The Essentials of Starting a SaaS Business

saas business

Software as a Service known as SaaS Business is a relatively new approach to software delivery and maintenance. Here, instead of developers selling their programs with a lifetime license or waiting until updates are released, companies market their software as a service to be used. This is usually done through a subscription and users access the software through their internet browser or an app.

The purpose of this is to give companies the opportunity to develop their products without having to build from scratch. SaaS offers an easy, affordable approach to digital development. It’s already proving popular, with Gartner estimating SaaS solutions generated close to $105 billion last year.

So, how do you approach setting up a SaaS business? What are the plus-points and areas to be aware of? Read on to find out.

Things to Consider Before Going with SaaS Business

Before you jump into building a SaaS-based business, it’s worth taking the time to build a checklist to help guide you. Understanding why you’re going with a SaaS business is beneficial for you. SaaS is designed to provide more than solutions; it’s meant to be a service that you can constantly upgrade and maintain, as well as providing support for customers.

From there, approach this as you would any startup: by asking yourself what the key points of your enterprise will be. Who’s your audience and what are they looking for? What’s your budget? Do you have the right technology?

Then, you’ll need to narrow things down to the specifics. SaaS development involves decision-making that will impact your budget. For instance, will you go with single or multi-tenancy architecture? How will you ensure everything is secure? How many features will you offer?

Try not to be put off here. There’s a reason that by the end of 2021, SaaS is set to be used by 73% of organizations. This is a cost-effective, accessible system that’s worth putting the groundwork into.

Finding Your Audience

Due to the way it works, SaaS is based on technological advances and trends. Tap into what’s current as this will help to serve your target customers better.

However, it’s important that you know your target customer. What do they want? What are they asking for? In order to define your SaaS system, you need to know who you’re marketing it to.

Once you’ve established who your target customer is, you’ll need to work out when and why they’ll use your product. Consider the user journey and, once you’ve established the circumstances that they’ll use your product in, you can begin working with developers.

The Challenges Involved

While there are many benefits of SaaS solutions, there are also potential challenges to be aware of. The four that you’ll need to be aware of are scalability issues, security concerns, questions around reliability, and the costs involved.

#1. Scalability

Scalability is an issue because your business can’t progress if you don’t have a tech stack that can be scaled up or down. If you’re just starting out with your SaaS enterprise as a startup, you could find that a non-scalable stack can lead to a slowdown as more clients use your service. In some circumstances, your SaaS service could shut down completely if the cloud service is overloaded.

#2. Security

Security is another concern. This comes with any cloud-based digital development, but you need to be able to reassure customers that their data is protected. There are legal aspects to consider here. Data security is crucial, and any breaches can have serious ramifications.

However, despite security concerns, 93% of CIOs are adopting or planning to adopt SaaS solutions.

#3. Reliability

The issue of reliability is also worth looking at. Generally speaking, SaaS is considered the most reliable cloud software maintenance platform. But it relies on servers and there’s the risk of these becoming damaged. Can you depend on these servers to not become fire or flood-damaged?

#4. Cost

And what of the costs? SaaS’s popularity has grown because of its reputation for being budget-friendly. This platform saves you from having to invest in the resources needed for building from the ground up. However, even though you’re not starting from scratch, there’s the possibility of things becoming too expensive. For instance, if you opt for multi-tenancy architecture, you’ll pay more, but you get the benefit of offering a more secure service.

Ultimately, the development costs depend on the factors such as design, number of features, security level, and the target customer. You’ll need to account for analysis, servers, design costs and programming, maintenance, support services, and the promotion of your SaaS service.

However, while the costs of these can add up, the benefits have the potential to outweigh the initial and ongoing outlay. Take your time to work out if SaaS business is for you and what your system could look like. It could be exactly what your business needs.