What are the advantages and disadvantages of SaaS?

Software as a service (SaaS) is a growing market and model where users are connected to and use cloud-based software over the internet. We have put together both the advantages and disadvantages of SaaS to help you understand how this model can work for some businesses, but also some reasons why it may not be the right fit for you.


Reduces Costs

Most SaaS is delivered through a subscription-based model. The cost can be broken into convenient instalments rather than one large payment. Many SaaS companies offer significant discounts for up-front or annual subscriptions, lowering the overall cost. By doing so, a business will not be forced to make a large upfront payment and have time to decide if the service is for them.

The provider maintains the hardware and software maintenance as well as the infrastructure required. Because of this, companies that purchase the product do not need to maintain specialised IT departments or the infrastructure to keep up with the software service, thus reducing the cost had the company had tried to set up a similar operation in-house. 


There are few requirements for a SaaS product, mostly a way to access the information and a reliable internet connection, which are things we take for granted today. Because most SaaS is user-friendly, there is less of a need for experts and professionals to install and maintain the product and it comes with a more intuitive design that's easy for anyone to use. Generally, most SaaS products are compatible with various operating systems and can be managed across multiple devices. 


Many SaaS providers have customisable choices for a consumer to choose from, which increases the possibilities to amend the product to meet needs and demand for different types of plans that a business requires. The customer can pay for what they need, and it is relatively easy to upgrade or downgrade depending on the project and people involved. This is particularly advantageous to companies as they grow and expand. Having the flexibility to change and adapt the service to the growing needs of a company is ideal and often these changes can be unpredictable. Being able to upgrade or downgrade as you go allows a business to always be at their optimal state in their journey.


SaaS providers include maintenance to the hardware and software as part of the service. This includes implementing updates to the product. To keep on top of the marketplace, SaaS companies must constantly roll out upgrades which in turn benefits the customer. The workload and responsibility of such a task are maintained by the SaaS provider and is one less thing for the consumer to deal with, meaning more time is available for other tasks. Because the SaaS company has the expertise and experience with that software, updates are implemented efficiently and frequently without the customer having to consider anything.


Hardware and infrastructure for SaaS are maintained by the company using cloud-based storage, the data and information are protected from any damage, disaster or other events that could occur at a business’s location. This means that the only thing that could stop a company from getting to work is access to an internet connection.


Limited Operations 

SaaS products are limited to what the provider is able to offer. Even though the SaaS company may offer a wide variety of options, packages and upgrades, they are limited by what they are able to provide. As a result a consumer may find themselves needing to invest in a combination of products to fit their needs rather than an all-in-one product. This can end up costly or inefficient if it requires additional training or investment.

Compliance Difficulty

The government has strict data protection regulations. The consumer is responsible for knowing the rules and regulations that apply to their industry and how that might affect or interact with the desired SaaS product. Failure to be compliant would be on the consumer’s hands if they did not do their due diligence in research. Again, though a product may sound perfect, if it does not meet the security standards required by particular industries, a consumer will bump into those limitations.

Data Concerns

Keeping data secure is a top concern for any company, but entrusting your software to a third party company could be a risk. Should a start-up fail unexpectedly, data security and mobility could be significant risks that companies face. The consumer is trusting its valuable identity to an unknown company, which will leave for data concerns.

Lacklustre Performance

SaaS usually runs over the internet, leaving the customer dependent on a reliable connection. Applications that run over the internet experience issues with performance that are beyond the user's control, compared with a local application on the device. If there are problems with the internet, the software will not perform up to expectations, and it is up to the consumer to ensure that their internet service and devices are able to keep up with the demands of the software service. 

Integration and Compatibility

Theres a chance that the consumer finds the perfect solution to their needs through a software service, however it means very little if their systems are not compatible. The customer needs to be aware if the service is compatible with the software that is to be used. SaaS is a convenient option to companies who lack an IT department, therefore these issues would likely end up as an additional cost when the customer is required to pay for additional services to solve the issue. This can lead to a time-consuming and tedious process which can be frustrating when SaaS is supposed to be a convenient option.

Find out how a bespoke software solution from Point100 can solve these common SaaS pain points here.

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