According to a publication in Samanage, based on data provided by Gartner, 85% of all new software in 2015 will be delivered to companies under the SaaS (Software as a Service) model. This figure highlights the market’s potential for IT development companies in Latin America and the Caribbean. 

This model is also changing the IT paradigm with respect to consumers, enabling the purchase of sophisticated software that was previously far beyond reach without the need of major investments on licenses and equipment. In fact, SaaS investment is only made on an as-needed basis, typically at an affordable short-term cost.   

The IDC advisory firm expects the SaaS market to reach US$ 40.5 billion in 2014 at a compound annual growth rate of 25.3%. According to Robert Mahowald, IDC Research Vice President, "figuring out how to find and capitalize on the enormous cloud services transition is the number 1 strategic goal of most IT product vendors."

Benefits for users

According to Evaluando ERP, SaaS represents an efficient, profitable and secure solution for end users that can also satisfy the needs of most global companies. It also offers an optimum return on investment, enhanced service experience, increased scalability and user friendliness.

Furthermore, there is no need to have an in-house IT department to improve the different business processes. Maintenance costs are lower and can be more easily predicted since implementation times imply weeks and not months, or in many cases, years.

• Lower investment: no large initial investment is required on hardware and software licensing for delivering solutions.

• Does not require installation: due to its on-line architecture the customer does not need to install and maintain systems in its own PCs.

• Security: software and data are hosted in servers located inside secure datacenters that provide permanent data backup.

• Flexible access: users access the system from any location and computer having Internet access.

• All inclusive: the monthly value of the service includes software, hosting, user support and immediate access to new versions. Hence, technology costs are fixed and predictable.

• Cost-effective: this service method eliminates the need of a big initial asset investment, improving IT cost predictability throughout time.

This method offers several benefits for software development companies or companies offering IT outsourcing services, also known as ITO. For example, distribution is more flexible and simpler since implementation is managed through the Internet. The use and demand for this new market trend is expected to grow.

Also, if the customer maintains the same platform each year, it offers the great advantage of increasing profit vis-à-vis development costs. Additionally, if the services offered are satisfactory it is possible to create a business portfolio based on a subscription model. By way of example, solutions can be designed for multiple companies with similar features and thereby increase the product’s profit margin.

It is important to bear in mind that having an adequate infrastructure and staff can mean the difference between successfully entering in one of the most attractive IT markets today, or be left out. Evaluando ERP emphasizes that distributors must adequately prepare their commercial, technical and post-sales teams to educate and support customers using this service management model since 24x7x365 customer service is the rule.