The Growing Importance Of SaaS Solutions In The Digital Economy

With 20+ years of experience in product marketing, business strategy and product management for cloud, Raman is renowned for solving challenges in Infrastructure as a Service (IaaS), Platform as a Service (PaaS), and Software as a Service (SaaS).

The widespread adoption of the cloud model has led to a substantial increase in the new Software-as-a-Service(SaaS)architecture. The SaaS business has seen a tremendous boom in the last decade. Massive changes have taken place in every aspect of the organisation, from on premises to cloud solutions.

If you are in the business of software, chances are you are already delivering or planning to deliver your services using a SaaS model. A combination of Internet based delivery, subscription based pricing and low friction product experiences make SaaS solutions valuable tools for their users and an excellent vehicle for software builders looking to distribute their products.

During the pandemic, SaaS application ideas have attracted many SaaS development companies with their cloud software services. The COVID-19 pandemic has necessitated remote work for a business.

The best thing about this SaaS wave has been that it has allowed a new generation of software builders to build and monetise applications and participate in the digital economy. Previously, you had to be a big company with lots of resources, name recognition and distribution networks to sell software products successfully. Now, irrespective of whether you are a single person working on a passion project, a small team of developers in a startup, or a small and medium-sized business (SMB), the SaaS model enables you to express your ideas in the form of software and deliver them to customers anywhere in the world.

It is also not uncommon to find micro-SaaS applications being built for specific industries such as retail, job functions such as accounting or marketing or tasks such as event management.

SaaS is the largest segment in the public cloud market. It is used to provide functionality ranging from personal finance apps for consumers, to productivity software for businesses, and even tools and services for software developers themselves to compose their applications and simplify their workflows. The reports state that the global SaaS market size is projected to reach $307.3 billion by 2026, from $158.2 billion in 2020, at a CAGR of 11.7 percent during 2020-2026.

The Unique Challenges Of Building SaaS Solutions
Software builders must answer key questions in their journey to building successful SaaS products. Understanding what customers to target, what features to prioritise, how to price your product and how to acquire customers are all critical questions to answer while you are building and operating the product.

Writing the code, testing, deployment, monitoring the usage in production and ensuring that your apps can handle the additional demand when the customer base and usage grow are essential and time consuming tasks.

Additionally, being able to test multiple ideas, pivot and identify the ideas that actually work is critical in the early stages of SaaS development. It is equally important to scale up without compromising on performance or reliability. All of this needs to be economically viable, since not everyone has the resources of large SaaS providers like Salesforce or Adobe.

Cloud Computing Also Poses Challenges
Fortunately, for the act of building and operating your apps, cloud computing can help take some load off your shoulders. Unless you have the scale and resources of Facebook, chances are you are not going to set up your own data centres to host the computing infrastructure that powers your SaaS company. Public cloud infrastructure providers can bring great value to SaaS builders by providing on-demand computing services with usage-based pricing. However, just like how the legacy software companies were not built for the SaaS model, the early (and big) cloud computing services were not optimised for the unique needs of small SaaS building teams.

Smaller SaaS teams face challenges with large cloud computing providers, including:

Too Many Technology Options
There are just too many options for tech stacks on which to build your SaaS programming languages, application development frameworks, libraries, runtime environments, architectural patterns and deployment models and the list is growing by the day.

The Complexity Of Cloud ComPuting Services
Even when you have decided on a technology stack, there is a lot of cloud vendor-specific terminology you need to learn and heavy lifting you need to do to build on the cloud, not all of which contributes to making your SaaS applications successful.

Unpredictable Costs
The experimentation necessary in early stages of SaaS development, as well as the scaling of applications required during the growth phase, call for affordable and predictable pricing from your cloud provider. The last thing SaaS teams want is unexpected bills from your cloud provider. Unfortunately, smaller businesses often experience unanticipated costs with cloud providers who are busy serving only the large enterprises.

You will want to remove the complexity and unpredictability of choosing a cloud to power your SaaS business. Always look for a service provider that has flexible compute options combined with many other tools so that you can build your SaaS precisely the way you want while saving on hosting costs.