What is a Saas Business?
There are many ways to start a lucrative business in 2022, one of which, with a market growth rate of 30% per year, is providing Software-as-a-Service (SaaS). You may have heard about it as a powerful business option, but what exactly is SaaS?
Software-as-a-Service is a cloud-based software delivery model that allows users to access applications through a remotely hosted central server. Unlike traditional software, SaaS follows a subscription model, meaning users pay for continued use of an application, essentially renting the software. SaaS gives businesses greater freedom in pricing, making applications available to more users.
If you’re looking to start a business, you should consider SaaS. This article explores Software-as-a-Service as a profitable business model and aims to provide you with some excellent ideas to get started. At Idea Maker, we provide high-quality SaaS development solutions, so if you find an idea you like, you can quickly get development underway.
What is Micro-SaaS?
One common type of SaaS you should be aware of is micro-SaaS. This model is a subcategory of SaaS that focuses on developing applications for a niché market with very focused functionality. They are typically maintained by a small team or individual, though there are some exceptions.
For example, the social media management SaaS, Buffer, began its life as a micro-SaaS. Initially, the platform’s only major function was scheduling social media posts. This provided a high-quality solution to a niché requirement, making it a success and leading to greater development of the platform.
Saas Pricing Structure
As previously alluded to, its pricing structure sets SaaS apart from traditional software. SaaS offers subscription-based pricing to users; however, there are several pricing structures to choose from. Three of the most common structures are flat-rate, usage-based, and tiered pricing.
As you may have guessed, a flat-rate pricing structure uses one fixed price for the entire software. This means all users have access to the same version, with no options to add more features at an increased rate. The simplicity of the flat-rate model is excellent for marketing, as it means you can easily communicate what users are buying.
Flat-rate does, however, come with several glaring drawbacks. For example, if the subscription cost is high, many users may be unable to afford the service. Alternatively, some users may feel their needs are not being met without options for additional functionality and that the price point offers bad value for money.
With a usage-based pricing model, users pay for what they use. Usage is determined in several ways, and fees or commissions are taken accordingly. For example, PayPal charges a fee when transactions are made using their service.
The usage-based model can be great for a business with a limited need for a service, small or large. It’s often seen as the fairest way to charge users but can be challenging to account for in budgets. This is because usage may fluctuate month to month, resulting in vastly different costs.
The tier-based pricing structure for SaaS applications offers users multiple subscription plans at different prices with differing features. Some services allow users to use a limited version of their software for free. As a result, users can better know whether the software suits their needs.
Typically, businesses using this structure allow users to increase functionality by purchasing more expensive plans. The major drawback to this is that users may not clearly understand what they are getting with each plan. This can lead to unhappy customers expecting more than on offer.
Benefits of a SaaS Business
Now that you understand the basics of the Software-as-a-Service model, it’s worth noting how it can benefit users over on-premise solutions. That way, when developing your own SaaS, you will know how to provide an excellent user experience.
Due to the pricing structures of SaaS applications, they are an affordable option for users, often more so than on-premise software. Businesses and users can save money as there are no significant initial investments, such as hardware costs. For example, certain desktop applications require devices to have particular specifications, and if systems are not already compatible, upgrades may be needed.
SaaS applications can be used within web browsers, which can run on almost any device regardless of operating system and hardware compatibility. This also means Software-as-a-Service can be accessed remotely from mobile devices, allowing users to manage their workload better and stay connected. As discussed in Idea Maker’s guide, remote working can help businesses in several ways.
What’s more, due to the web-based nature of SaaS, updates are non-invasive and have a minimal impact on business operations. SaaS means users and businesses do not need to actively install updates when they become available, as the applications vendor will do so remotely.
Examples of SaaS Startups and Businesses
After understanding how SaaS benefits the consumer, it’s time to look at it from a business perspective. Take these as the standard of SaaS businesses. This will help you to learn what makes a successful SaaS business.
Canva is a social media marketing tool that allows users to design content collaboratively. It gives users access to a library of over 100 million stock images and a powerful drag-and-drop design UI.
The platform uses a tiered pricing structure, ranging from a basic free version to a fully-featured enterprise edition. With 15 million users, Canva has become an industry-standard CMS for digital marketing, reaching a revenue of $291m in 2019.
Teachable is an excellent example of how the SaaS business model lends itself to online learning. It helps users build an e-learning platform around their expertise through several interesting features. This includes graded quizzes, student management, and online lectures.
Using a combination of the tiered and usage-based pricing structures, Teachable charges a 5-10% transaction fee depending on which tier users are subscribed to. It has over 100,000 users and has sold over $1 billion worth of courses. The platform has found a smart way to integrate a combined pricing structure with useful features, creating good value for money.
Advance CPE is a unique elearning platform similar to Teachable. However, Advanced CPE offers both creative and business courses to accountancy educators. For example IRS course registration and wider administration. As a result, instructors can offer classes that satisfy education requirements for licensed accountants.
