The software-as-a-service (SaaS) industry has become among the largest tech industries today. Software-as-a-service describes any cloud-based application delivery and consumption business model where companies charge users a subscription fee depending on their desired level of functionality.
The first modern example of a SaaS company is probably Salesforce, which launched its customer relationship management (CRM) platform in 1999. Back in those days, subscription-based software was considered unviable for large enterprises.
Over time, however, internet technology became sufficiently advanced that providers removed bandwidth limitations – which enabled business processes to become faster and more reliable as a result. Additional improvements in terms of ease of use, core functionality, and cost-efficiency have contributed to the exponential growth of the industry seen today.
Salesforce was founded by Marc Benioff, Parker Harris, Dave Moellenhoff, and Frank Dominguez, who were the first people to launch a platform with the sole intention to offer software-as-a-service.
Adobe was founded in 1982 by John Warnock and Charles Geschke. The company is perhaps most associated with its flagship software for creatives such as photographers and graphic designers.
The company generated revenue of $4.216 billion in 2011, but sales started to flatline soon after. This was caused by the rapid advancement of creative software, which exposed Adobe’s slow 18 to 24-month product update cycle.
Shopify is feature-rich and simple to use for businesses that are new to the world of eCommerce. The SaaS-based sales system saves merchants the hassle of having to maintain a server and there is a range of subscription plans to suit various sized companies.
Atlassian is one of the foremost providers of collaboration tools for distributed and remote workforces. It is a so-called “pure-play” SaaS company devoid of bells and whistles with solutions tailored to meet various team sizes and functions.
Products under the Atlassian banner include Confluence, Trello, and Bitbucket.
Zoho is an Indian B2B multinational tech company specializing in web-based business tools.
The company, which was founded in 1996 by Tony Thomas and Sridhar Vembu, offers a suite of productivity and other tools via the SaaS approach. Zoho addresses use cases across human resources, marketing, IT service management, customer relationship management, and workplace collaboration.
In January 2020, the platform surpassed 50 million users from small, medium, and large enterprises.
Though not exclusively a SaaS provider, German multinational SAP deserves a mention. The company is the largest non-American software company in terms of revenue and the largest in Germany with a market cap of around $168 billion.
In terms of its software-as-a-service offering, the company’s products are mostly the result of several acquisitions, such as Fieldglass, Concur, and Ariba to name a few. Having said that, it also sells proprietary sales cloud, sales intelligence, and CRM-based products.
- Software-as-a-service describes a cloud-based application delivery and consumption business model where companies charge users a subscription fee depending on their desired level of functionality.
- The first modern example of a SaaS company is Salesforce because it was founded with the sole intention of offering software-as-a-service. Adobe is another SaaS company that adopted the model in response to declining sales in 2011.
- Other companies include eCommerce platform Shopify, remote workforce collaboration provider Atlassian, and Indian B2B productivity firm Zoho. German multinational firm SAP is also a significant player despite having other interests.
Infrastructure as a service (IaaS)
Read Also: IaaS Business Model
Platform as a service (PaaS)
Read Also: PaaS Business Model
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