SaaS Subscription Software: How to Make the Right Choices

Before coming up with the right choices to make while going for SaaS. Let us first explore what SaaS really is?

SaaS- SaaS is known as software as a service model. This model is governed and hosted by a third party. All the hardware and software maintenance is done by the same third party. When it comes to experience a SaaS subscription software, it’s just the services that a particular business has to apply for and that’s pretty much all. Under SaaS, the businesses do not have to pay for the whole software but only for the services, they like to opt and continue with.

Now let’s observe some of the reasons why choose SaaS subscription management software

1. Low Barrier to Entry:

SaaS subscription software as a Service model enables you to “rent” an application as you use it removing the high hardware and software acquisition costs that are part of the self-hosted software model. In addition, since the application’s software and hardware are maintained and updated by a third party, the need for IT personnel is minimized or removed completely.

Flexible Payment Entries/Plans:

Different licensing models geared toward every business model and size give you better budget planning options. The pay-as-you-go model that is intrinsic to most SaaS products allows you to keep your operational expenses in proportion with your business’ positive or negative growth.

2. Scalability:

SaaS being cloud applications by nature are easily scaled up or down with minimal costs. When your business grows you don’t have to worry much about expensive acquisitions of hardware and the skills to implement it. This feature also works the other way around. At times when there is low usage then your business shrinks due to a general recession in the market or just a seasonal tide, you would not have to worry about the hardware residing in your server room which is of no worth.

3. Mitigate Before Making a Final Selection Call

It’s pretty much easy to get thrilled by the glitzy functionalities and persuasive cost cuttings through a SaaS subscription software and start possessing about getting the new, state of the art technology. However, state of the art technology is often associated with the newest and least professional performers in the SaaS market. Although the functionality might appear to be compelling, all other areas like support, disaster recovery, and ultimately corporate funding may be lacking. So it’s always advised to go through the trial period no matter how well-spoken the technology appears Temper excitement around features and functions with an honest assessment of the company’s maturity and ability to support your organization in the long run. In some areas, an upstart may provide such compelling advantages that the risks are worthwhile. Ultimately, you must understand the risks and rewards, and plan to mitigate the former. Furthermore, there are various kinds of SaaS subscription software plans are available in the market which is given below

• Term Basis SaaS Subscription Model

In this term basis SaaS subscription model, the customer performs an electronic or a paper contract agreeing to a particular subscription for a period of time. The subscription agreement may or may not include provisions for the cancellation during the term. Cancellation provisions in a term agreement typically include pre-defined retrieval charges or penalties.

With term SaaS subscription software model, payment terms are flexible, including monthly, quarterly, yearly or an agreed-to schedule or invoicing and payment terms. Again, how the customer pays and the frequency do not define the nature of the subscription in such types of agreements. Furthermore, Freemium is often described as a model. Freemium as actually a sales and marketing strategy that can only be employed in either the monthly or term subscription models.

• Monthly SaaS Subscription Model

In the Monthly SaaS subscription software model, the customer is charged and pays each month, frequently through the option of credit card i.e. automatic e-payments. While there is typically an electronic license agreement, there is no term involved or the term is simply a month. Typically, the customer can cancel at any time without the penalty or fee hassle. While at times, some monthly subscription businesses do offer quarterly and annual payments.

The frequency, payment modules and payment terms in themselves do not change the nature of the customer and vendor obligations if the model is a true monthly subscription. Under a monthly subscription model, an annual prepayment would typically be refunded if the customer cancels prior to the end of the period for which he paid prior/prepaid. Monthly subscription models may include fixed or variable fees, or both as a combination.