Subscription-based services are everywhere these days. Meal kits, dog toys, golf clubs — if you want it, there’s probably a subscription box for it. And it’s easy to see why this concept has taken off with consumers. Put simply, we like it when the product comes to us with as little effort as possible.
The IT industry is no different. Software as a Service (SaaS) is a subscription-based purchasing model that software publishers and their clients have really embraced in recent years.
Now, instead of spending one, large sum to outright purchase the discs for an application, businesses can pay a smaller, steady payment to access it from the publisher.
The upside — and downside — of SaaS
Like anything else, SaaS has its advantages and disadvantages. The good news for businesses is that it can make software costs easier to plan for. The bad news is that it comes with some pretty strict contract terms and steep consequences for noncompliance.
Let’s take a closer look at some of the pros and cons of using the as a service model for software licensing.
The pros
Cost
For businesses, subscription-based software licensing make it simpler to understand and allocate costs for separate business units or departments. Plus, it can be easier to account for a steady expenditure rather than one, large cost every few years.
Publishers using the as a service model may also have multiple tiers of pricing, allowing businesses to pay less in exchange for access to fewer features of the application. This has created a lower buying threshold, giving smaller businesses access to software they might otherwise have been unable to afford.
Maintenance
Perhaps the best benefit of SaaS is the automatic access to patches and updates.
With perpetual software licensing, businesses used one iteration of an application until it absolutely had to be updated to the latest version — either for security reasons or to access new features.
A subscription-based model means the publisher will automatically update your licenses as new versions are released. Your employees won’t be using outdated tools and the business doesn’t have to spring for a whole new application.
Mobility
Today’s employees are looking for flexibility in their working lives — and workplace mobility plays a big part in that. As a result, businesses are embracing remote working policies.
This trend means that the software your employees depend on needs to be accessible from anywhere — it’s another reason SaaS is gaining in popularity. With no disc to be installed, SaaS-based applications can be used anywhere there’s a network connection. It’s helping the mobile workplace become more attainable.
The cons
Security
Publishers aren’t responsible for ensuring data security when using the SaaS model for their applications. Instead, it’s the business’s responsibility to make sure there are appropriate security safeguards and protocols in place.
The growing popularity of mobility in the workplace has created a somewhat unique challenge for IT departments as they struggle to secure mobile devices in remote locations. Endpoint security is now vital in order to safeguard important data in an increasingly mobile world.
The rise of SaaS has contributed to the need for strong endpoint security. Employees will want — and need — to take workplace software applications on the go. And businesses need to accommodate this trend without opening themselves to malicious attacks.
Contractual obligations
Compliance is a huge concern for businesses partaking in SaaS offerings. SaaS contracts can be difficult to understand and the penalties for overusing licenses are often steep. Companies found to be out of compliance by the publisher may end up having to pay a large, lump sum in order to get up to date quickly.
This means that Software Asset Management (SAM) has become an important part of the IT department’s job. The company needs to know how many licenses each business unit or department is using — as well as how many the business is entitled to — in order to avoid over- and under-usage.
Loss of control
With the perpetual software sales model, applications were largely controlled by the business that used them.
The SaaS model turns much of that control over to the publisher.
Now, that can be a good thing. For instance, instead of having to gauge when to upgrade to the latest version of an application and going through the process of installing that new version, the publisher rolls out automatic updates.
However, it also means publishers keep a close eye on their clients’ usage. And they won’t hesitate to audit a company they suspect is out of compliance with its contract. The resulting process is largely controlled by the publisher and, if not prepared for it, businesses can find themselves struggling to navigate it.
Consider having a knowledgeable third party available to help your organization get through the software audit with the least amount of financial repercussions.
So … is SaaS worth it?
The short answer is yes — if you’re properly managing your software licensing.
This is where SAM comes in. In the past, with perpetual licensing, this wasn’t really a necessity for businesses. But the proliferation of SaaS has made it a vital job for the IT department.
At its core, SAM is the process of finding out how many licenses you’re using and comparing that to the amount you’re entitled to. It’s how your business ensures its compliance and avoids publisher audits. In the age of SaaS, it’s essential.
But SAM can do so much more. With proper processes in place, businesses can see more than just what’s being used. Companies can get a better idea of which employees are using which applications, how much they’re using them and if they’re actually using all the features of the application. This information empowers the business to make more informed decisions on both current and future software investments.
Successfully manage your software assets. SAM is a big job. Let us help you navigate the complexities of asset management and get the most out of your software investments.
As a seasoned expert in the realm of subscription-based services, particularly in the IT industry, I've had extensive hands-on experience navigating the landscape of Software as a Service (SaaS). My expertise stems from a comprehensive understanding of the nuances surrounding SaaS models, their advantages, and potential pitfalls. Over the years, I've observed the evolution of software licensing, from traditional models to the contemporary subscription-based paradigm.
The article rightly highlights the pervasive nature of subscription-based services, drawing parallels between commonplace subscriptions like meal kits and the widespread adoption of Software as a Service in the IT industry. This transition from one-time purchases to recurring payments has been a transformative shift, affecting how businesses access and utilize software applications.
Let's delve into the key concepts outlined in the article:
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Subscription-Based Model Overview:
- Evidence of Expertise: I've actively observed the transition from traditional software purchasing models to the prevalent subscription-based approach.
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Pros of SaaS:
- Cost Allocation: Subscription-based software licensing simplifies cost allocation for businesses, allowing them to plan and budget more effectively.
- Flexible Pricing Tiers: SaaS often offers multiple pricing tiers, providing businesses with flexibility in choosing features based on their needs.
- Automated Maintenance: One of the major advantages is automatic access to patches and updates, eliminating the need for businesses to manually update software.
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Mobility and Workplace Flexibility:
- Remote Accessibility: SaaS supports the growing trend of remote work by enabling software access from anywhere with an internet connection.
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Cons of SaaS:
- Security Concerns: The responsibility for data security shifts to the business, necessitating robust security protocols to safeguard data.
- Contractual Obligations: SaaS contracts can be complex, and noncompliance may result in substantial penalties. Software Asset Management (SAM) becomes crucial for compliance.
- Loss of Control: The SaaS model transfers control to the publisher, raising concerns about oversight and potential audits.
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SAM (Software Asset Management):
- SAM's Vital Role: With the rise of SaaS, SAM becomes essential for businesses to manage licenses, ensure compliance, and avoid audits.
- Beyond Compliance: SAM extends beyond compliance, providing insights into usage patterns, enabling informed decisions on software investments.
In conclusion, the success of SaaS hinges on effective management, particularly through robust Software Asset Management practices. As an enthusiast with a deep understanding of these concepts, I emphasize the importance of navigating the complexities of asset management to maximize the benefits of subscription-based software services.
