What is SaaS and why it may be of interest to merchants?

What is SaaS and why it may be of interest to merchants?

Technological progress and innovation are something that improves our experiences and the world around us. In turn, new industries and concepts appear each year, and it’s not always easy to follow all of them. To some, Open Banking and Bigtech are not familiar topics, others don’t know much about enhanced connectivity and the internet of behaviors.

Thus, today we explore SaaS, which is something impactful not all people can be fully aware of. Want to learn how SaaS benefits both people and companies, and why some merchants find this sector profitable? Then this Maxpay blog is what you need.

What is SaaS

One of the common SaaS definitions (Software as a service) is that it is a software distribution model, using which people and companies can access software applications through the internet. In other words, the applications are hosted by third-party providers (TPPs), meaning that their clients can use software online and don’t need to install and maintain it locally.

SaaS, also known as on-demand software, is a part of cloud computing. The latter is a technological capability of connecting to, storing, and delivering multiple computing services through the internet.
As with many technologies nowadays, the key to the success of SaaS is convenience. For instance, a business that would like to use on-demand software only needs an internet connection and to pay a subscription fee to access it. The business doesn’t need to waste time installing or even developing its software and updating it afterward. 

What are the software as a service examples?

Maybe it’s as obvious at first, but you probably face SaaS products every day, and no wonder: we are more than knee-deep into digital transformation, and many services are now available online. 

There is on-demand software for a plethora of things: from information storage and e-commerce to customer relationship management and enterprise resource planning.

One of the most common examples is Microsoft office tools: even now you can log into your account, open a Google Doc and start typing whatever you want – no need to install anything to do this. 

Another example of a SaaS application is Shopify – an e-commerce platform, using which merchants can own online shops without going through a long process of setting up their websites. By the way, Maxpay’s services are also available for Shopify users: learn how you can easily process transactions with a single free plugin integration in this blog. 

There are, of course, a great number of other on-demand software examples that are completely different. Like Zoom, which uses cloud computing capabilities for video conferences, and plenty other SaaS for social media management, video creation and editing, customer support, design, marketing, etc. 

SaaS in cloud computing: the difference between SaaS and cloud

Some people consider on-demand software and cloud computing to be the same thing. But they are different. As we’ve mentioned before, SaaS is just a fraction of cloud computing. Cloud computing uses the internet to deliver computer system resources, like servers, storage, databases, networking. Therefore, it is far broader than SaaS, which only gives access to the software.

When using cloud computing, you rent infrastructure and services to create or improve a platform, service, hardware, or software with its help. Thus, cloud computing is primarily used by IT specialists, developers, app vendors, etc. 

Yes, SaaS is developed with the help of cloud computing, but you access it through a vendor the specific SaaS solution belongs to, and pay a subscription fee for it.  

Benefits of SaaS

After covering all the main aspects of the software as a service, there are some clear advantages to this software distribution model:

  1. Quick and easy access. This is the most talked-about thing when it comes to on-demand software, as all you need is a stable internet connection and a subscription to use the service. This kind of accessibility is valued in the modern world: many businesses go for fast and convenient solutions to cut down on development and staff hiring expenses. But it is not only about convenience, but a necessity as well. You see, when lockdowns hit many countries in 2020, many businesses had to close some of their branches and go through corporate downsizing. This means losses in qualified personnel and access to equipment and software, which some SaaS applications were able to compensate for. The events of 2020 added more demand and credibility to SaaS providers, pushing its growth. It is expected, that in 2027 the global on-demand software market will reach $346 billion, while in 2017 it amounted to $104 billion. 
  2. Save money and don’t worry about software updates. With software as a service, everything is ready for you to use. So, you don’t have to waste time and funds on developing your own software, as well as making necessary updates. Software as a service companies upgrade products themselves and offer you new solutions as time goes.
  3. Choose from many options. Lots of on-demand software solutions offer free trial periods for you to experience. If multiple SaaS provide services you need, you can potentially evaluate each of their features and choose the best option for you. Also, SaaS platforms offer different subscription options, so you can get services on the most favorable terms.  
  4. Simple collaboration. It is sometimes easier to work on a project when multiple people have access and edit it in real-time. And SaaS can do that: in many cases, you can add many teammates to complete the task, and once again, all is required is an internet connection. 

As you can see, there are many benefits to using SaaS, especially nowadays, when the digital transformation and the uncertainty about working conditions of physical branches drive the market. That’s why if you are a start-up business and are interested in working in a cloud computing industry, developing on-demand software products might be up your alley. 

Still, whether you are a newcomer, or an experienced SaaS developer, having a reliable payment gateway is a must. Maxpay has a lot of experience in providing top-notch merchant services online. Manage all your transactions and accept payments the way you prefer. From fit reports to churn control and transparent billing – we’ve got everything the SaaS business needs. And with our multiple instruments for risk management, fraud protection, and chargeback prevention, your company will be secure. For more information check out Maxpay’s website, or contact us at start@maxpay.com.