Why and How to Migrate to a SaaS Business Model

10 June 2021

For B2Bs, migrating to Software as a Service (SaaS) can be a game-changer and potentially what you need to finally overtake your competition. Find out why you should consider migrating immediately and how to get moving.

 The recently released 2020 State of Cloud Report by Flexera shows rapid adoption of cloud technology since 2019. According to the report, 60% of businesses use cloud computing in one way or the other. About 91% use public clouds, while 72% are on private clouds.

It also shows that the top 20% of organizations using cloud computing spend $12 million on cloud services per year on average. Meanwhile, the other 74% spend $1.2 million annually on the cloud. This is significantly higher than 2019 when only 13% spent over $12 million on cloud and another 50% spent $1.2 million.

Why is Everyone Migrating to the Cloud?

Businesses move to the cloud for different reasons. However, most organizations that migrate cite four main reasons;

  • Save resources: This is arguably the biggest benefit of moving to the cloud. As soon as you migrate, you’re relieved from costs associated with storing and maintaining your digital resources. Instead, the third-party cloud provider takes over that responsibility.
  • Security benefits: First off, cloud adoption transfers file security responsibilities to the cloud services provider. More importantly, though, you can look forward to much better security as cloud companies are typically behemoths with extensive capabilities financially and otherwise.
  • Collaboration benefits: Cloud computing couldn’t have come at a better time, considering the ever-growing need for collaboration. With cloud storage and access, workforces and project teams can collaborate on tasks from anywhere across the globe without any trouble.
  • It’s a onetouch solution: Think about the time and energy needed to set up and launch a data storage center at any organization. Sometimes it takes months just to get plans approved by the board. And that’s before you talk about finding. With cloud computing, you can join in right away.
  • It frees you to focus on other things: Unfortunately, running a business isn’t merely about storing consumer data. You’ll have bigger tasks such as marketing, advertising, and building better products. “Outsourcing” data storage to cloud providers frees you up to focus on these other tasks.

IaaS, PaaS, and SaaS: Why SaaS Stands Out

If you feel that it’s time to make the jump, you need to choose a suitable cloud computing model. Unfortunately, this is where it gets a little confusing, even though it shouldn’t. There are three broad cloud computing models, namely Infrastructure as a Service (IaaS), Platform as a Service (PaaS), and Software as a Service (SaaS).

          1. IaaS

Infrastructure-as-a-Service providers offer storage, networking, and virtualization services over the internet. They typically charge on a pay-as-you-go model. Essentially, you’re leasing a storage location and server space for building your product rather than hosting the server on your premise. Amazon Web Services, Microsoft Azure, and Magento are some of the best-known IaaS providers.

          2. PaaS

Platform-as-a-Service providers offer the same tools as IaaS providers plus software tools to build applications over the internet. It’s an excellent choice for software developers as you get all the tools you need to build, test, and deploy your apps without the traditional overhead costs. Heroku and the Google App engine are two excellent examples of PaaS providers.

          3. SaaS

Finally, SaaS is a complete cloud computing model and currently the most popular option. It refers to a ready-made software product hosted online and delivered over the internet to subscribers. If you’ve used Dropbox, you’ll know what SaaS feels like. Stack is another excellent example.

In most cases, businesses moving to the cloud are essentially moving to a Software-as-a-Service model. That’s because PaaS and IaaS primarily target software developers.

Why You Too Should Migrate to a SaaS Business Model

SaaS is a great way to meet your IT needs and the perfect model for software developers looking for a convenient way to deliver IT services. Some of the benefits for B2Bs include;

  • A shorter sales cycle
  • Predictable revenue
  • No need for customization
  • Better customer experience

How to Migrate to a Software-as-a-Service Business Model

There are two main steps in migrating to a Software-as-a-Service business model, i.e., technical considerations and business considerations.

  • Technical Considerations

Here you need to address four areas, i.e., planning the migration, defining your existing product architecture, choosing the right SaaS migration model, and granularity.

Begin by splitting the existing solution into parts so that you can migrate those parts to the cloud one by one. Also, use the initial stages as an opportunity to identify the tools and frameworks for migration. Then choose a SaaS migration model. The three main SaaS migration models are silo migration, layered migration, and data migration.

Once you’ve chosen a migration approach, the most important task becomes decomposing your services to achieve optimal granularity.

  • Business Considerations

Business considerations are just as important to SaaS migration as technical considerations. Remember that you’re not just rebuilding your business; you’re also changing how you deliver the product to customers.

We recommend focusing on four things here;

  • Customer value: Are you building a product that offers customers great value, ideally better than when you did everything in-house?
  • Customer loyalty: Will you retain existing customers? Or could the transformation cost you all your loyal customers?
  • Metrics and analytics: Metrics will be your eyes throughout and beyond the migration period. Ensure to incorporate the tools to measure monthly recurring revenues, customer churn, and annual recurring revenue.
  • Integrations: The best software products integrate with other software products to give customers access to all the resources they need for the best user experience. Therefore, building an API would go a long way.

Consider a Migration Partner

Unfortunately, moving from in-house software development to a SaaS model can be a complex and demanding process. It gets even worse when you consider that the changes usually affect everyone associated with your organization, from employees to customers. If you’re feeling a little nervous, engaging an experienced cloud migration expert can minimize the risk. Contact NIX Solutions in case you need help.