SaaS Business Model PPT - PowerPoint PPT Presentation

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SaaS Business Model PPT

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Title: SaaS Business Model PPT


1
SaaS Business Model and Its Stages
2
What is SaaS?
  • SaaS (software as a service) is a delivery model
    in which customers subscribe to centrally hosted
    software. A software-as-a-service (SaaS) company
    leases its software through a centralized,
    cloud-based system.
  • A SaaS company is responsible for the servers,
    databases, and other software that enable its
    product to be accessed and used. Customers
    subscription plans can differ significantly
    between companies and some SaaS business models
    offer multiple applications with different
    subscriptions and provide access to different
    services.

3
What is the SaaS model?
  • The SaaS model is based on the software which is
    used to be hosted on cloud infrastructure, and
    businesses pay a monthly fee to gain access to
    this software. To truly make a SaaS product
    worthwhile, a good amount of coding knowledge
    combined with a good amount of user interface
    design skills is often required.
  • A SaaS company offers different types of
    subscriptions for different products or
    end-users, but the subscription model is critical
    to the businesss foundation. Because SaaS
    companies are hosted on a centrally located
    cloud, they are in a unique position to
    constantly update software and push it to users.
  • This update and growth process for SaaS products
    or SaaS software is much faster than for in-house
    hardware, which previously required very manual
    processes for the end-user. The subscription
    model, combined with the frequent updates that
    are typical of SaaS products, results in higher
    customer retention than other business models.

4
  • SaaS business Highly successful SaaS businesses
    can have valuations in the millions of dollars
    that serve a large number of customers and
    completely transform the way entire industries
    think about aspects of their business. In
    general, a SaaS business can be divided into
    three stages.
  • Initial or Early Stages In the early stages,
    your staff will be small, you will most likely
    have only one product to focus on, and you may
    not have yet begun to turn a profit.
  • At the initial stage, many firms dont have many
    customers, and their products will still be in
    their early stages of development. Most firms
    might be looking for the first round of pre-seed
    funding or bootstrapping routes to keep more
    control over their business.

5
  • Growth Stages Things start to get exciting
    during the growth stage when companies create
    something that is rapidly expanding their
    products and starting to generate MRR.
  • First firms need to expand their team by funding
    and investing in product development and
    iteration and scale of their business to begin
    and maintain their growth stage.
  • Venture capitalists and angel investors arent
    the only options for expanding the businesses.
    Some startups go through incubators in their
    early stages, and some established SaaS startups
    find startup accelerators to meet their funding
    needs. Some companies continue to bootstrap for
    much longer periods, while others are so adept at
    generating revenue from the start that they dont
    require external funding until much later.

6
  • Mature Stage A mature company has a well-defined
    target audience to which it caters and a
    dependable product to which it makes updates.
    When a company is generating good MRR, all of the
    other key KPIs are stable. Mature-stage companies
    may still seek and receive investment, but it
    will be of a much larger scale, with the goal of
    breaking into new markets or buying out
    competitors.

7
What is the SaaS business model?
  • The SaaS business model work on different
    factors, such as

8
  • MRR/Recurring Payment Clients do not purchase
    hardware when using SaaS. Because the
    software-as-a-service business and pricing model
    entails providing a subscription service to use
    the app, you will have to worry about paying the
    yearly or monthly subscription rather than just
    once.
  • Monthly recurring revenue, abbreviated as MRR, is
    a type of recurring payment. Because SaaS
    companies provide a service rather than a
    product, properly accounting for revenue can be
    difficult. You may receive some cash upfront when
    your customer signs the contract and subscribes,
    but that cash cannot be counted as revenue until
    it has been earned.

9
  • Increased Customer Retention Customer retention
    is most important to all businesses as the
    retention of paying customers is the only thing
    that keeps the firm afloat. A firm cant claim
    the clients subscription money until theyve
    completed a full term of service unless customers
    sign up for the subscription and they leave after
    in short term, which affects recurring revenue.
    As a result, the SaaS business model places a
    high value on customer relationships and
    upselling.

10
  • Frequent Upgrades SaaS consistently provides
    quick and more frequent upgrades to its services
    in order to keep end-users happy and have a
    higher customer lifetime value. Software flaws
    can expose customer information to hackers, so
    constantly assessing the state of security fixes
    is a top priority in the SaaS model. Hosting
    their products also allows SaaS companies to
    release new features and new product
    enhancements. By combining this with good
    customer communication, SaaS companies can be
    highly responsive to their customer bases needs
    and feedback.
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