Why Companies Implement a SaaS Model

Are you using the right SaaS metrics to guide your business? Recently, I wrote a whitepaper on the SaaS model and key performance indicators that should be identified and tracked to improve performance and transparency, and provide a measureable road map to growth and success.

From the whitepaper titled, “Software as a Service: Key Performance Indicators for Founders and Practitioners,” here’s an overview of the SaaS model and reasons why companies choose to implement.

How SaaS Differs From the Traditional Software License Model

With a traditional software license model, the customer obtains rights to use the software on its servers and computers. Software licensing is generally treated for financial reporting purposes as a delivery and sale of a product.

With a SaaS model, the customer buys a hosted service based on proprietary software, but does not receive a copy of the software to use on its own. SaaS is treated as the sale of a service that is provided over a contract term.

Why Companies Choose SaaS
  • Elimination of upfront capital equipment purchases
  • License fees paid on an as-needed basis
  • Rapid deployment
  • Measurable ROI
  • Access to the most current releases in real-time
  • Offloading responsibility for up time
  • Back-ups are very attractive game changing features
SaaS on the Rise

As tighter capital budgets demand leaner alternatives, it is no surprise that SaaS adoption continues to rise within the enterprise application markets. Currently, more than half of CFOs at leading U.S. technology businesses are using cloud computing in some capacity, according to the BDO Technology Outlook Survey. More than 95 percent of organizations plan to increase their use of SaaS, according to Gartner. In the survey, CFOs cite cost flexibility (32%), increased scalability (32%) and improved business ability (29%) as the driving reasons for embracing cloud computing.

To view the entire whitepaper “Software as a Service: Key Performance Indicators for Founders and Practitioners,” please click here.