Definition of Saas: understand everything about these new tools

Definition of SaaS: what is it?

SaaS - for Software as a Service - has been adopted by many companies in recent years. The principle: the use of digital tools through the Internet.

When a company wants to deploy new digital functionalities, it must make a strategic choice. Either it implements the software directly on its computers, or it accesses these applications via the Internet. This choice of SaaS is therefore the alternative to installing tools on site.

In practice, the employees of a team that has adopted SaaS connect to their Internet browser and go to the site of the software that interests them. 

This method implies a total transparency for its user. No software or hardware to implement, install, update, or maintain. 

It is generally sufficient to pay a subscription to access the online services. These services include many features such as :

• The ability to access the tools from any connected computer or mobile device;
• A harmonized infrastructure for all applications and their users;
• Collaborative and synchronization options that facilitate production between different teams, even if they are distant.

Services in SaaS format include customer or member databases (CRM), instant messaging and e-mail services. 

Some human resources departments use software as a service, for example. The interest: to facilitate the management of their candidate database . 

ATS - for Applicant Tracking System -, real recruitment management tools, can thus take the form of SaaS to facilitate the work of HR.

Also note that SaasS companies need to avoid certain mistakes when it comes to taxes and sales taxes. 

SaaS services are part of the As-A-Service features, along with other cloud solutions for businesses. Other tools include:

• XaaS - Everything as a Service - which bundles all the As-A-Service possibilities in a package;
• DaaS - Office as a Service - which outsources a digital office infrastructure;
• PaaS - Platform as a Service - which enables the development and management of applications in the absence of the necessary local hardware.

What place for the SaaS market in France?

In France, the SaaS market is growing. In fact, it represented :

• 1.937 billion euros in 2017, or 15% of the software market
• 3.528 billion euros in 2021 or 24% of the software market

The SaaS market in France is growing at an annual rate of 16%, with an estimated growth rate of 25% for 2023.

Why adopt SaaS solutions?

More and more companies are adopting SaaS solutions. These decentralized tools have undeniable advantages over software implemented directly on site. These strengths deserve to be explained.

Easy access from anywhere 

It doesn't matter if employees are in the office, at home, or elsewhere. The online system of SaaS services allows them to access all functionalities from any connected device.

This first advantage allows companies to deploy telecommuting, which has become increasingly popular over the years. Online features offer the same capabilities, minus the need to support them on local computers.

Quick installation and maintenance

Access to SaaS services requires only a simple connection (after activation and subscription). Companies benefit from considerable time savings when using these new generation tools.

In addition, the customer does not have to manage updates as they would with an on-premise application. CRM and other online systems are maintained by the vendor, saving the user company time and energy.

Services in perpetual improvement

SaaS systems adapt to the needs of companies and their use of tools. These mechanisms are known for their ability to evolve based on customer feedback and requests.

Providers usually offer updates based on user feedback. This is why SaaS devices are usually accompanied by serious and communicative customer care.

Real savings for such an efficient service

The absence of installation and maintenance costs means serious savings for companies. In addition to saving space on local hard disks, no employee has to maintain the implemented software. 

The company's IT or communications department can, for example, focus on other more constructive projects.

Solid security systems

In addition to the updates provided by the supplier, the latter guarantees customers rigorous security mechanisms .

SaaS systems benefit from locking devices and data security developed by professionals in the field.

What are the problems encountered by the SaaS model?

Difficulty in obtaining funding

SaaS systems have undeniable advantages, which explain their success with companies in a wide variety of sectors. However, this model is not completely free of limitations, primarily related to financing.

The so-called SaaS companies, therefore completely digital, encounter difficulties during the creation phase. 

Due to the lack of tangible assets of these companies, traditional banks are sometimes reluctant to accept financing requests.

More concretely, credit institutions sometimes ask for precise data, especially financial indicators. However, you do not necessarily have this information when you start your business.

To support these SaaS structures in their development, some organizations like Karmen have set up financing solutions. These solutions complement the support provided by traditional banking institutions.

Possible complications in terms of RGPD

The first few years of SaaS deployments have been accompanied by some challenges related to the General Data Protection Regulation(GDPR).

In particular, some customers have noted a mismatch between their expectations and the privacy policies practiced by vendors. 

Therefore, you should check precisely how the data protection rules are integrated into the commercial contract.

Today, SaaS experts have reinforced their security requirements. These requirements are almost systematically integrated in the suppliers' agreements.

What financing solutions for a SaaS company? 

A specific financing

In its financing strategy, a SaaS company must first check the presence of certain specific functionalities in the bank. This selection criterion is essential to anticipate any difficulties related to the development and growth of your company.

In particular, you should check if accounting services are offered by the banking institution. A 100% digital company also benefits from efficient team management and sharing tools.

On the purely financial side, make sure you have a proposal that includes a variety of payments and receipts, with regular follow-ups.

The specific needs of SaaS companies call for adapted solutions. This is why online banking institutions such as Qonto or October have developed formulas designed for these companies.

Knowing how to choose a professional bank for SaaS involves analyzing what these organizations offer.

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Karmen offers adapted to SaaS

Karmen offers financing solutions that take into account the constraints of SaaS companies. These solutions offer you the possibility to use Revenue Based Financing to reinforce the growth of your digital company.

In practice, Karmen studies the company's accounting and financial structure in detail. This allows us to build the best SaaS financing solution within 48 hours, if the company is eligible.

Karmen 's offering is based on two key advantages:

• The speed of access to funds: allow 48 hours to see the release of cash without guarantees or hidden fees. Our principle of transparency allows you to have the start date of the reimbursement immediately.
• Non-dilutive financing: you retain full control over the management of the business with our tailored solution. You will not have to provide any share capital in return.

Karmen is the benchmark of excellence in FBR. As proof of its success, the company has just raised €50 million in debt.

The model SaaS model has been making its mark for several years. Its many advantages have pushed many companies to take the plunge, while promoting the development of new of new financing solutions.t.

While online banking remains a generally satisfactory solution, Karmen offers a tailored solution based on flexibility. Learn more about Karmen's Revenue Based Financingofferings, please feel free to test your eligibility to our formula.