The initial SaaS applications were developed to target small businesses requirements and even though SaaS usage by larger enterprises is on a rise, small businesses still remain one of the key end users of SaaS. To understand benefits of SaaS to small businesses we need to drill down the key challenges they face in today’s business word. Some of them specific to IT are:
- Rising Total Cost of Ownership of IT
- Rapid technology changes leaving IT product obsolete
- Increasing technology complexities
- Demand for information accessibility – anytime and anywhere
- Scalability as their business needs grow
We believe small businesses can benefit significantly using SaaS catering to all major pain points mentioned above in the following way:
Total cost of ownership is reduced because of:
- SaaS applications are cost effective because of the economies of scale they achieve from “multi tenancy”
- Very low capital expenditures (software, people, etc.)
- Low overheads associated with implementation and maintenance such as IT infrastructure, support staff, related software etc.
- Pay as you go service ensures payment based on requirement and usage
Easy implementation and upgrades
- Implementation is fast as the service is already up and running at vendor’s end
- The SaaS vendor ensures that the application is up to date and thus never obsolete in terms of technology and features
- Anytime and anywhere accessibility to applications through internet
- SaaS applications are highly scalable and can easily be ramped up to serve expanding business requirements
It is no wonder when asked about most important factors to adopt SaaS, small businesses have mentioned – speed of implementation, lower overall costs and converting upfront capital expenditure into operating expenditure based on usage as top three reasons.
All these benefits make sure that small businesses focus on their core businesses and do not spend significant time and money in running and maintaining IT systems and applications.