The software landscape is undergoing a major transformation: on-premise solutions are giving way to SaaS (Software as a Service) applications, which are gaining popularity at a lightning pace. According to a 2010 Numeum and EY study, SaaS represented only 10% of total software revenue. This figure rose to 43% in 2020 and 45% in 2021. However, for IT teams accustomed to traditional models (on-premise in particular), the nuances of SaaS can sometimes be difficult to grasp.

Unlike a classic software sale where ownership is transferred, SaaS works like a rental.

You don’t own the software, you use it for a fee. This distinction, subtle for an intangible product like software, is nevertheless essential.

Modern SaaS can be summarized in three key components:

Aujourd’hui, les logiciels se déploient sur le cloud, sur site, sur mobile ou sur ordinateur. Le cloud offre une grande flexibilité, tandis que le sur site répond à des exigences réglementaires spécifiques. Le déploiement initial peut être en libre-service ou accompagné. Le déploiement d’un outil en SaaS ne dépend pas de la puissance de votre machine, ni de votre système d’exploitation : il est unique, commun à tous, pour une plus grande accessibilité.

Sales are generally buyer-initiated and fueled by strong marketing. The buyer is looking for a product that meets their need. Many SaaS companies have a “PLG” (product-led growth) rather than “Sales-driven” growth, meaning that the product sells itself in self-service, or with sales support at purchase.

However, more and more SaaS companies need to develop outbound sales, especially for complex solutions with B2B customers. The Business Model depends on the number of decision-makers involved in the sale, the complexity of the solution, and the amount of the contract.

Is self-service essential for SaaS? For annual contracts of less than €1,000, it is crucial, as a sales effort would not be profitable. Between €5,000 and €10,000, personalized customer service is possible. Beyond €10,000, complete customer service and an onboarding process are essential for retention and growth.

For contracts under €1,000, inbound marketing dominates because prospecting is expensive. Beyond €10,000, prospecting becomes profitable as it covers commercial costs: prospecting teams, sales support teams, training, equipment, etc.

A key feature of SaaS is recurring billing, whether monthly or annual. If the billing is NOT recurring, it is NOT SaaS.

This billing model allows a SaaS company to better project itself, anticipate revenues to manage its expenses (R&D, recruitment, etc.) and to start each year with a priori higher revenue than the previous year, unlike a traditional software company which starts from scratch each quarter.

On the other hand, this makes forecasting more complex for the end user. Prices can change (and go up) at any time:

• – At the end of the contract, if the SaaS decides to increase their prices (happened last year with Salesforce, Trustpilot, and so many other SaaS)
• – They can also evolve during the contract according to the customer’s use, and additional costs may be added for additional services or integrations.

In Summary, SaaS Differs from On-Premise Software in Many Ways Their economic model, their flexible cloud-based deployment, and their recurring pricing model are three major elements.