Posted by: Ben Rubenstein
Cloud Computing, SaaS
Cloud network image from Shutterstock
By Aaron Flanagan, AirPOS
With retail in steep decline across many sectors, companies are looking to do more and spend less, especially in the small to medium-sized business (SMB) sector. Businesses are constantly looking at ways to reduce costs and the last few years have seen a sea change in how businesses procure and manage their software.
In an attempt to cut costs, businesses aren’t replacing ageing software anymore – nothing but a false economy I say that leads to reduced efficiency and increased maintenance costs. Other companies look at buying the software outright as a way to help cash flow. But even this method doesn’t protect them as as technological advances make their software out-dated and obsolete. That’s evolution folks – and it isn’t going to stop! The good news is though that there is now a better way for customers to obtain the software their business needs to cope, survive and thrive – Welcome SaaS.
Software as a Service (SaaS) has been around as a concept for a few years now, but the full benefits of it have only recently been realised. For those of you who are somewhat unclear as to what SaaS actually is, let me explain; SaaS is a software delivery model in which applications are hosted centrally and made available to customers over the Internet. Web enabled applications and the SaaS model combine with the cloud to offer superior efficiencies and financial benefits compared to ‘on-premise’ solutions. It’s an outsourcing model that doesn’t shift people – but rather, it’s a tectonic shift in technology.
An area that has seen such a tectonic shift over the last few years is the electronic point of sale (ePOS) retail sector after decades in the virtual caves. Like everything else, ePOS is just getting on in years, and new faster, smarter things are leaving it behind. It’s also cost an absolute fortune to maintain, but that’s all changing now thanks to SaaS ePOS companies like AirPOS.
Cloud ePOS SaaS Company, AirPOS noticed emerging problems after a decade of building ecommerce stores. Notably the lack of integration between ecommerce stores on the web and existing ePOS setups in store. This meant huge problems in controlling inventory, which of course only got worse as the volume of sales rose. Add multiple stores into the mix and the problem is multiplied again. It’s curious that ePOS got left behind in the development of ecommerce but it happened. AirPOS decided to take a step backward to correct this, to give retailers a joined up platform that intelligently controls inventory and sales. To ensure that the technology at all points of sale work in tandem instead of against each other. And for added effect, they decided to do all of this in real time, for genuine visibility across all of the sales platforms.
Thanks to the rapid development of web-based applications such as AirPOS, savvy organisations are pushing aside traditional and expensive legacy applications in order to realise the rapid, tangible business benefits that SaaS applications offer. How does this affect me though I hear you say. Well, for resellers this means three things;
1.) Marginal investment – The SaaS model doesn’t require resellers to maintain an inventory, or set up servers. You can enter the SaaS market with zero capex costs.
2.) Minimal Maintenance – Packaged software typically requires a lot of menial maintenance effort involving numerous onsite visits, manual updates and a lot of upkeep. Since SaaS solutions require no on-premise setup, customers are largely self-reliant. According to Jennie Wallace, Business Development Executive at AirPOS, “Resellers stand to gain from this as unlike traditional software, SaaS allows you to resell much higher volumes of lower complex and less time consuming projects giving you more time to do what you do best – sell”
3.) Recurring Revenue – Unlike traditional software, which has big up-front costs, SaaS is subscription-based, where users pay a smaller amount on a regular basis. This means resellers get recurring revenues for as long as the customer relationship exists, rather than the one-time margin on packaged software. This is cash flow friendly, and leads to a higher aggregate revenue. Your SaaS revenue stream may start small but has massive growth potential. For example, if you sign up 1000 customers in your first year, and then 2000 in your second year, you’ll still be earning money from those initial 1000 customers in the second year. Its what we like to call ‘the cumulative effect.’
The SaaS model has flourished in recent years because of the many benefits it offers to customers and resellers alike. It’s predicted that over the next few years, SaaS will grow six times faster than traditional packaged software, reaching over £25 billion in revenues by 2014. It has repeatedly proven to be a succesful solution for businesses of all sizes – from the largest multinationals, to the smallest independents. With its growth in popularity and the buzz currently surrounding SaaS, your next customer may ask whether it’s something they should be looking at incorporating in their business. What will you say? If you want my advice, start forming your SaaS strategy now because; end customer demands for SaaS is sizeable, set up costs are minimal and profits can be substantial. Reselling SaaS just makes sense.
For questions or comments on this post, e-mail Aaron Flanagan at email@example.com.
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