Subscribe instead of buy: What are the benefits of "Software as a Service"?

Industry 4.0: In the past, businesses usually had to buy new software. Today, subscribing to "Software as a Service" (SaaS) solutions is offered as an alternative – or sometimes even as the only option. But what are the advantages and disadvantages?

This article is part of the special feature on digital craftsmanship.

For a long time, it was standard practice for craft businesses to purchase new software and install it locally on their own devices. Office suites, accounting software, and other industry-specific programs typically cost several hundred or even thousands of euros . However, with the advancement of cloud solutions, many software providers have changed how they distribute and bill their products: SaaS solutions now dominate the market , offering subscriptions at manageable monthly prices. But how does " Software as a Service " work? And what are the advantages and disadvantages for craft businesses?

Work flexibly anywhere

SaaS is a model where software and all data are centrally hosted and made available to customers via the internet . Instead of installing the software on their own computers or servers, users access it via a web browser or app. A particular advantage of SaaS is therefore the ability to use the software and personal data from anywhere via the internet . This flexibility facilitates the coordination of workflows and team collaboration. Furthermore, SaaS ensures that the software is always up to date: Updates are handled by the provider, allowing employees to work with the latest features and current security standards from anywhere , without having to worry about it themselves.

Save on IT investments

Another advantage of SaaS is cost savings: Instead of purchasing expensive software licenses, trades businesses only pay a monthly or annual subscription fee . This allows for better budget planning and protects the overall budget. Furthermore, tradespeople save on the purchase and setup of their own IT infrastructure with servers, databases, or networks. Time savings are another benefit: Because the SaaS provider takes care of updates, security, and maintenance , businesses have more time for their core business and don't need their own IT specialist. Scalability is an additional advantage: Businesses can add or remove features or users as needed. This flexibility allows the software to be optimally adapted to the individual requirements of the business.

Consider disadvantages

Photo: © DHB

Craft businesses that rely on Software-as-a-Service (SaaS ) should also consider potential drawbacks: They become dependent on the provider because their own data is not stored on a local hard drive, but in external data centers . This can be problematic in the event of technical malfunctions or the provider's insolvency. Businesses must also place their complete trust in the provider regarding security. Furthermore, a functioning internet connection is always necessary to access business data and cloud-based services . Therefore, in the event of DSL or fiber optic outages, it is advisable to have an alternative access point via mobile internet – for example, a SIM card with sufficient data volume in conjunction with a 4G or 5G router (starting at around €50).

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Focus on security

When migrating to SaaS, companies should prioritize their own data security from the outset . Therefore, providers that adhere to strict security standards and process all data in compliance with GDPR are recommended . Equally important is reliable and easily accessible customer service to ensure that problems can be resolved quickly.

Conclusion

For craft businesses seeking high flexibility, minimal IT overhead, and low initial costs , SaaS can be a viable option . Small and medium-sized enterprises (SMEs) particularly benefit from these advantages. Larger companies with specific requirements or especially high security needs, however, should also consider purchasing software solutions . In any case, it is crucial to weigh the costs and benefits of both options and tailor the decision to the individual needs of the business.

The advantages and disadvantages

Purchased software

Advantages:

• One-time costs: There are no recurring payments after purchase. The software belongs to the company and can be used without restrictions.
• Control: Companies have full control over the installation, use, and updating of the software. There is no dependency on external providers.
• Data security: Since the software is installed locally, the data is located on your own network and can be individually protected.

Disadvantages: 

• Cost: Purchasing software can be a significant investment, especially for smaller businesses. 
• Updates: Companies are responsible for their own maintenance and regular updates, which can require additional resources and technical expertise. - Access: Local software is often tied to a specific computer, making remote access difficult.

Software as a Service (SaaS)

Advantages:

• Budget-friendly: Instead of a large one-time payment, there are regular, predictable costs. This protects the budget and simplifies financial planning.
• Flexibility: SaaS solutions can be easily adapted and scaled according to the current needs of the business. New features can be added or removed at any time. - Mobility: SaaS can be used on any internet-enabled device, increasing mobility and flexibility in everyday work.
• Updates: The provider takes care of updates and maintenance so that companies always work with the latest version and current security standards.

Disadvantages:

• Subscription costs: Although the initial investment is lower, the recurring payments add up over time and can be higher in the long run than purchasing a software license.
• Dependence: Users rely on the provider's reliability and support. Any problems or outages can impact operations.
• Data security: All data is stored in the cloud. Therefore, companies should choose a provider that implements strict security measures and processes data in compliance with GDPR.
• Access: A stable internet connection is required to use SaaS solutions.

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