SaaS Business Model PPT

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SaaS Business Model and Its Stages
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What is SaaS?

• SaaS (software as a service) is a delivery model
  in which customers subscribe to centrally hosted
  software. A software-as-a-service (SaaS) company
  leases its software through a centralized,
  cloud-based system.
• A SaaS company is responsible for the servers,
  databases, and other software that enable its
  product to be accessed and used. Customers
  subscription plans can differ significantly
  between companies and some SaaS business models
  offer multiple applications with different
  subscriptions and provide access to different
  services.

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What is the SaaS model?

• The SaaS model is based on the software which is
  used to be hosted on cloud infrastructure, and
  businesses pay a monthly fee to gain access to
  this software. To truly make a SaaS product
  worthwhile, a good amount of coding knowledge
  combined with a good amount of user interface
  design skills is often required.
• A SaaS company offers different types of
  subscriptions for different products or
  end-users, but the subscription model is critical
  to the businesss foundation. Because SaaS
  companies are hosted on a centrally located
  cloud, they are in a unique position to
  constantly update software and push it to users.
• This update and growth process for SaaS products
  or SaaS software is much faster than for in-house
  hardware, which previously required very manual
  processes for the end-user. The subscription
  model, combined with the frequent updates that
  are typical of SaaS products, results in higher
  customer retention than other business models.

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• SaaS business Highly successful SaaS businesses
  can have valuations in the millions of dollars
  that serve a large number of customers and
  completely transform the way entire industries
  think about aspects of their business. In
  general, a SaaS business can be divided into
  three stages.
• Initial or Early Stages In the early stages,
  your staff will be small, you will most likely
  have only one product to focus on, and you may
  not have yet begun to turn a profit.
• At the initial stage, many firms dont have many
  customers, and their products will still be in
  their early stages of development. Most firms
  might be looking for the first round of pre-seed
  funding or bootstrapping routes to keep more
  control over their business.

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• Growth Stages Things start to get exciting
  during the growth stage when companies create
  something that is rapidly expanding their
  products and starting to generate MRR.
• First firms need to expand their team by funding
  and investing in product development and
  iteration and scale of their business to begin
  and maintain their growth stage.
• Venture capitalists and angel investors arent
  the only options for expanding the businesses.
  Some startups go through incubators in their
  early stages, and some established SaaS startups
  find startup accelerators to meet their funding
  needs. Some companies continue to bootstrap for
  much longer periods, while others are so adept at
  generating revenue from the start that they dont
  require external funding until much later.

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• Mature Stage A mature company has a well-defined
  target audience to which it caters and a
  dependable product to which it makes updates.
  When a company is generating good MRR, all of the
  other key KPIs are stable. Mature-stage companies
  may still seek and receive investment, but it
  will be of a much larger scale, with the goal of
  breaking into new markets or buying out
  competitors.

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What is the SaaS business model?

• The SaaS business model work on different
  factors, such as

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• MRR/Recurring Payment Clients do not purchase
  hardware when using SaaS. Because the
  software-as-a-service business and pricing model
  entails providing a subscription service to use
  the app, you will have to worry about paying the
  yearly or monthly subscription rather than just
  once.
• Monthly recurring revenue, abbreviated as MRR, is
  a type of recurring payment. Because SaaS
  companies provide a service rather than a
  product, properly accounting for revenue can be
  difficult. You may receive some cash upfront when
  your customer signs the contract and subscribes,
  but that cash cannot be counted as revenue until
  it has been earned.

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• Increased Customer Retention Customer retention
  is most important to all businesses as the
  retention of paying customers is the only thing
  that keeps the firm afloat. A firm cant claim
  the clients subscription money until theyve
  completed a full term of service unless customers
  sign up for the subscription and they leave after
  in short term, which affects recurring revenue.
  As a result, the SaaS business model places a
  high value on customer relationships and
  upselling.

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• Frequent Upgrades SaaS consistently provides
  quick and more frequent upgrades to its services
  in order to keep end-users happy and have a
  higher customer lifetime value. Software flaws
  can expose customer information to hackers, so
  constantly assessing the state of security fixes
  is a top priority in the SaaS model. Hosting
  their products also allows SaaS companies to
  release new features and new product
  enhancements. By combining this with good
  customer communication, SaaS companies can be
  highly responsive to their customer bases needs
  and feedback.