What is SaaS
SaaS actually refers to the cloudification of a software application, such as office software. If you want to make an excel report, you need to download the office software installation package first. After installation and activation, you can design and make it. For your little friend, you have to save and send it to your little friend. Your little friend designs it and then saves it and sends it to you, which is extremely cumbersome. But now with Tencent Online Form, you can open and design the form on the webpage as long as you have an internet connection, and you and your friends can edit it at the same time without saving and sending it.
Cloud computing consists of a three-tier architecture:
- The bottom layer is the IaaS layer: it can be simply understood as big companies dig a big hole in the mountains of Yunnan and Guizhou, put a large number of servers in it, and then rent out the hard disk space of these servers to small companies, and then charge them rent; this is capital and The hardware business.
- The middle layer is the PaaS layer: compared with personal notebooks, when you buy a notebook computer, if it does not have a Windows system installed, then the computer is useless, even if it has a 1000G hard disk, so you can’t just do IaaS business, you have to install the hard disk Install an operating system in it, sell it to customers, and let customers build applications by themselves
- The top layer is the SaaS layer: still compared with personal computers, what customers really need is to use the browser on the computer to query information and use office software to make reports, so you have to install these software applications for customers, and then customers directly provide these Just pay for the app
SaaS: Software as a Service - software as a service
PaaS: Platform as a Service - platform as a service
IaaS: Infrastructure as a Service - infrastructure as a service
From a global perspective, the top-level SaaS is the main body of the cloud computing market, accounting for 63.6% of the public cloud, while my country is just the opposite, the bottom-level IaaS accounts for the majority, and SaaS only accounts for 28.2%. As shown in the figure below, this may be related to the attributes of my country's "infrastructure maniac"!
To understand SaaS from the business model, you can compare SaaS with traditional software, such as EHR, ERP, MES and other systems:
- Traditional software mainly focuses on big customers and big contracts, and in order to win big contracts, a lot of marketing and sales costs are invested to gain customer trust; when corporate resources are tilted towards marketing and sales, they will naturally give up on the product. When the customer invests a large amount of project costs at one time, the risk of poor product will be fully borne by the customer. Therefore, once the customer signs the contract, they can only pray that the supplier is reliable.
- The SaaS model is "try first and rent later", which greatly reduces the risk of customers. Even if they suffer a loss, they only bear the one-year subscription fee, and there is no need to spend huge sums of money at one time, so the risk is mainly borne by the supplier. , so suppliers also have to make good products.
Therefore, it can be seen that the project style of traditional software is a vicious model, while SaaS is a benign model.
China's SaaS is 10 years behind the United States
The United States is the birthplace and leader of SaaS, which started as early as 1999. 2020 ushered in a bumper harvest, with 18 SaaS companies going public throughout the year. At present, the market value of Adobe and Salesforce is as high as 200 billion U.S. dollars, the market value of Zoom, ServiceNow, Square and Intuit is 100 billion U.S. dollars, and more than 20 other companies have a market value of tens of billions or tens of billions of dollars. In addition, the transformation of Office 365 , Oracle, IBM, ADP, Autodesk, etc., the SaaS in the United States is like a galaxy, and it is one of the biggest highlights of the digital economy. Only around 2007 in our country did enterprises test the SaaS business. Until the last ten years, with the establishment of original SaaS companies such as Youzan and Weimob, as well as the comprehensive transformation of Kingdee and UFIDA, my country has truly ushered in the development of SaaS. Therefore, in terms of starting, our country is at least ten years later than the United States.
Comparison of the market value of the top ten SaaS companies in China, the United States and other countries (unit: US$100 million)
Data source: Tencent Research Institute, January 25, 2021
Problems Encountered on the Road to SaaS in the United States
From the 2020 Annual SaaS Trends – Blissfully Report report, it can be seen that a small company with 100 employees in the United States uses close to 100 SaaS products. Although the market is very mature, there are still some problems:
- The churn rate of SaaS products is very high. According to the report, 30% of the applications in the US market will be lost every year. This shows that the integration of applications is a trend, and no one wants to find a bunch of applications when working.
- The resource waste of SaaS is very serious. For example, when employees leave the company, the company may forget to reassign accounts, resulting in idle account quotas that no one is responsible for, resulting in waste of corporate resources; or the homogeneity of many functions of different applications will also lead to waste of resources.
- When there are too many SaaS products in an enterprise, the enterprise IT department will have to face the problem of managing a large number of SaaS products, and the coordination of management personnel, applications and the relationship between them is a problem
You can learn about the Vendr platform in the United States , which is a SaaS software transaction service provider
Chinese SaaS players
