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Commerce Transformation Days: SaaS and PaaS models are the future of commerce.

Today, consumers expect convenience of operation, the ability to buy from anywhere and via a variety of devices, fast delivery of products and, of course, the lowest possible cost. For companies to implement dedicated systems that efficiently handle all these conveniences is a huge investment in time that, at the current rate of market change, companies cannot afford. SaaS and PaaS models come to their aid.

Business development of companies is going on at an unprecedented pace. New business models, new products and services are appearing on the market, the commercial success of which depends on a number of factors: rapid implementation, adaptation to the market environment and, finally, satisfaction of customer requirements. How do you, being a company, choose between SaaS marketing and reconcile these elements while keeping costs in check?

– Consumers are accustomed to the ubiquitous digitization of services and products. Wanting to properly respond to their needs, companies are constantly looking for ways to improve their operating models. Among other things, they are looking for ways to optimize costs and shorten the start-up time of IT systems for handling business processes. Until a few years ago, the implementation of a significant portion of systems consisted of a dedicated service. Back then, IT products were created almost from scratch or existing ones were adapted to the specifics of business operations. This implied a long implementation time of many months or even several years. Today, when the pace of market change is high, a similar approach can result in low flexibility. This can make a company’s choice of such a project implementation method result in a missed moment to build a competitive advantage.

Ready for anything?

Companies in the new dynamic times are no longer condemned to the “old” methods of operation. As a counterpoint to the old approach is the SaaS or PaaS model, which allows the use of ready-made products operating in the cloud, available for launch almost immediately after the purchase of a subscription or license. How does this work in practice?

SaaS is a model of providing software and digital products as a service for a subscription/subscription fee. PaaS, on the other hand, is a model in which an IT system/tool is made available in the cloud, which allows companies to reduce costs associated with maintaining, hosting and administering the system, as these activities remain the responsibility of the software provider/developer.

This is not a novelty because products in the SaaS model have been on the market for many years, but their popularity was initially widespread among small companies that did not have relatively large budgets to implement their projects. Examples of such solutions include Shoper, Shoplo or IdoSell platforms, which are popular among online sellers, where customers receive a set of ready-made tools for setting up and managing an online store. Due to the low flexibility of this solution (low susceptibility to implementing changes for specific companies and low propensity to customize applications to meet individual business needs), it has become a popular trend for e-stores to move from SaaS platforms to dedicated or open-source platforms once they have reached a certain scale and are able to finance more advanced systems, tailored to the needs and business context of the company.

Winds of change

However, technological changes in recent years have lifted restrictions on the development of SaaS software for individual business needs. Today, companies no longer have to choose between dedicated solutions, which are time-consuming to implement, but can opt for SaaS software, which will allow dedicated features to be introduced or added to the base functionality of the platform (known as core). This gives companies tremendous value in the form of a much shorter deployment time, rapid go-to-market with the service (go-to-market), significantly lower implementation and application maintenance costs.

– It’s clear that SaaS is now having its time. According to the report Paddle: State of SaaS 2022: A Meta Report in 2021, the average number of SaaS applications used in companies is 111, up 38% from a year earlier. The same report indicates that companies have increased spending on SaaS software by more than half. In turn, an analysis by McKinsey & Company shows that the value of the SaaS market globally has already reached $3 trillion with a forecast to grow to $10 trillion in 2030. This shows the great potential of this market and the dynamics of growth.

Wide spectrum of applications

The possibilities of SaaS are almost limitless. Already most classes of systems supporting business processes are made available in this model, among them such types of software as: ERP, WMS, CRM, Business Intelligence, price engine, marketing automation and many others.

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