8 Excellent SaaS Business Ideas
The following list of SaaS software examples includes both micro SaaS business ideas and B2B SaaS business ideas.
1. First-Rate CRM
Customer Relationship Management (CRM) systems are essential for businesses to manage and nurture customer relationships. They give businesses a way to track sales, identify gaps in the sales process, and up-sell products to customers. CRM systems typically allow these tasks to be automated, streamlining the customer-facing process.
CRM systems are an excellent fit for the SaaS model because of the varying nature of customer bases. Some company’s, for example, will only need access to analytics and reporting or customer retention services. Delivering CRM as SaaS means you can give businesses greater flexibility in what services they pay for and use.
2. Location Services
Location Services Overview
GPS tracking and location services are best utilized on the go. Thanks to the accessibility of SaaS, and its ability to work within web browsers, you can access the mobile market. Location services offer a broad range of prospects, from public transport tracking to connecting professional services with clients, much like Idea Maker’s Pink Avenue.
Why Location Services?
Location tracking makes for great SaaS applications as integrating pre-existing online services, such as Google Maps, is relatively simple. What’s more, because SaaS is updated remotely, it means new points of interest and location data can be pushed to users without requiring user updates. Resultantly, SaaS location services make for a smooth, on-the-go user experience.
3. Database Management
Database Management Overview
SaaS database management is known as DBaaS, Database-as-as-Service. It can be a very lucrative business idea, as most companies require a database management system of some sort. They operate as a cloud-based database system that allows users and businesses to access their data remotely.
Why Database Management?
Database management systems lend themselves to the SaaS model as a result of its cloud-based nature. Cloud-based DBaaS applications are easily integrated with other enterprise software and provide on-the-go access. This means users are never short of data when needed.
4. Online Learning
As with Teachable, e-learning ventures are an excellent way to capitalize upon the SaaS model. 49% of students say they have taken an online course in the last year, and with the uncertainty of COVID-19, the e-learning industry is likely to continue growing.
The pricing structure of SaaS works perfectly with e-learning. For example, you could employ the tiered pricing model, allowing students to unlock more content for upgraded plans. What’s more, being an online service means video streaming for lecturers and course content can be seamlessly integrated.
5. Financial Planning
Financial Planning Overview
Financial planning software is used to help businesses achieve their strategic goals and afford day-to-day operations. Similar to DBaaS applications, SaaS gives finance software the ability to integrate with cloud-based software directly. Combined with the accessibility SaaS provides, you can develop powerful financial planning software.
Why Financial Planning?
One such example of a SaaS financial planning application is Advice Resort by Idea Maker. Advice Resort is a Finance-as-a-Service (FaaS) online software that helps users provide clients with financial plans. The software uses the fixed-price subscription model aimed at enterprise-level users.
6. Social Media Marketing Automation
Marketing Automation Overview
Every business, no matter the size, must employ a marketing strategy. With 3.6 billion users worldwide, social media has become an essential marketing tool. Social media marketing comes with many benefits, one of which is automation, a feature that can be turned into a SaaS business.
Why Marketing Automation?
SaaS lends itself well to social media automation due to the ease of cross-platform integration. There are several already existing automatic social media posting platforms such as Loomly that have proven successful. However, many areas of automation could be developed into a SaaS business, such as automatic metadata generation.
7. Communication Systems
With the age of remote work in full swing thanks to COVID-19, 1 in 4 Americans now work from home. Excellent communication between employees working remotely is crucial for operations to be carried out correctly. The past year has clarified the importance of SaaS remote working software, such as Google Hangout, that works across all platforms with ease.
Developing on the model of pre-existing communication software such as Microsoft Team’s could prove fruitful. For instance, many areas are yet to be fully explored in SaaS communication systems, such as video rendering. Creating software that efficiently renders and downloads video meetings in real-time is a highly desirable piece of tech.
8. KPI Tracker
KPI Tracker Overview
Hitting targets is especially important for small businesses looking to grow their operations. Small businesses can reach their goals by tracking key performance indicators (KPIs). Offering businesses a way to monitor KPIs could be a lucrative SaaS B2B business idea.
Why KPI Trackers?
The pricing structure of SaaS works exceptionally well with KPI tracking software. Some clients may require detailed reports and predictions, while others may simply want a way to monitor employee performance. Using the SaaS model, you could charge businesses different fees for varying levels of features, allowing your software to tailor to all.
SaaS Development with Idea Maker
There are many directions you could take a SaaS business. You may wish to focus on micro SaaS solutions, B2B solutions, or something completely different. Whatever you choose, Idea Maker is here to help.
If you like the sound of the ideas featured in this article, you may be considering starting your own Software-as-a-Service business. To do so, you’ll first need to find a first-rate SaaS application developer.
At Idea Maker, we have a team of expert developers dedicated to providing you with software that suits your needs. Schedule a free consultation today if you’d like us to help develop a SaaS application for your business.