SaaS or License – Which Solution Is Better?
Almost every IT technology is available in one of two models: SaaS or licensing. Which solution is better – SaaS or a license?
Initially, if anyone wants to buy software or computer games then they would also purchase a licensing key. The ownership of software would be affirmed through a floppy disk or a distinct combination of numbers on a CD. However, with technological development, companies introduced cost-effectiveness and product usage. Later on, issuing Licenses through subscriptions via Software as a Service (SaaS) evolved the whole process.
The Everlasting License
The purchase mode of IT software was sold through physical markets. The software producers would launch new programs and distribution would take place on floppy disks and CDs. These physical copies would be available for customers in electronic stores and tech retailers. The Internet boom brought a revolution in software distribution and license acquisition. It seems archaic to opt for Licensing software but it is still practiced in this day and age.
It is evident from top software companies like Microsoft that licensing still has a place in the software business. The reason for choosing this method lies in its various advantages. For example, features like single payment purchases instead of renewing subscriptions end the hassle. Secondly, it can be available for an indefinite period without an expiration date. But licensing also comes with certain system demerits. A license key can work for an individual device. It cannot work on any device other than the one being used first.
What Is SaaS?
SaaS stands for Software as a Service. It is a software distribution model that works through a cloud host model. In simple words, a cloud provider will host the application itself or through an independent software vendor (ISV). For example, Software companies like Microsoft are cloud provider hosts as well as software vendors. The software provider will be responsible for the networking, computing, resources, etc. Users can access SaaS applications through network connections and web browsers.
SaaS has a range of products for diverse industries. They are available for both B2B and B2C businesses. Many of these applications include Google Workspace, Shopify, Netflix, and Hubspot. These applications can be used for many business activities like emailing, human resource management, financial management, and sales management. There is an elaborate subscription deal for using these programs. Users can purchase weekly, monthly, and yearly models to provide them with an advanced experience of technology.
The demand for SaaS products is increasing due to two reasons. One is the progress in technology and the other is evolving work mode. There is an increased demand for software that can enhance work performance and increase growth rates. Similarly, remote work mode is prevalent which is sustained due to these softwares. Hence, SaaS subscriptions helped greatly in providing individual workspace and flexibility to log in from different devices making the process more convenient.
What’s Better – SaaS or License?
SaaS has taken up the market for 2 decades now and will continue to expand. But for a better user experience, there is always a question of choice. Which would be better in long-term service, SaaS or License? Both these software models have their pros and cons.
Licensing is an older method but is still in use. It has limited advantages and has many cons due to the advanced software market. The most important advantage of a license is permanent ownership and a one-time payment transaction. There are no additional payments required and also there is no need to rely on the cloud provider. These advantages on the other hand become the cons. Purchasing a license is a costly investment and an updated version would have to be bought again. Moreover, a license key can be used only on a single device limiting it to only a single work system.
Whereas, SaaS has more advantages and comparatively fewer disadvantages. It requires regular payments and access to multiple paid features. The best thing is payment is made for those favored features. It is not device-dependent and is flexible regarding cloud usage on multiple devices. It decreases the responsibility of fixing any problem occurrence as it would be dealt with by the owner. The cons would include no lifetime access or purchase option. There is a required network connection to use the application.
Conclusion
In conclusion, both SaaS and license have respective operations. The decision should be made according to work requirements. Mostly, license investments are made by large companies that want to have complete charge over their data. Whereas, SaaS is mostly owned by small businesses and individuals around the world. So, the decision mainly comes down to work mode and individual needs.
