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Software as a Service: the business case for ISVs 

Your customers would prefer purchasing SaaS applications, but a journey to the cloud will mean additional investments and responsibilities. There are several paths that lead to the cloud. How do you stay profitable? And what are the benefits of a public cloud platform such as Amazon Web Services (AWS)? 

Our client Playara makes music from A-list artists worldwide readily available to streamers and video content creators on platforms like Twitch and YouTube. In early 2020, this start-up was all vision and no IT growth plan. The single-server platform was hastily cobbled together and not at all suitable for the international presence they had in mind. To reach content creators around the globe, they needed a cloud platform that would enable them to scale up quickly in case of sudden or unexpected growth.  

Financial benefits of SaaS 

Like Playara, there are many Independent Software Vendors (ISVs) that decide to make the journey to the cloud. Customers expect flexible and transparent pricing based on the number of users and functionality, and Software as a Service (SaaS) can deliver that.  

In addition to your customers’ wishes, SaaSification offers you a string of financial benefits: 

  1. All customers run on the latest version of your software, with no effort required to convince them to upgrade. Bug fixes and adaptations to retain legal conformity only need to be applied to the latest version. 
  1. 100% of the TCO goes through you. If you lower the TCO, you can either pass on the benefit to your customers or increase your margin. In addition, your revenues will be predictable. 
  1. Better match between supply and demand, due to proper hardware sizing. Pay for only what you need, and offer superior performance to your customers. 

In other words, SaaS is the way to go if you want to stay relevant. The next question is which route you take. 

These are the benefits of the public cloud 

Put plainly, you can choose between the private and the public cloud. In the first case, you use your own cloud services on your own servers. Only your organization can access and manage this cloud. On the other hand, public cloud services can be used by anyone: a cloud provider makes computing power, storage and other resources available online, and the customer pays for them. 

ISVs are often in a growth phase and most times, their IT department is busy enough as it is. The public cloud has advantages that fit well with this situation, because of its scalability and the low costs of IT management. 

Amazon Web Services: the benefits 

ISVs looking for even more benefits to the public cloud can delve into Platform as a Service (PaaS), where customers can develop, run and manage their applications on a readily available public cloud platform. No need for the complexity of building and maintaining the infrastructure; it is all part of the service! 

Basically, PaaS services are like building blocks: components that you can easily assemble into a suitable whole that provides great flexibility and allows you to allocate costs properly. These services offer numerous advantages: no installation and maintenance are required, and they have a very strong Service Level Agreement (SLA). In terms of compliance and security, you follow industry best practices. With PaaS services, you prevent legacy software from constantly demanding attention and getting in the way of transformation. 

Amazon Web Services (AWS) is one of the most reliable forms of PaaS. What makes Amazon’s cloud so robust? Based on the principle that “everything always breaks,” data centers are grouped into Availability Zones (AZs), which are in turn grouped into regions. An AZ typically consists of a distinct number of closely spaced physical data centers, but behaves like a single data center. By using more than one location, AZ hierarchy maximizes availability and minimizes the impact of outages. 

The benefits are crystal clear: you use scalable and state-of-the-art technology at a good price, use the most modern security, and are compliant with regulations such as the GDPR. 

SaaSification for ISVs: the infographic 

Your customers would prefer purchasing SaaS applications, but a journey to the cloud will mean additional investments and responsibilities. They are worried that staying profitable might be a challenge. “What should I charge my customers?”, some clients have asked us. 

In order to help you calculate your new pricing strategy, we have designed an infographic detailing the different line items your customers already pay for their on-premises software, the benefits of moving to the cloud, and more! So, do you want to know all the ins and outs about SaaSification and the associated profitability? Download our infographic here. 

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