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Software as a Service – Nothing is Ever Free

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Software as a Service – Nothing is Ever Free

Choosing the right software is critical. Make the wrong choice, and you face significant issues, and the rise of SaaS (Software as a Service) has made the stakes that little bit higher.

BACK IN THE DAY.

Just a few years ago, we bought software in shrink wrapped boxes with a licence, CD or DVD and maybe even a printed manual. It was installed on a PC, and if you never made any changes, the likelihood is that the application would have run and run until the hardware died.

For many small businesses at the time, to follow this path was a reasonable strategic decision. They bought the tool and set about using it. Fixes and new versions became available from time to time, but they could be ignored if you were happy with what you had.

SET AND FORGET.

I still see the legacy of this situation today. Old clunker PCs and servers running Windows 2000 or XP, chugging away quietly in the corner collecting dust. 

They are, of course an accident waiting to happen. The software is long out of date, and the hardware is only a minor short circuit away from oblivion, so the slightest of issues will render the whole thing useless. But, as I’ve been told before, “it’s too expensive to upgrade”, despite the obvious cost of dealing with their demise when (NOT IF!) they go wrong.

They will, of course upgrade to a modern solution in time. The only question is whether it will happen by choice.

THE CLOUD.

Fast forward to today, and an increasing amount of software is delivered as a service in a browser. This addresses many of the ownership issues that we used to have. Backups are done for us. There are no installation and versioning issues. Updates just happen without us knowing. And if our PC dies, we can simply use a different one.

SaaS solutions are undoubtedly the future for many software requirements. A few years ago, I might have urged a little caution, primarily because of internet speeds and reliability. Today, I’m an ardent fan. But as I’m wont to say, nothing is ever free.

NO GUARANTEE.

There is now an abundance of SaaS solutions. Some, like Xero, Canva and Cargowise, are multi-million dollar enterprises with thousands of customers, and we can rest assured that they will be available 99.999% of the time for many years to come.

Others are not.

In fact, over 90% of SaaS businesses fail in the first three years.

Software that’s installed locally will keep working, assuming the IT gods are on your side.

SaaS businesses that run out of money won’t.

CAVEAT EMPTOR.

So, how can you tell whether your service of choice is going to survive?

Sadly, there are few obvious signs. Those that fail typically do so because of a lack of market, poor management and other intangible reasons that customers rarely if ever see.

The only easily identifiable issue is poor post sales service. If customers aren’t looked after once they’re on board; they’re quick to move on. This is the nature of SaaS. It’s easy to sign up for and just as easy to leave. So, if the help, training and support are a bit patchy, there’s every chance that others will be leaving, and a high churn rate will kill a SaaS business very quickly.

So, before you buy, do your due diligence. Read customer forums, search online for tales of woe, and find out as much as you can about the service they offer over and above the software itself.

It’s Software as a Service. If both aren’t right, it’s time to find another supplier.

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