Is SaaS (Software as a service) For You?

When my business was still very young, I did just about everything myself. This is pretty typical as in the beginning, you have more time than money to spend. Being a geek, I would often turn my nose up on paying a monthly fee for anything, particularly web based software. These days, SaaS (software as a service) is everywhere, from the smallest startups to the biggest corporations, they are going the SaaS route. Some examples are, Basecamp, Freshbooks and mailing list services like MailChimp.

So what changed? Did I just start making more money and that suddenly meant I had to spend it monthly on software? No. If that is the case then it isn’t very good cash flow management. The sad fact is, it took a big loss for me to re-think and appreciate the value of using hosted third party applications and this is a story I tell people often. Not because I think you should always opt for software as a service solutions but because it really happened to me and I want to help you avoid a similar situation.

What happened?

It was simple. I installed a mailing list script on my web site one day and within an hour, it flooded the web hosts’ email servers to the point it almost crashed. The web host tried contacting me. But of course I had to burn the midnight oil and had went to bed after the install. He unsuccessfully tried to email me for hours and eventually, shut my account down and deleted all my web sites. All in all, the script started sending thousands of emails every hour and I hadn’t even started building my list yet.

Imagine the horror and humiliation when I started work the next morning. Here I was, thinking I was so smart, by hosting it myself and saving a monthly payment. I realized then just how little $20 a month was compared to what was at stake. Many years have passed since but that memory is still fresh and raw at certain periods today.

• If you are in the same boat, considering a hosted software versus one you install on your own web server, consider these points.
• You don’t have to spend valuable time upgrading the software, better spend time marketing.
• You don’t have to worry about people hacking it – and the many hours cleaning up if they did.
• You don’t have to think about the software being compatible with the server or crashing it – a biggie.
• When the system goes down, you have someone in the know to ask and demand for answers – it is a good feeling to be able to let others work out a problem.
• When the system goes down, you don’t have to upset my schedule and delay projects to fix it.
• You also don’t have to hire people to fix it. You know that they have properly qualified developers working on their system, people whom we on our own may not able to afford to pay.

Does that mean you should completely outsource your software? That’s going to be a lot of monthly payments.

Absolutely not. What I recommend is, outsource those that you won’t normally have sufficient technical knowledge to handle yourself or you don’t have someone technical you can hire on a regular basis. If you’re getting started and don’t have much money to invest. I understand you won’t have that option. But at the very barest basics, for your mailing list or autoresponder, sign up with a reputable service. If you don’t spend on anything else, spend the  money on that.

Image by Karl-Erik Bennion