SaaS Business Roundtable: Key Ideas From Top SaaS Minds
While working on our SaaS longreads (make sure to check out part 1 and part 2), we interviewed not only the delivery managers at QArea, but also the leading experts of the Software as a Service industry. These are founders, product owners, C-level executives, marketing experts, and other people whose opinions matter. These are the people we’ve talked to:
- Andy Ide, Founder & Director of HorseRecords
- Craig Aitken, Owner & Director at SmarterApps
- Jamie Irwin, Director & Search Marketing Expert at StraightUpSearch
- Benjamin Okyere, Founder at StressReliever
- Rosmy Barrios, Director at HealthReporter
- Lorien Strydom, Executive Country Manager at Financer.com
We asked them to share their ideas on a few important topics of SaaS product development. Here is what they had to say (some answers may have been edited for clarity).
1. When is the SaaS model a perfect fit for a software development business?
Andy Ide: By far, the best thing about the SaaS model and one of the reasons to choose it as a software vendor is that the updates are immediately there for customers. There are no more customers having to update apps constantly, and you can be assured everyone is running the same version of the software. There is nothing worse than different customers using every version of your app that you have ever had!
Craig Aitken: It’s a question of timing and finding the right market with a pain point that you, as a provider, can solve with your solution. We always look at the Total Addressible Market and percentage before we seriously consider any opportunity.
Jamie Irwin: The SaaS model is perfect for software development businesses that want to reduce costs, increase scalability, and create more efficient workflows. With subscription-based models, software companies can offer products at reasonable prices and provide customers with continuous updates. Customers no longer have to install and manage software on their own devices since the program can be accessed through cloud servers.
2. What are some of the advantages and drawbacks of SaaS that are not instantly obvious?
Andy Ide: The biggest advantage is that you make money while you sleep. It also covers the quiet times in December, January, and February that most businesses encounter. The drawback I’ve experienced is that some people still want to buy the product once and do not want to constantly pay for updates. There have certainly been some strange discussions!
Craig Aitken: The big one is that it’s not always a slam dunk like you expect, as the marketplace may not embrace your solution as much as you expect even if it solves several problems for them. In Australia in particular, there seems to be resistance to change in many subject matter experts.
Jamie Irwin: One of the main advantages of using SaaS is that it reduces development and maintenance costs. Since all applications are hosted on cloud servers, companies don’t have to invest in hardware or dedicate resources to updating them regularly. Additionally, this allows them to focus more on product innovation than maintenance tasks such as patching bugs and installing updates.
The one downside of using SaaS is that there can be reliability issues if something goes wrong with the server hosting your applications. A company may not always have control over its systems due to shared resources with other tenants in a multitenant environment, which could sometimes lead to performance problems.
Benjamin Okyere: One of the main advantages of SaaS is its scalability. Companies can easily add more users or increase their bandwidth as needed, allowing them to grow with their customers’ needs. With the use of cloud technology, businesses don’t need to worry about additional hardware costs and can quickly scale up or down depending on demand. Additionally, SaaS solutions often come with superior security, as the service provider can monitor their systems and quickly fix any issues.
One of the drawbacks is that businesses don’t have full control over their data and may be limited in how they can customize or tailor the software to fit their needs. Similarly, businesses that use SaaS may have challenges with compatibility, as they may not be able to use all the features and functions of the software if it is incompatible with the existing infrastructure. Finally, businesses may also face vendor lock-in, as switching providers can involve a lengthy transition period.
Rosmy Barrios: Unfortunately, there is one pitfall of SaaS that’s not always immediately obvious — vendor lock-in. As businesses transition many aspects of their operations over to a single platform and become dependent on it for success, they can find themselves in a situation where changing software vendors is difficult without significant disruption and cost. This issue becomes even more pronounced when business services are tailored around the platform due to its extensive customizability, as migrating data to an alternative platform often requires significant reworking. Therefore, when committing to a vendor, organizations considering SaaS must ensure their long-term satisfaction. Otherwise, they can risk costly problems further down the line.
Lorien Strydom: Security is one important drawback of SaaS that can be overlooked during the rush to take advantage of this technology. Without appropriate security protocols in place, all sorts of data can be exposed or fall into the wrong hands. Additionally, relying upon a software vendor to maintain secure systems and infrastructure can leave an organization vulnerable to external attacks or natural disasters that could potentially cause major disruption. As such, it is essential for any organization looking to utilize SaaS to have a strong digital security policy in place, along with robust backup and recovery procedures.
3. How to successfully develop SaaS products and how to find the right audience to sell them to?
Andy Ide: The common statement here is to get your MVP to production and then iterate like mad. Still, I once had to deliver a product beyond an MVP in the first instance, as my customers are a touch more on the conservative side when it comes to tech. So you need to know your audience. You need to solve a pain point for them — ideally, a pain point that they are just dealing with without even seeing it as a problem. You also should add some friendly subject matter experts to your circle — they can ensure that you approach things from the right angle.
