Let’s compare 2 business models: software as a service VS software as a product to find its pros and cons. With a Saas, the code is installed on the server side, and the customer subscribes to the service to access it. With a Saap business model, the customer buys a license key and installs a software on the computer.
Saas vs Saap
- Best solution for protecting the code since it is inaccessible from the end user. With Saas, the cost is installed on the server.
- Subscriptions create a monthly cash flow which is great for a company. But the subscription can end early too. For example, many people use a VPN subscription for only 1 month.
- You will never be able to charge as much money as for a software. For example, you sell a video editing product that would cost 500 euros as a Saap and sell it 30 euros per month as a Saas.
- You need to invest in servers. The more server you have and the more money it costs. This will be a significant expense if your provide a software as a service that requires a lot of CPU resources. On the other hand, when someone buys a software, it uses the client resources.
- As the demand would grow it would require a big server infrastructure which imply investing in labor. Meanwhile, developers would be as much required as for a Saap solution.
Saas may seem a good solution at the beginning from a cash flow point of view but then, there is the cost of server usage and non-renewal of subscriptions.
Saap allows to save server resources. Now, we see that many code editors provide licenses that are limited in time. Consequently, they can get the benefit of the Saas subscription without the disadvantage of spending money in the server infrastructure.
The real undeniable advantage of Saas is the protection of the code.