Why Businesses Are Shifting Towards Software as a Service (Episode 1 of 2 with Justin Rondeau)

In today's episode, we’ll discuss the tectonic shift of SaaS and why businesses are shifting towards it. Many different companies have adopted SaaS because of the tremendous opportunity it provides to develop recurring revenue streams.

What is SaaS?

Software as a service (SaaS) is a way of delivering software online. Instead of installing and maintaining the software on our own computers, we simply gain access to it via the internet (Source: SalesForce).

SaaS customers usually pay a monthly subscription fee for access to the software (Source: Digital Guardian).

When we purchase software and install it onto our computer, we only own the specific version we purchased. But what happens when that software is updated? In the past, if we wanted the newest version, we would have to pay for it again and reinstall it onto our computer. However, now, when we purchase software as a service, we pay a small monthly fee to have access to the newest version of that software. When the program is updated, we get instant access to the updated version.

Adobe is one of the best examples of SaaS. We pay a small monthly fee for Photoshop (or their other software) and continue to get the updated versions, rather than buying Photoshop 4 and then, when they make a new version, have to repurchase Photoshop 5.

More than two decades ago, I was the CEO of a publicly traded SaaS company. Back then, we had to do everything ourselves from scratch. Everything involved custom coding. Now the world has changed. It's so much easier to create SaaS products than it was two decades ago. It has created a tectonic shift that many businesses are taking advantage of.

Here are some of the reasons businesses are taking advantage of SaaS: