Small Business SaaS: How and Why It Matters

For small Businesses, the recent rise of cloud-based software-as-a-service (SaaS) platforms has made the resources you need more available than ever before. The flexibility, cost-effectiveness, and data security that SaaS provides is a perfect fit for small to midsize companies. Today, a truly impressive number of day-to-day business tasks can be achieved with a yearly or monthly subscription to various SaaS platforms. Bookkeeping and accounting, digital marketing, communication, commerce — all of these things can be optimized, and sometimes even automated, with SaaS. For that reason, this approach to business software integration has been rapidly growing in popularity among SMBs.

Today, Small Businesses Spend More on SaaS Than Ever Before

Just a few years ago, the idea of using SaaS instead of on premise software was looked upon with skepticism by many small businesses. In many cases, they were concerned about potential security risks. But today, over 85% of small business executives report that they’re willing to invest more in SaaS over the next five years. In 2015, businesses spent a combined $8 billion on SaaS. By 2020, that number is expected to rise to $32 billion, and by 2026, experts project that companies of all sizes will spend over $55 billion.

Shifts in technology, especially the rapid development of mobile devices and the increased usage of cloud-based services, have been major drivers behind this phenomenon. Today, the SaaS model has been successfully applied to a wide variety of software, from generalized CRM platforms like Salesforce to vertical-specific applications.

What Are Small Businesses Using SaaS For?

Over the last five years, over 1400 new SaaS startups have come into existence. These cover a variety of functions. Interestingly, the biggest market sector within SaaS is marketing, which makes up 38.6% of all SaaS platforms. Business operations, CRM, data, ecommerce solution, loyalty, and management are also major divisions. Interestingly, 18% falls under the category of “other,” most of which is specific to particular industries and verticals, like healthcare or finance.

These are some of the most widely used SaaS platforms by companies of all sizes, many of which are used by small businesses.

  • Microsoft Office 365. MS Office 365, launched in 2011, is a cloud-based SaaS edition of Microsoft Office. It’s hard to imagine doing business without Microsoft Office. For many businesses, Word, Excel, and PowerPoint are indispensable day-to-day tools. It’s available in a variety of subscription plans to suit operations of different sizes, from personal to enterprise. For small businesses, the Business Essentials, Business, and Business Premium packages are the usual choices. Office 365’s business-oriented packages are biller per user, per month, making it more cost-effective than software licensing for many small companies.
  • Salesforce is a titan, holding a full 11% of the SaaS market share as of 2015. Most of the company’s revenue comes from their CRM software, which is divided into several categories: Sales Cloud, Service Cloud, Data Cloud, Marketing Cloud, Community Cloud, Analytics Cloud, App Cloud, and IT. Salesforce is currently the world’s largest small business CRM. Their Salesforce IQ CRM Starter, Lightning Professional, and Lightning Enterprise solutions are designed and priced with small businesses in mind.
  • Surprisingly, as of 2015, was still one of the most widely used cloud services for businesses. This cloud-based file storage system, founded in 2005, allows multiple people to easily collaborate on projects with file sharing.
  • G Suite (formerly Google Apps for Work). Google’s G Suite is a cloud-based, business oriented SaaS package combining the company’s most popular web apps, including Gmail, Google Docs, Google Drive, Hangouts, and Google Calendar. Their basic plan is highly affordable compared to other SaaS options, making G Suite a great choice for small businesses.
  • Concur is a travel management and expense management system. Their Concur Travel & Expense app offers web and mobile solutions for travel planning and keeping track of business expenses.
  • Amazon Web Services. This on-demand cloud computing platform offers virtual servers, web hosting, networking solutions, file storage, databases, and other features. Their two most popular services are Amazon Elastic Compute Cloud and Amazon S3.
  • Zen desk provides cloud-based customer service software, helping companies manage and address tech support inquiries without the need for on-site equipment. Customer service representatives can respond to clients through numerous phone numbers and email addresses, while customers can conveniently contact the company through the business’s own website or app.
  • This cloud-based file sync and sharing service was among the first types of SaaS platforms to gain considerable popularity.
  • Slack. Slack is a cloud communication SaaS. For many small businesses with teams who work remotely, it’s an indispensable tool. Slack integrates with a variety of other SaaS platforms like Google Drive, Trello, Dropbox, Box, and Zen desk.

This is just a small selection of the many SaaS offerings available on the market today. Almost every business administration function can be automated, optimized, or made more efficient by implementing SaaS solutions.

Why Small Businesses Need SaaS

There are a number of compelling ways that small businesses can benefit from the SaaS model, as opposed to on-premise hardware and software licensing. Implementing SaaS solutions can help companies reduce overhead, improve data security, reduce the need for dedicated IT staff, and improve employee productivity.

  • Cost-effectiveness. Compared with software licensing, which can be quite expensive, SaaS platforms have a low initial cost. The majority are billed monthly, and sometimes also per user, on a subscription basis. These subscriptions include services like customer support, upgrades, and ongoing maintenance — things that companies would need to handle on their own with software licensing.
  • Cost predictability. The monthly cost of SaaS solutions stays consistent. Support and maintenance are included, removing the potential for hardware and software failures to generated sudden, unexpected expenses. For small businesses, this predictability can be very important, as budgets may already be limited.
  • SaaS companies offer multiple packages at different price points, with different sets of features. This makes them easy to scale up or down. Small businesses can pay for the services they need, then upgrade when the company’s growth requires more functionality.
  • Software integrationMany cloud-based SaaS platforms are designed to easily integrate with one another, via APIs and web service protocols. This makes integration between SaaS platforms easier and more straightforward than integration between on-premise software. However, specialized skill and expertise may still be needed to achieve this effectively. At Pulatech, we help small and midsize businesses manage these software integration processes.
  • Time management. SaaS platforms can help small businesses better prioritize their employees’ time, as in many smaller companies, staff are already stretched between multiple job roles. Using SaaS solutions minimizes the need for software upgrades and maintenance, which would otherwise chew up time.
  • Because SaaS platforms are cloud-based, they can be accessed anywhere, from any device. This helps employees respond more quickly to work-related tasks and requests, regardless of their current location. This newfound environmental flexibility also opens up new potential for outsourcing through remote workers. Being able to access information from anywhere is also beneficial for improving customer service, letting representatives respond easily to customers in real time.
  • Data and file protection. Many SaaS options can remove the need for on-premise server hardware, whose failure could result in the loss of crucial data. Cloud-based services back up files and information, providing much-needed redundancy to protect against accidental information loss. Instead of losing an important Excel spreadsheet or an entire database because a desktop computer or a server failed, cloud services make it simple to create robust backups.
  • Try before you buy. Most SaaS platforms offer a temporary free trial, letting you judge the program’s usefulness before you start spending money on it.
  • Better access to ongoing innovation. SaaS companies can gather user data in real time by using tracking mechanisms, helping them improve and optimize their service offerings quickly and effectively. The architecture used in these programs makes updates and upgrades continually available. The old legacy software counterparts might be in use for years before the company could justify the expense of upgrading to the latest edition. With SaaS, seamless upgrades ensure that you constantly have the latest version as soon as it’s available.

At Pulatech, We Help Small Businesses Implement SaaS Solutions

At Pulatech, we help small and midsize businesses choose the right SaaS platforms for their needs, then implement these new solutions and Enterprise integration with existing software. Our enterprise integration services can help you connect all of your various software platforms using custom APIs. If you’re using SaaS, or considering making the switch to a cloud service, we can work with your company to integrate your new SaaS platforms with your existing legacy software.

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