Beyond SaaS: Full-Service Subscriptions are the Next Step in Software Delivery
The manner in which software is delivered to consumers and businesses has seen a significant change over the past few years, all centering around the subscription-based SaaS (Software as a Service) model. Prior to SaaS, the purchase of software was a one-time event. A user or organization would pay a large up-front amount for the product, with subsequent costs existing in the form of a yearly maintenance fee that covered things like support and access to patches or hotfixes. This type of model existed at the individual consumer level all the way up to the enterprise market. The rise of cloud computing and better software hosting capabilities has allowed providers to move away from the old perpetual system and deliver their products under the SaaS model. With SaaS, the large start-up cost and subsequent maintenance fees have been replaced by smaller, recurring (generally monthly) payments. This monthly payment includes the same services that were once covered by maintenance fees, as well as hardware and operating system costs. All in all, subscription-based software licensing has made it easier for companies of all shapes and sizes to get up and running on a modern business software system than ever before.
Room for Improvement
While the current SaaS model adequately meets the needs of the end consumer, when it comes to businesses that are involved with much more complex and lengthy software implementations, SaaS represents a transition in how software is delivered, but not the endpoint. A look at these enterprise scenarios reveals that the software itself is only one part of the equation. There’s also the services side: the requirements definition gathering and gap fit analysis, the custom development work, the testing, the training, and the support. SaaS stands for “Software as a Service,” but why can’t we have…well…“Service as a Service,” too? A full-service SaaS where not just access to the software but all the associated services are handled through a single subscription fee. This is the natural next step in the evolution of software delivery. Here are some key ways in which the full-service SaaS model can benefit companies looking to get started with a new business application:
One of the strongest arguments for SaaS is a significantly lower start-up cost than the old model in which the software is purchased is up front. Well, if that argument holds true for the software, why wouldn’t it also apply to the services side of the equation, as well? When looking at a traditional business software implementation, for example, service costs can account for anywhere between 50 and 70 percent of the total budget. Although a subscription-based software model reduces start-up costs by lowering the initial price of the software, the implementation costs can still lead to some hefty invoices from the vendor. But if these service costs are factored into the monthly subscription fee, the overall start-up cost is drastically reduced, removing the barrier to entry for companies looking to get up and running on a new system.
Greater Vendor Accountability
The larger the up-front investment in a project, the more difficult it becomes to walk away if the vendor fails to deliver. The lowered start-up costs that come as part of a full-service SaaS program provide greater freedom to companies; instead of being “stuck” with a provider that isn’t meeting expectations, the customer who has invested less can more easily cut their losses and terminate the relationship. As a result, the full-service SaaS model holds vendors much more accountable throughout the course of a project or implementation. If a vendor cannot provide customers with the level of service or support they deserve, someone else will.
Easier Enhancements and Upgrades
The cost savings that come with a full-service SaaS model do not extend merely to the initial software implementation. As companies grow and expand, it becomes necessary to enhance and modify their software. Maybe a new business venture requires a customization to an ERP system. Or perhaps new trading partners need to be added to an existing EDI solution. Regardless of the scenario, as a business software solution is enhanced over time, all facets of this work, from the scoping to the development to the testing and delivery, are covered under a full-service SaaS subscription. And when it comes time to upgrade? Same thing. Distilled to its most basic form, the full-service SaaS model renders the idea of time and materials obsolete.
Better Teams and Talent
It’s no secret that subscription licensing benefits the software provider as well as the customer; the dependable revenue that comes from monthly subscriptions is an attractive proposition. But this clear benefit to the vendor is also advantageous to customers, in that predictable subscription revenue makes it possible to maintain the same service team that is in place to support the software. Instead of having to work with a different name or face with every support call or new project, customers can take comfort in knowing that the people who know their business the best will continue to be there for them.
Full-Service is the Future
The monumental changes in how software is delivered to users is not yet over. The trend towards subscription-based software will extend to the services side, ultimately resulting in all-inclusive solutions that can be deployed for a fraction of today’s start-up costs. Full-service SaaS is the answer for organizations that find the expense of a new software system to be prohibitive, providing them with the opportunity to experience all the benefits of a modern solution.