Software as a Service (SaaS) has become a hugely popular method of software distribution in recent years. But how exactly does SaaS software distribution work? This article will explore the ins and outs of SaaS software distribution.
What is SaaS?
SaaS stands for Software as a Service. It is a software distribution model in which the software and associated data are hosted centrally by a SaaS provider. Users can access the software through a thin client like a web browser. This eliminates the need to install and maintain software locally.
Some key characteristics of SaaS:
- Software is hosted centrally by the provider
- Users access the software through a web browser or thin client
- Software is managed maintained and updated by the provider
- Users pay a subscription fee to access the software
Popular examples of SaaS applications include Salesforce, Dropbox, Slack, Office 365, and more. The SaaS model offers advantages like reduced upfront costs easier maintenance flexible scaling and anywhere access.
How is SaaS Software Distributed?
There are several ways in which SaaS software is distributed to end users. The main SaaS software distribution channels include:
Many SaaS providers sell their software directly to customers via their website or sales team. Users can sign up pay the subscription fee and start using the software immediately. This involves little third-party involvement.
Direct sales allow for greater control over pricing features offered support etc. It also builds stronger customer relationships. However, a large direct sales team can be expensive to maintain.
App stores like Google Play Store, Apple App Store, Chrome Web Store, etc. have become major distribution channels for SaaS apps aimed at consumers. Developers can list their SaaS apps on these stores and make them easily discoverable to a large audience.
App stores simplify distribution by handling tasks like payments updates reviews etc. However, they do charge a commission fee and have guidelines that must be followed.
Resellers and Channel Partners
Many SaaS vendors use resellers distributors and channel partners to sell their software. These are third-party companies that resell SaaS software under their own brand or co-branded with the vendor.
Channel partners leverage their own marketing sales and support capabilities to extend the software’s reach. It helps quickly scale distribution without expanding internal teams. Partners may customize the software as per local needs.
SaaS software can be integrated into or bundled along with another company’s products or services before reaching the end user.
For example, a CRM SaaS app may integrate with a marketing automation tool. The marketing platform then offers the CRM as part of its suite to customers.
This model allows SaaS software to penetrate new markets through strategic partnerships. However, the vendor has less control over packaging and positioning.
Offering a limited but free version of the software is another popular SaaS distribution model. Users can sign up and access the basic software for free but must pay to unlock the full functionality.
The freemium approach allows users to try before buying. Only paying subscribers to convert to long-term users. On the flip side, freemium trials can attract non-serious users and require additional promotional efforts to upsell paid plans.
White labeling refers to removing visible vendor branding before distributing the software. The SaaS app is rebranded under the distributor’s name and logo.
White labeling allows channel partners to deliver a seamless brand experience. Users may not even realize the SaaS software is from a third-party vendor. However, the original developer loses out on brand visibility.
Affiliate marketing is a way of distributing SaaS software through third-party partners who promote the product to their own audience in exchange for a commission or a referral fee. Affiliate marketing can be a great way to leverage the existing trust and influence of other brands or individuals who have access to your target market. Affiliate marketing can also help to increase brand awareness generate leads and drive traffic to your website.
However, affiliate marketing can also have some drawbacks such as lower quality leads lack of control over branding and messaging, and potential conflicts of interest or ethical issues. Affiliate marketing can also require a lot of management and monitoring to ensure that the affiliates are complying with your guidelines and delivering results.
Content marketing is a way of distributing SaaS software by creating and sharing valuable content that educates entertains or inspires your target audience. Content marketing can help to establish your brand as an authority in your industry build trust and credibility with your potential customers and drive organic traffic to your website. Content marketing can also help generate leads by offering gated content or lead magnets that require users to provide their contact information in exchange for access.
However, content marketing can also be very challenging and competitive as it requires a lot of time, effort, creativity, and resources to produce high-quality content that stands out from the crowd. Content marketing can also be hard to measure and optimize as it may take a long time to see results.
Key Benefits of SaaS Distribution Models
Some notable advantages of SaaS software distribution models:
- Reach larger markets across geographies and industries
- Serve diverse customer segments from consumers to large enterprises
- Reduce distribution costs by leveraging app stores channel partners etc.
- Get to market faster without lengthy installations
- Deliver software updates quickly and seamlessly
- Provide flexible pricing and packaging options
- Allow easy adoption of pay-as-you-go and subscription models
In summary, SaaS software offers vendors many possibilities to get their products to customers through app stores, direct sales, channel partnerships, freemium versions, white labeling, and more. The distribution model can be tailored based on the type of software, target users, and commercial objectives. The centralized hosting model of SaaS enables easier and wider distribution globally.