Why has SaaS started to accelerate in the last 10 years? Why have established companies turned to the SaaS model? Is it because that’s a good model or to keep up with the trend? All this and more are in my post!
What is SaaS?
SaaS (Software as a Service) is a paid subscription service that recurs at certain intervals in order to use a certain technology.
For example, having more advanced features for the note-taking tool for $5 a month means that the model of that tool is SaaS.
Example SaaS Companies
Why SaaS is the best business model? The important thing for the SaaS model is to pay a fee in a certain time period. This interval is usually 1 month. In other words, we can easily say that if you have a SaaS product, you will get paid a monthly salary. If you work for a company, you know that your money will be deposited the next month. Or you know that your money will be deposited after 5 months. Why is that? Because you can predict. So what do you predict? Based on the past. Then we can look at the products with the SaaS model and say: Money comes every month.
Let’s say your product has 3 packages. $29, $79, and $199. Then if you find an estimated 100 customers in the minimum package, you will earn $2900. And we know that this is how much money will come in the next month. Of course, this is the minimum amount. If 20% of these 100 customers chose the second package. Assuming 5% also chose the third pack. (2079) + (5199) + (85*29) = $5040 monthly income. 5040$ monthly hot money!
Avoiding High Wages
This model has many benefits for the consumer as well as the producer. The biggest of these benefits is the avoidance of high fees. So cheap.
It used to be $2000 to buy even one of Adobe’s products. It’s not easy for a person to pay $2000. However, looking at the new SaaS model, it is more likely to pay $50 per month instead of 2000. Of course, it’s not a one-time payment, but it does mean it’s easier to pay. In the eyes of the consumer, it seems to be $2000 vs $50.
By using the SaaS model, we can access many technologies more easily with software services that are cheaper. I heard about Photoshop at a young age, but I didn’t have access to it. I could not improve myself in this field. Instead, I learned programming languages and today I have enough knowledge to build my own Micro SaaS product. On the other side of the coin, then I lost my interest and enthusiasm for Photoshop. Yes, I can use the program now, but I have no dreams or goals to be a designer. 🙂
In this period, the cheapness of software makes it easier to access them. People are divided into 2. Group 2 are successful people. The first group is very successful people. Very successful people are those who started these at a young age. For example, Bill Gates. He had access to computers at an early age. It will make a huge leap from then to now. And he did.
When we look at the repetition in certain time intervals, we can predict how much we can earn in the next month. If we made $1000 this month, we can earn $1000 next month. But there is also growth in the equation. With good marketing every day, you can reach more people and earn more money. A little bit above, we calculated from 100 people. When you look at this by calculating from 1000 people, you start to reach incredibly large numbers. And I repeat. MONTHLY! Why SaaS is the best business model? Because of this!
We can measure monthly as well as daily, weekly, annual, and total fees. This allows us to predict the future. How much larger can it grow? How soon can these fees be reached? With these questions, we trigger other questions as well. How can I double what I did this month? What strategies do I implement to grow faster?
Small Entry Barrier
If you want to develop a SaaS and you want to do it alone, its name will evolve from SaaS to Micro SaaS. And you don’t need big things to make Micro SaaS products. The barrier to entry is small. What does this mean? For example, How to Build a Micro SaaS? With Lemon Squeezy! In my article, I showed you how the Micro SaaS product can do it, together with the codes. But this means that we do not need to know to code. I explain there that this is possible with NoCode. I also mention which technologies you should use.
There are many resources on the internet. This blog is one of them. I try to write the best quality articles as much as I can. I try to explain everything with complete transparency. By subscribing to my newsletter and following me on Twitter, you can be notified when new articles arrive. In this way, you can obtain information that will achieve the goal you have in mind. As humanity, we are pulling down the barriers to entry a little more day by day, it’s up to you to do it or not. We are doing our best. 🙂 What about another “why SaaS is the best business model?” Is there? Yes. 👇
Some software would charge again with each release. Or, as new versions came, your systems would start to become inadequate. Currently, it is difficult to install the latest Photoshop on Windows XP. Maybe it’s impossible. There are problems with the version. In fact, as the updates came in the games in the same way when the new version came, it was tried to show the version to the people. This was difficult because the update process was not working as we know it now. The main reason Steam exists today is to manage these versions.
With the development of the internet, cloud technologies have emerged and we can finally access new versions without any updates or downloads. This corresponds to solving a big problem from the user’s point of view of the product being sold. More time savings!
SaaS products are long-term. You earn money for 3 years or 10 years as you keep going. These long-term goals require a good plan! Otherwise, you may lick your palm. 😁
Pros of the SaaS Model
- Fast growing
- Ease of Distribution
- Predictable Income
Cons of the SaaS Model
- Upfront Costs
- High risk
In conclusion, “why is SaaS the best business model?” In answer to the question, I can say predictable and sustainable income stream.
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