It seems that nowadays, any job within the tech industry seems to require some sort of SaaS experience. If you’ve ever asked yourself questions like, “What is a SaaS company?” “What is SaaS software?” or even questioning the meaning of SaaS, keep reading.
We’re going to answer all the burning questions you have related to SaaS, so you know everything there is to know by the end of this article.
Table of Contents
What Is a SaaS Company?
By definition, a SaaS company is a business or organization that utilizes software to provide customers with a service. In short, it’s a “software as a service” company.
SaaS businesses have an incredible amount of scalability because there is no need to increase the cost of delivering their product. This is because the software they provide their clients as a service is one that they create, develop, and update themselves.
This business model allows companies to have nearly complete control over their product. Generally, companies offer their SaaS software as a monthly subscription.
That’s pretty much the gist of it. Now anytime someone asks you, “What is SaaS?” you’ll be able to answer them confidently.
The Three Phases of SaaS
A SaaS company is built upon three phases.
First, you have the setup. This is when the founders of a company find their market gap, create their plans for their product as well any marketing or strategy plans.
The second phase a SaaS company must go through is growth. This occurs after their product hits the market. If their strategy and marketing plans were successful, it’s also when they experience a period of rapid growth.
The business should see a sudden spike in demand, creating the need to expand their marketing, sales, and even customer service teams. A SaaS business’s setup or growth phase could benefit from having a SaaS SEO Consultant on board as a part of their marketing strategy.
The final phase a SaaS company partakes in is stabilization. At this point, the company can obtain new customers without taking on additional overhead costs.
This is due to reinvesting in their tools during the growth phase. It allows the companies to handle the demand and look for an eventual exit strategy.
Examples of SaaS Companies
In the past, companies had to use a wide variety of software to conduct their business. With technology advancing seemingly daily, IT responsibilities become more pronounced, and costs seem to be constantly climbing higher. SaaS companies provide a solution to their high-cost approach.
Using SaaS products, a company can reduce its overall costs and its IT responsibilities. A huge SaaS market for any size business is customer resource management (CRM).
A couple of the more prominent names in the industry are Salesforce and Hubspot. A few other applications of SaaS software is for data management, web hosting, and even project management.
Going Forward
The next time you see or hear SaaS mentioned anywhere, you will be able to confidently answer the question, “What is a SaaS company?” You’ll be able to tell them precisely what it is, the phases a SaaS business goes through, as well as a few examples of industries they provided a solution for.
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