SaaS, or Software as a Service, is a software distribution model in which applications hosted on a cloud are made available to users over the internet at a subscription cost. Software as a Service enables small businesses, large corporations and hotels to scale their operations with a low barrier to entry. It’s now the default method of deployment for business technology around the globe.
Today, more and more companies are relying on this subscription-based service for their software needs, with the numbers expected to grow in the next five years. In this guide, you’ll find a detailed exploration of Software as a Service, its benefits, and the factors to consider when choosing a SaaS application. Read on and discover why more and more companies are converting to this model.
What is SaaS?
Software as a Service is a software model where software or applications are accessed over the internet rather than being purchased and installed on a computer. These applications can include a range of business apps, communication systems, everyday software like Microsoft Office (which has now also converted to this model), and hospitality software.
This model is also applied to popular property management systems like Mews. Mews’ hospitality cloud software allows you to centralize all your reservations in one place from anywhere, thanks to being hosted on the cloud, while boosting efficiency and growing revenue.
Software as a Service products are acquired on a subscription-basis from a third-party provider. This has made the process of acquiring software easier, faster, and more cost-effective. Instead of spending lump sum amounts to purchase an application, Software as a Service allows you to access the same application online through smaller monthly payments. Learn about other technology trends that are improving the future of the hospitality sector.
What are the benefits of using Software as a Service?
Software as a Service presents plenty of benefits. Let’s take a look at what they are.
Lower costs
Software as a Service is best known for its lower costs. The model is subscription-based and has no upfront charges. Being a pay-as-you-go method of software delivery, customers can choose a Software as a Service product that best suits their budget, as well as cancel or terminate a subscription at any time, reducing all the necessary recurring costs.
Maintenance and updates
The third-party provider issuing a Software as a Service product is responsible for managing and maintaining the digital infrastructure of an application. This means that you can access the necessary updates, including security updates, which is especially important for the hospitality sector as it works with a lot of sensitive data.
Custom development
Generally, Software as a Service serves multiple users, and can be designed in a way that can be customised to fit the needs of various businesses and users. This is particularly useful in the hospitality industry where many users will need to be able to access the information from the PMS on different devices, updating in real time. With Mews software, for example, you can even choose a customized package that works with volume based pricing and discounts for a yearly subscription price.
Scalability
Providers of Software as a Service products offer a wide range of subscription options that allow an organization to scale up or down. For example, if your hotel grows in size, Software as a Service enables such an organization to scale up to the next subscription level, in the case of Mews PMS, you could move up to the Enterprise level, which unlocks new functionalities.
What are the disadvantages of SaaS?
All products have some disadvantages, so let’s find out what they are for SaaS.
Security concerns
Adopting the Software as a Service model means that you will be entrusting sensitive information and business data to a third party service provider. This can be a problem because it poses a potential risk for hacker attacks and data leaks. Learn more about different security breaches and how to avoid them for your hotel.
Over-reliance on the internet
As Software as a Service applications are accessible over the internet, having poor internet connection would limit how effectively you can use such applications. Therefore, this makes it so the operational success of your business is significantly dependent on good internet connectivity.
This over-reliance can be detrimental to your business should you have a power outage or the internet goes down. In the case of hotels, your ability to access reservations may be compromised – although you would be able to access the platform via your phone if the carrier signal is still available.
Lack of control
The fact that Software as a Service applications are managed and maintained by a third-party means that you have no control over your software. In this case, if the service provider decides to discontinue service, users can risk losing the data shared with the provider.
What should you consider when choosing SaaS software?
When buying Software as a Service, it’s critical to identify the factors that you should consider before subscribing to a Software as a Service product.
1. Features
The Software as a Service product you choose should be able to solve the problems faced by your business. If a product does not come with the features you need to solve your business problems, then you might want to consider a better option. Some of the key features of an ideal Software as a Service include subscription-based billing, data security, integrations, and more.
2. Security
Today, small businesses and companies are increasingly exposed to cybercrime and data breaches. When choosing a Software as a Service, therefore, you must evaluate the security of the service provider and the product itself.
3. Permanence
Since Software as a Service is subscription-based, it’s important to have an agreement on what happens should you no longer be interested in a product. For example, consider how you can terminate the subscription? Can you leave at any time? Is the subscription term fixed or flexible? Will you be able to access the information stored on the cloud?
4. Service Level Agreement
You also want to consider the Service Level Agreement, which includes a detailed description of the level of service and price scale offered by the Software as a Service provider. The agreement is also made up of a detailed description of the services provided, reporting methods, support system, availability and maintenance time.
Conclusion
SaaS presents incredible business opportunities, especially for modern-day hoteliers. You can streamline operations and the booking process, and have access to your booking information from anywhere, even if you’re not in front of your computer. Furthermore, you can access software more easily, quicker and at a lower rate.
As we mentioned in this guide, subscription-based service of software delivery comes with a wide range of benefits, including scalability, cost-effectiveness, customization, and automated updates.
On the other hand, some businesses nonetheless remain sceptical due to possible security threats, lack of control, and over-reliance on the internet. Nonetheless, the benefits far outweigh the disadvantages, and SaaS is without a doubt revolutionizing the way hotels do business.
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