Software vendors: top 5 reasons to switch to SaaS

Categories :


Table of Contents

2021 has brought important changes to our working habits, accelerating the cloud revolution. The rise of remote work led companies to rethink their IT infrastructures, putting more emphasis on flexibility and accessibility. This shift is convincing previously cloud-sceptic legacy software vendors to turn to SaaS, or “SaaSify their offer”. But your company still hasn’t made the big jump, and you’re wondering if it’s the right time. 

Software as a Service is a way to deliver digital products to customers online, without the need for them to install any actual program on physical hardware. But the technical side of things isn’t enough to define SaaS. The business model is as important. SaaS is sold on a subscription basis with lower up-front costs (or no cost at all). This means customers are free to upgrade or downgrade their subscription on a pay-as-you-use basis. If you’re curious about SaaS, consider downloading the free e-book we’ve written on that topic!

SaaSifying your offer means going through both a technological shift and a change in your business model. 

So why make the jump? The reason is simple: switching your offer to SaaS will allow you to provide your clients with all the advantages we’ve previously mentioned and many more. But what’s in it for you? SaaS is not just a way of making your customers' lives easier, it also provides vendors with many advantages such as: 

1- Predictable income

If you’re licensing on-premise software, you’re used to having the bulk of your income depend on your sales team and the deals they sign. You know how unpredictable this can be. Most on-premise software vendors’ revenues typically plateau once they’ve penetrated their target market, which can be limited geographically. They’ll then need to deploy new upgrades for their customers to purchase. If you switch to SaaS, however, you’ll discover the joys of a subscription-based business model and MRR (Monthly Recurring Revenue). As long as your churn rates are under control, you’ll be able to predict the baseline of your monthly or even yearly revenues. 

2- Shorter sales cycles

Change management can be a tricky thing, especially for enterprises. Buying a new on-premise software is a long process that can be filled with hurdles. It’s a costly one-time investment, which requires a long consideration phase. The old way of doing business is becoming slow and cumbersome. SaaS, on the other hand, is much more flexible. You can provide your prospects with special offers or free trials that will persuade them to give your software a whirl in a much shorter period. On your side, each new deal will increase your ROI, as you will not need to set up additional infrastructure to support each incremental customer.


3- Increased lifetime value

SaaS software vendors can distill new upgrades and additional features to their customer base, making sure that existing accounts keep generating increasing income. If you move to SaaS, it will become easier for you to improve your software and monetize these improvements. Additionally, the flexibility afforded by SaaS will allow you to accompany their customers as they grow: their accounts will grow with them. Finally, SaaS allows you to fight churn more effectively by investing in your relationships with existing clients and spotting potential dissatisfactions before they become a problem. More frequent upsells, more customer loyalty and less churn will make for a higher lifetime value for your customers. 

4- A broader customer base

Spreading your software through the cloud rather than installing it on your clients’ hardware also means your business can travel across borders. If you’ve always considered your target market to be limited to the specific area where you operate, you can now reach international prospects that you had never contacted before. You can also reach those customers for whom mobility is an important factor: pharmaceutical companies and their sales representatives on the ground, for instance. After two years of remote working and health restrictions, more and more companies will want to afford their employees the opportunity to work from anywhere and will need to rely on SaaS software that can be accessed from any location and any device. 

5- Happier customers 

It’s right there in the name: SaaS companies put a lot of emphasis on the service side of things, making sure their customers find the level of support they need while using their solution. Instead of paying for the right-to-use software, clients of SaaS companies are actually paying for a long-term relationship with their service provider. They know they will get continuous upgrades and assistance from Customer Care teams. Moreover, they won’t have to worry about the technical side of things as you’ll take the weight of infrastructure off their shoulders. You’ll be offering them more flexibility and a solution that’s easier to install and scale up or down. 

We know that moving to SaaS can be a long and resource-intensive process for software vendors. So we’ve written a comprehensive ebook to help them with the transition!



Why and how to integrate analytics into your offer

Watch the webinar

Build your first data stories in minutes

Get a Demo
Get the report

Table of Contents