5 Big SaaS Challenges of IT

SaaS (software as a service), along with Infrastructure as a service (IaaS) and Platform as a service (Paas), are the 3 main categories of cloud computing. A way of delivering apps on the internet as a service is called software as a service (or simply SaaS). You access the software via the internet instead of installing and maintaining it, thus freeing yourself from complex software and hardware management. SaaS applications are often web-based, on-demand, or hosted software and run on the provider's servers. The provider manages access to the apps, including security, availability, and performance.

SaaS is a distribution model in which an application is hosted by the cloud provider and made available to the end-user over the internet. SaaS apps are used by IT professionals, business users, and personal users as well, as they are often marketed to both B-2-B and B-2-C users. As SaaS removes the need for installation and running apps on their computers, this eliminates the cost of hardware acquisition, maintenance, and software licensing. Customers subscribe to SaaS offerings rather than purchasing software to install or hardware to support. SaaS apps can be integrated with other business apps and are customizable also.

Working of SaaS:

Traditional software is provided as installation files, and users load it onto their hardware. However, organizations have now moved from owning the hardware to utilizing virtual machines, relieving them of some responsibilities. SaaS works through a cloud delivery model. The application and the related data will either be hosted by the software provider using its servers and databases or by an ISV (independent software vendor) who contracts the cloud provider to host the app in the provider's data center. SaaS is provided on a hosted platform in which the administrators do not have to worry about software updates or the hardware as it is the provider who takes care of such things. A multi-tenant approach is used in SaaS apps in which a single instance of a SaaS app will be running on host servers, and each subscribing customer will be served from that single instance. Thus, any device within a network connection can easily access the application. The multi-tenant approach of SaaS means the cloud service provider can maintain, update and fix bugs faster and more efficiently. Thus, maintaining one shared instance can make necessary changes for all customers. SaaS apps can be integrated with other software using APIs.

Some characteristics of SaaS are as follows:

• Multi-tenant architecture
• Easy customization
• Automated provisioning
• Data and app security
• Subscription-based cost

Despite the qualities mentioned above, there are some challenges associated with SaaS. Let us see 5 significant SaaS challenges of IT:

1) Identifying the market: The main challenge faced by SaaS businesses is the lack of clarity in identifying the market. SaaS businesses often define problems that nobody thought needed solving before. Hence identifying current market trends and solving contemporary issues is vital for SaaS businesses to succeed.

2) Security and risk: The foremost question asked while bringing a new software tool is what risk it poses to our digital hardware. One unsecure app or unauthorized access can cause a ripple through the organization. Hence, IT teams must explore whether apps are compliant, have a good reputation, and other details to overcome this challenge.

3) Establishing a feasible business model: Most SaaS businesses are sure that clients will subscribe to them in droves once they start their services. This is true for the initial customers interested in your services, but attracting further clients is challenging. You have to consider the expenses in acquiring a customer. If your customer acquisition cost (CAC) is higher than the lifetime values of the customer (LVC), then your business is spending more than what it produces. Inbound marketing can help you in keeping your CAC low and can help you overcome this challenge.

4) Problems with supporting systems: Most SaaS teams are too enthusiastic about their new services and features but often do not realize that no matter how excellent the product is, it is not enough to satisfy the customer in the long run. Supporting systems like onboard customer support, billing, etc., are equally important.

5) Complex planning and budgeting: IT and procurement can’t be certain about SaaS subscriptions, leading to poor budgeting and overspending. Redundancies and abandoned and unnecessary tools are reasons companies may be spending more on SaaS apps. Hence proper planning and budgeting are required to avoid excessive spending and optimum use of the available resources. 

Conclusion:

This article aims at giving insights into SaaS, its working, and significant SaaS challenges in the IT industry. SaaS has several obstacles; therefore, you must be well-prepared to deal with them. We help enterprises with tools that work best while staying within the budget, meeting compliance goals, and much more.

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