SaaS vs. Traditional Business Models: A Comparison

Have you ever considered switching from a traditionally deployed application environment to a web based Software as a Service (SaaS) solution? The article that follows is a commentary from a Cool Life Systems developer who spent many years as a server administrator and has now seen the “light” by making the switch to a SaaS company.  Enjoy.  Thanks to Bill D. for his time and effort in contributing the content.

As a former server administrator and customer support technician for a web hosting services company, and now a web developer for a SaaS-based company specializing in e-marketing and web presence, I can see the large contrast in the day to day workflow and operation of my current job which uses the SaaS model, compared to the more traditional business model of my former company.  While the services of web hosting and web development are not quite the same, there definitely are some parallels that can be drawn between the two.

At the web hosting company, new clients must pay a fee up front to cover the cost of the server we would be managing for them, the fee being dependent on the specs of the server. When their new server is built, the base server OS of the client’s choosing is installed, which also figures into their initial setup cost.  Already, this process deviates from the SaaS business model in a couple ways;
With the SaaS model, upfront costs are more or less eliminated. Instead of paying for a server, or in this case, a license for a standard software package, clients pays for only what they need, as they need it. This not only can greatly reduce costs for the customer, it also makes the developer’s job easier, as they are no longer trying to shoehorn clients into a single standardized solution, or trying to add every feature request from every client to it, resulting in bloated, clunky software.

In the web hosting world, operating system patching and updates can be a very tedious and disrupting task (for Windows servers, at least). Software developers following traditional deployment models can also experience these same drawbacks when releasing version updates to their products. Clients of these companies also suffer, as they not only have to wait until the developer releases the newest version for feature additions and bug fixes, but they often have to go through the pains of installing the update on every single device they use the software on. With the SaaS model, these annoyances are mostly nonexistent.  Updates are deployed on-demand when the client requests it, and since the source code resides at single remote location, the update takes effect on all devices instantaneously.

While the SaaS model may still be in its infancy compared to traditional software business models, it definitely has many advantages over them, and from my vantage point as a developer whose experienced both ends of the spectrum, I believe its popularity and success in the marketplace will only continue to grow.

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3 responses to “SaaS vs. Traditional Business Models: A Comparison

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