What is driving the demand for SaaS?

There are both technical and business reasons driving the demand for SaaS:

• With the rise of the Internet and broadband connectivity, organizations are in the process of moving away from traditional computing models like client/server to more flexible multi-tiered architectures. As bandwidth costs continue to drop, it's now affordable for companies to purchase the level of connectivity that allows online applications to perform gracefully.
• Company's customers, who purchase goods and services, are demanding access all times of day and night, which means their IT systems must be available at all times, and to locations anywhere in the world.
• Company's suppliers and employees are demanding access to their IT infrastructure on a real-time basis in order to work. These global and ever-present demands require a flexible, robust, and secure application infrastructure that can be too complex and costly for companies to implement and manage on their own.

Perhaps most importantly, many customers are eager for the shift to SaaS, as they're frustrated by the traditional cycle of buying a software license, paying for a maintenance contract, and then having to endure time-consuming and expensive upgrades. Additionally, SaaS licenses also differ from traditional license plans in that SaaS licenses factor into the operating budget, whereas traditional software license plans (purchase, maintenance, and upgrades) usually require a capital budget that increases over time.

Thus, with a good SaaS provider:

• Customers don't have to invest in servers or staff to maintain them.
• Software updates, maintenance, and fixes are included in the price.
• Payment is on a per-user, per-month basis. Ideally, this is highly flexible and can be changed as often as needed.
• There is no long-term commitment, so customers can fire their SaaS providers if they don't measure up.

This differs drastically from the manner in which most enterprise software companies do business. With big upfront costs for software, installation, and hardware, often coupled with a multi-year contract, businesses have traditionally found themselves at a huge disadvantage in relation to software vendors.

When a customer chooses a SaaS application, there is no large upfront configuration cost with SaaS, though this can vary with the amount of configuration actually required. Also, the customer is usually in charge of the relationship. The SaaS vendor has to prove its value every time the customer uses the application, or the customer can defect to another software vendor. These are the chief technical and business reasons driving the demand of SaaS. 

“My ERP system needs to go SaaS. How do we get started?”

About Servora
Servora uses cloud computing technology to deliver CRM, ERP, Accounting, and Ecommerce applications via SaaS to small and mid-sized businesses.  See a list of solutions that Servora offers.