscription-based models has increased and risen in popularity due to the reduction in upfront costs associated with more traditional licences. By implementing a cloud-based SaaS platform, organisations can cut down on the expenses it would usually incur on updating legacy-based

systems and infrastructure, as well as reduce the costs associated with operational costs.

With continual monitoring and updating, your applications will run smoothly, removing the need for unexpected support fees as well as storage and resource costs. Utilising the latest technologies within the cloud allows you to provide resources when needed, but also scale back during quiet times; this means that you only pay for infrastructure when you need it. Costs can be spread out over time, so you don’t have to worry about financial commitment as you would for perpetual licences upfront. Additionally, there’s no need to go through lengthy procurement processes, enabling companies to move faster on SaaS projects whilst only paying for the resources they use.

How SaaS can resolve these challenges

1 Cost efficiencies

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How SaaS can resolve these challenges

SaaS offerings are fully managed by a third-party provider, ultimately reducing the hassle for an organisation to manage if overseeing in-house. Whilst those thinking of transitioning from a more traditional to SaaS based model may find this off putting, this type of service is hughly beneficial. Managed SaaS providers operate everything for you including hosting, support, upgrades and licencing. This reduces the stress over monitoring hardware systems and worrying about installing the latest versions of software updates. A managed service ensures a smooth transition, all carried out for you, removing the strain to manage on your own environment. Furthermore, your business can enjoy additional office space with physical hardware no longer taking up room or your teams having to dispose of hardware as well.

A managed service option supports your in-house teams with greater capacity to deliver other in-house services and therefore accomplish customer expectations with less time spent managing infrastructure or network issues. Your teams no longer need trained on maintaining your infrastructure, instead those valuable resources can be redeployed into other areas of the business. Your organisation can take advantage of instant upgrades without the need to manually install. Currently upgrades require careful planning and allocation of staff to ensure that nothing goes wrong; it all becomes tiresome and something to avoid rather than look forward to. By having a managed service provider to handle this for you, your business can ensure an efficient service without any time-consuming disruptions.

2 Managed Service and Support

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SaaS platforms offer scalable usage based on the demands of your business, whether that’s adjusting the capacity for additional users or scaling back to reduce numbers. This gives your organisation the flexibility based on demand, allowing you to enhance the service as and when you need to, all in a simple, cost effective process. Scalability within SaaS subscription models greatly benefits businesses in terms of cost overheads as organisations will always have a clear idea of what predictable costs for both subscription and administration will be. As you scale, there is no requirement to invest in additional capacity for servers for example, you simply adjust your subscription fee.

How SaaS can resolve these challenges

3 Scalability

4 Security

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How SaaS can resolve these challenges

In recent years, data protection and GDPR have become a vocal point with growing awareness around data. Organisations often feel reluctant when moving to a SaaS based model with concerns over who has access to their data and how it may be used. However, one of the most important factors when transitioning to a SaaS environment for any internal IT team is to reduce the burden of safeguarding your infrastructure. Of course, understandably you are relying and entrusting a third-party provider to look after your cloud estate, which many businesses would be concerned about. However, with SLA’s put in place, off site back up, deployment, security threats, transferal of data through to vulnerability testing all taken care of - transitioning should be a secure, efficient process.

Nowadays, cloud hosting services are built to address the privacy demands of our customers and help safeguard sensitive data. This hopefully ensures peace of mind for organisations and their customers that their data is secure and stored separately per customer. Depending on the type of technology, most SaaS services have built in disaster recovery enabling information to be quickly maintained or resumed in the event of a disaster. When choosing a SaaS provider, it’s important to evaluate their security factors, service level agreements and the migration process to ensure security best practice.

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5 Cross platform accessibility

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How SaaS can resolve these challenges

A huge advantage of using a cloud based or SaaS platform is the access to services on almost any device, anytime, as long as you have access to the internet. This ensures instant availability to services, and information anytime, anywhere which ultimately boosts productivity and efficiency. Workforces who work remotely while out on the road, from home or across various sites will find this extremely beneficial and cost effective. Not only will this help reduce travel requirements and expenses, but it will also increase the ability to update information, respond to customers and increase communication amongst colleagues as and when required.

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So, there you have it, our Top 5 Benefits of Transitioning to SaaS. It is without a doubt that the SaaS market is expected to exceed in terms of growth. By transitioning to a SaaS based model, your business can benefit from increased revenue, greater agility and improved customer relationships. Managed SaaS services can help you achieve your business requirements as you grow without worrying about the technical requirements. Of course, the transition from perpetual to

SaaS will be determined by an organisations’ requirements, business goals and buying behaviour. With technology enabling more processing power, storage and security updates, as well as SaaS based models offering competitive pricing, more organisations will start to put their trust in transitioning to Software as a Service.

We hope you found this eBook insightful and that it has reinforced your confidence in the benefits of SaaS based platforms, including how transitioning can benefit your organisation.

Conclusion

If you’d like more information on how moving to SaaS can benefit your organisation, please don’t hesitate to get in touch on info@totalmobile.co.uk and we’ll be happy to help.

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https://www.techadvisory.org/2017/09/how-saas-can-benefit-your-business/

https://medium.com/pminsider/embracing-a-saas-business-model-aee39096c7c1

https://reply.io/top-saas-trends-2019

https://cloudacademy.com/blog/cloud-migration-benefits-risks/

http://www.wizmo.com/saas-101/why-saas-how-software-as-a-service-can-benefit-you/

https://financesonline.com/2018-saas-industry-market-report-key-global-trends-growth-forecasts/

https://www.essentialretail.com/analysis/rise-of-subscription-boxes/

https://www.mckinsey.com/industries/high-tech/our-insights/thinking-inside-the-subscription-box-new-research-on-ecommerce-consumers#0

https://www.gartner.com/en/newsroom/press-releases/2018-09-18-gartner-says-28-percent-of-spending-in-key-IT-segments-will-shift-to-the-cloud-by-2022

https://technologyadvice.com/blog/information-technology/four-advantages-of-software-as-a-service-saas-2/

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