Let's start with the definition of SaaS. SaaS (Software as a Service) is software hosted on the cloud. It can be accessed via an internet browser, mobile application, or desktop app. If you are not familiar with the way SaaS business model works, you can read Eleken's blog to understand the topic which we are going to be discussing today a little bit better.
More than the Cloud itself, the SaaS market has been one of the real levers for the diffusion of the Cloud in companies. However, and despite its appeal, many potential customers express fears that still hold them back.
Businesses need flexible and agile software systems to compete in today's digital economy. That's why so many companies have turned to SaaS and on-demand software to benefit from adaptable, scalable and flexible technologies.
In the increasingly competitive market for SaaS applications, each provider strives to develop discriminating arguments, reassuring potential customers about the security or location of their data, for example.
According to the findings of the SaaSPath survey conducted by IDC, vendors should be more concerned with responding to concerns that arise. They are summarized in 5 points:
High costs and packages
As you might expect, cost is a major factor in evaluating SaaS service providers. Thirty-three percent of respondents cited high costs and fees as the main problem they encountered with SaaS providers. Of those who cited high costs and fees as their biggest problem with SaaS providers, 36% repatriated their applications.
Even if the costs are not high upfront, drastic or frequent price increases can also cause management hassles for SaaS buyers. Another key issue that buyers fear is price increases when buyers do not see a corresponding change in characteristics or perceived value. In fact, the value of the price paid is one of the top three factors that buyers consider when evaluating SaaS providers. By the way, if you want some examples of successful SaaS websites, check this article.
Difficulty migrating services and data
Moving away from on-premise or other traditional apps has many benefits for businesses, but if the transition is too painful, it will cause them to switch SaaS providers. Of those surveyed who cited data migration and services as their biggest problem with SaaS providers, 25% have switched providers. Migration is an issue, so vendors should focus on how to ease the transition from traditional applications to SaaS.
Loss of data or breach of data integrity
Data privacy and security are major concerns, but they become even more so when the company is considering a move to SaaS. To reassure customers, security should be a priority investment area for SaaS providers looking to differentiate themselves from the competition.
Unpredictable costs due to consumer pricing
While not as of a concern as high costs and price hikes, consumer price inflation is still a red flag for many SaaS buyers. To remain competitive, suppliers who use consumer pricing will need to focus on attributes that buyers value. They place more importance on ease of integration and user experience than any other consideration.