In the Land of Software as a Service, Service is King

Adoption of Software-as-a-Service (SaaS) is growing exponentially in almost every industry. Instead of having to buy, build and maintain costly technology infrastructure, SaaS allows companies with small IT budgets to run modern, sophisticated applications on a pay-as-you-go basis, with only a minimal up-front investment. Businesses have the ability to quickly scale using the latest technology allowing them to remain competitive in a continuously changing economy. However with continuous changes both within the technology industry and the economy, consumer expectations are also at an all-time high. Consumers expect instant results without compromising on quality.

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For vendors operating in a software-as-a-service environment, service, and the quality of service is key as happy customers drive the SaaS business model ROI. End-user engagement and value are critically important, as the recurring revenue model drives the shift of profitability from upfront to the entire length of the customer lifecycle.

With traditional licensed software, customers had to invest in a physical copy of the vendor’s software. The value was associated with the intellectual property right of the software and was monetized using copyrights (along with maintenance and update costs), the more licensed copies you had the more you had to pay. However the SaaS business model is based on customer subscriptions, so for SaaS vendors’, volume is measured by the number of customer subscriptions and value is measured by recurring revenue. Each new SaaS customer brings a new thread of recurring revenue, so in the interest of SaaS vendors’ service has to be king.

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Gone are the days where vendors closed major deals for on-premise solutions that required annual service contracts for support and updates – at an additional cost. With SaaS, vendors need to deliver measurable benefits and ensure customers recognize value over time.  Therefore with SaaS, businesses are no longer locked into long-term contracts, obligations are less for the client and the service delivery requirements for the provider are higher. Unlike legacy systems, with SaaS, not only is support included within the regular consumption costs but also maintenance, updates and patches are included. With SaaS you can always be assured that you have the most up-to-date version, the latest features and recent security patches—with no effort required on your end.

When it comes to issues, your SaaS vendor can see what customers are doing and how they are interacting with the software, meaning they have the ability to be proactive about resolving problems as they arise. SaaS customer support essentially functions as an extension of the your IT department – no more making calls to customer support, within “business hours”, waiting on hold, to be told to reboot the system or wait for a fix on your legacy system.

SaaS by its very nature is customer service model orientated as their business relies on their customers and the success of their customers. In the land of Software as a Service, Service is King.


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