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The Hidden Costs of a SaaS Platform

This entry was posted on November 08, 2018 by Brent W Peterson

 

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With over 3.2 billion people online, the world of digital commerce is rapidly growing. Sales are over $2 trillion globally, and there are no signs of slowing down. In this highly-competitive market, companies are turning to Software as a Service (SaaS) as a cost-effective option to meet customer demands. However, SaaS may not be the most affordable option. When the time comes for your website to grow or needs customization, you could face hefty costs. Since SaaS websites are hosted by software companies, the sites often have a one-size-fits-all framework, which provides little room for growth.

Customization

In the digital age, your website is the face of your company. Your brand’s design can help you stand out from the competition. Your brand isn’t just a logo you slap on your website, it is also the customer experience you create. With SaaS platforms, you might face a wall when trying to shine through. SaaS platforms provide all customers with the same standard web features. This means SaaS users don’t have the opportunity to display creative website design.

If your company utilizes SaaS, but wants the customized experience, you will have to pay for conversions. This is a cost you may not expect when first building your website. Furthermore, SaaS systems are typically built with specific retail tools. If the SaaS platform is not compatible with your company’s existing tools, you will have to pay overhaul for your business process.

To avoid these customization fees, you should look for a platform that invites both integration and creativity.

Platform Support

As your business grows, you will need support to help your website flourish. This can be in the form of small upgrades or large maintenance issues. With most SaaS platforms, you are left to your own devices. SaaS platforms are beloved by users because of the seemingly low prices they offer; however, to keep costs down, the platforms do not provide this essential support.

If you want platform support, you need to hire outside contractors. This increases your overall costs exponentially. Furthermore, most SaaS are closed or proprietary code. That means not all coders are able to help you with your website needs. To find a properly trained or experienced coder, you will likely have to pay a high price.

Long Term Growth

If your company is just starting out, a SaaS platform may seem like the easiest, most cost-effective way to get your start-up online. When deciding to partner with a SaaS, you should think of the long term ramifications of this investment. These platforms are often unable to integrate with other systems and software you will want to use as your customer base grows. Furthermore, SaaS platforms are known for having limited SKI and processing capacity, so you may not be able to grow your product catalog as expected.

When your company is ready to grow and move on from the SaaS platform, you will face high fees to build an entirely new website from scratch. If your company has a long-term plan, it is in your best interest to build a scalable website from the get-go. The starting costs will be more expensive than an SaaS program, however, over time the investment will pay off, because you will not be facing extraneous fees.

Pros & Cons

Although there are many hidden costs of a SaaS platform, the model is not entirely bad. The SaaS market is estimated to be worth around $116 billion. Due to the pricing model of SaaS platforms, your company can allocate costs to different departments or business units. This is a beneficial option in a world of decreasing budgets. Furthermore, SaaS allows you to tap into the cloud for applications. Since the hardware for the platform is not stored at your facility, this lowers your IT budget.

Although the upfront cost and cloud capability draws many companies, not all that glitters is gold. SaaS platforms have a one-size-fits-all approach, so your business is treated like everyone else’s. This means your unique needs are not met nor cared for. This can force you to change your business process to what the platform supports, even if that isn’t beneficial to your company.

Aside from functionality, there are also many security risks involved with SaaS platforms. Data security is one of the biggest issues many SaaS users face. SaaS platform operators, store all your information, including customer data, onto a cloud based server. This causes data breaches to happen at an alarming rate. Although many SaaS providers take steps to block this kind of criminal activity, hacking still happens at an all too frequent rate.

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