SaaS is the Right Model for your Software Business

The SaaS market is expected to account for nearly 85% of all software solutions sold in the future, according to IDC and Gartner Group. This means that businesses are moving away from licensing software, to the subscription-based SaaS model. ISVs are changing their business models to SaaS as well, to take advantage of this growing trend – and for good reason:

a) Stable monthly, quarterly or annual revenue, as opposed to unpredictable revenue from software license sales.

b) Customer support and personnel costs are minimized. Developers support only one instance of an application, hosted on the SaaS provider platform, instead of multiple instances hosted on individual customer platforms.

c) New software releases are installed one time, on the hosted system. All customers are running on the same release – simultaneously.

Many independent software vendors are switching to the SaaS business model to participate in the growing on-demand market by offering their solutions on a subscription basis – an approach that offers higher revenues and profit margins.

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