Craig Aitken: Identifying markets and solutions is the tricky part. As a solution provider, the problems find us, but funding the development is often the major hurdle.
Jamie Irwin: To successfully develop SaaS products, developers must understand customer needs and address them correctly in their product design process. Knowing what features will be useful and appealing will help them develop an effective product that resonates with potential customers. As for finding the right audience for your product, research into different markets should be conducted to identify target demographics who would benefit the most from your application. Gathering feedback from existing users by conducting surveys or interviews will also be beneficial for tailoring your messaging appropriately when reaching out to potential customers. This will allow you to deliver tailored messages that appeal directly to their unique needs instead of generic marketing content, which may not reach them effectively enough.
Benjamin Okyere: The key to successful SaaS product development is to create a user-friendly and intuitive experience that solves a specific problem or helps customers reach their goals. To do this, businesses should start by understanding their target market and researching the existing solutions that are already available. They should then identify the gaps in the current offerings and develop a strategy to fill them. Once the product is ready, businesses should consider marketing their SaaS solutions to potential customers to reach out to the right target audience. Companies should leverage both digital and traditional strategies, such as social media campaigns, email outreach, content creation, targeted advertising, and more. Additionally, they should ensure that their messaging resonates with their target market by emphasizing the specific benefits of the product and how it can help customers meet their objectives. Finally, businesses should focus on building relationships with customers and providing excellent customer service to create a loyal customer base that will continue to use their services.
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4. In your opinion, which industries can benefit the most from the SaaS model?
Andy Ide: Industries where things are changing fast work best for SaaS. The ability to update your product regularly is the biggest strength of SaaS. Industries such as finance (changing laws) and agriculture (new research all the time) are the ones I would strongly consider.
Craig Aitken: Moving forward, we think there will be opportunities in “connected to hardware” SaaS models in heavy industry, mining, logistics, and manufacturing.
Jamie Irwin: I believe that the SaaS model can offer many advantages in the following four industries. One, education can benefit greatly from cloud tools that optimize rostering and easily coordinate communication between students, teachers, and parents. Two, healthcare providers, among other related services, can use advanced analytics to gather insights into patient data and automate routine tasks, allowing more time for better patient care. Three, financial services can use SaaS to deliver their products faster, more securely, and at a lower cost when compared to traditional methods. And four, retail companies can leverage cloud-based tools to increase consumer satisfaction by providing an enhanced eCommerce experience or faster product delivery.
Benjamin Okyere: The SaaS model can be especially beneficial for industries that heavily rely on digital solutions, such as financial services, healthcare, education, retail, and more. These industries require a high degree of flexibility when it comes to software, as well as the ability to quickly roll out new features or make updates with minimal disruption. Additionally, the scalability of SaaS solutions makes them ideal for businesses that are rapidly growing and need to quickly add more users or resources. Finally, cost savings associated with SaaS can benefit companies of any size, as they don’t need additional hardware or software licensing fees.
5. Is there already some next best thing that will eventually replace SaaS, or is SaaS here to stay?
Andy Ide: I think SaaS is here to stay. The steady cash flow coming in monthly is very hard for businesses to say no to. Many businesses have quiet months, and SaaS products dodge this quiet time by having the same amount of funds come in each month.
Jamie Irwin: At present, there does not appear to be anything that could replace Software-as-a-Service, as many businesses continue utilizing this technology due to its numerous benefits, such as cost savings, scalability, efficiency improvements, and agility when compared to traditional models like on-premise deployment methods or managed services offerings. Moreover, given massive investments made by corporations into cloud technologies, coupled with innovations, such as artificial intelligence further solidifying its position at the forefront of enterprise IT strategies —it appears that SaaS has established itself as a vital part of modern technology stacks across almost all industries globally long into foreseeable future. This means it is here to stay rather than just being a passing trend or a fad within the IT industry landscape.
Benjamin Okyere: At the moment, SaaS is here to stay, as it is a popular and cost-effective solution for businesses of all sizes. However, other solutions may eventually replace SaaS, such as Platform-as-a-Service (PaaS) and Infrastructure-as-a-Service (IaaS). These solutions offer greater control and customization over the software, as well as additional scalability and security. Therefore, businesses may gradually transition to these newer solutions to keep up with their customers’ needs.
Bottom line
Software as a Service is by no means an easy industry to venture into, and it has several unique challenges a SaaS business can encounter at some point. However, the advantages of running a SaaS business far outweigh the possible pitfalls, which explains why there are now so many SaaS solutions available and hundreds of new ones appear every year. As long as you have a promising SaaS business idea, are well-informed about the specifics of developing a SaaS solution, and have a reliable SaaS development team at your disposal, the journey to a successful product is going to be a smooth one.
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