Part 5 Software as a service (SAAS) model
We have three different service models:
1- SAAS (software as a service), briefly discussed below.
2-(IAAS) Infrastructure as a service,
3-and (PAAS) platform as a services businesses.
The basic concept here service providers will offer software applications to customers based upon a subscription model. They charge a specific fee for using the service. Examples adobe applications, google cloud computing, and other third-party applications.
SAAS business models vary, some companies charge based on usage others may charge according to the number of subscribers, or a flat yearly fee. Once you stop paying you will either not be allowed to access the software, or you can continue using the product but without receiving updates or support.
Start A software application for WordPress
From a perspective of a small business owner wishing to start a SAAS business, it is highly recommended to consider starting an application related to WordPress. There is a large user base for WordPress applications, and the development costs will be relatively cheaper because of the popularity and ease of PHP the language used to build the application. There are many programmers available to do the work at a relatively lower price compared to other more complex programming languages.
Start by looking at the top plugins available on wordpress.org site. Find out what problems plugins solve and related demand for different plugins on the market. There are 53,747 plugins many are good quality, some below average, and few abandoned.
You can either choose an abandoned plugin, try to improve on the work already done and create something better. Or another approach is to add extra features to an existing popular plugin and make it stand out from the crowd. Offer features of benefit to the user, focus on your target market and what they need.
It’s important to know the legal side of what you can do with existing open source applications. Check what are your options if you want to modify the work and reclaim ownership. A question to ask can you re-sell the software to the public? There are many articles on this subject, check WordPress forums.
Required income to break even
Many third-party developers of WordPress plugins charge a subscription fee for using their premium applications, in return, you will receive both updates and support. For this reason not only you need to develop the software, but you have to consider resolving conflict issues with other plugins. Also work needed like compatibility with WordPress updates, answering customer’s questions and payments.
You need to have a small team if you don’t happen to be a developer yourself. As a minimum you need one developer, one person to be in charge of marketing, payments and support. Once you grow you add more people to the team.
You will have subscribers paying year after year for the software you develop. If you have enough subscribers, it can be an excellent rewarding business.
Marketing for the software is also necessary; you need to let people know what features you offer and the problems you solve.
You have to estimate the number of subscribers needed to break even. This will help you decide later on if it is feasible to continue with your venture, and the number of customers you need to target for your marketing campaigns.
Advantages of software as a service business: Having a software product sold to as many customers not only once but repeat selling of the same core product year after year. You’re doing a licensing deal, and it is very profitable. A great business to be in especially if you grow your subscribers yearly, and without the need to raise your software price.