SME And Startup Pricing: It’s All In The Cloud

This guest post was written by Fred Schrader, Search Engine Marketer at MyHub, a leading intranet provider for international brands.

Today’s SMEs and startups have it easy. Thanks to cloud computing, SMEs and startups now have access to powerful apps and online platforms to support their operations.

From CRM and HR through to project management, marketing and accounting tools, the cloud offers software to cover pretty much every aspect of running a small business.

And while most SMEs are familiar with the arguments for cloud computing such as: anytime access, easier collaboration, increased flexibility and more opportunities to simplify integration, it’s perhaps in the area of pricing and costs that the cloud really has the potential to make a significant difference.

And it’s this aspect that is underplayed when it comes to the benefits. And so to set the record straight, in this post we look at the impact of cloud computing and SaaS in particular on pricing for SMEs and startups.

Cost Savings

The great beauty of the SaaS distribution model is that SMEs no longer need to install and run apps on their own computers or data centres. And so rather than purchasing software to install or additional hardware to operate and support it, customers instead subscribe to a SaaS provider.

The provider then retains the responsibility for hardware acquisition and maintenance, as well as software licensing, installation and support. The SME or startup simply logs on and starts working.

For small businesses and startups often with limited resources and space, the advantages are manifold. As well as saving on the more obvious hardware and licensing costs, you’re also likely to see a decrease in rack space and power usage, as well as a reduced need for internal or external IT help and support.

All this translates into lower installation, maintenance, hardware, upgrade and support costs. For small businesses, those savings are significant and mean that there are additional resources to support other critical aspects of the business like product development and marketing.

A good example of the cost savings to be had with the SaaS model is Adobe Photoshop. This used to be very expensive to purchase as a standalone piece of software; however, with the introduction of the Adobe Creative Cloud it then became affordable to many more companies and individuals and almost revolutionised the industry overnight.

The same can also be said of MS Office with the introduction of Office 365 and Google’s G Suite which have made cloud computing accessible and affordable to millions of SMEs and startups worldwide.

Cost Certainty

Cost certainty is just as important to any SME or startup as cost savings. Most SaaS providers operate on a pay as you go model. The actual cost structure can vary but usually it’s on a number of users, monthly or one-time cost basis.

For small businesses this means that asset acquisition costs can now be transitioned to recurring operating costs, which allows for easier, more predictable budgeting. And when resources are limited, knowing exactly how much your cloud computing is going to cost each month is a huge bonus for cash-strapped, time-starved small business owners or startup entrepreneurs.

What’s more, users can also terminate SaaS agreements at short notice if they need to reduce or stop these recurring costs.

Try Before You Buy

Another great advantage of the SaaS distribution model is that most providers will allow you to try before you buy. It’s a very competitive market out there and so nowadays most providers offer the opportunity to test the software before you sign on the dotted line.

It might be a free demonstration, a shared screen tour, webinar or a free trial, but the end result is the same: the ability to really get your hands dirty and assess whether the software is a good match for your business’s needs.

In years gone by many an SME or startup made expensive mistakes in purchasing hardware or software that turned out to be a disappointment or wasn’t all it was cracked up to be.

And because the initial investment was so great, the business simply had to suck it up and make do. Cloud computing and SaaS providers have, thankfully, largely done away with this costly possibility.

Try before you buy also means that businesses no longer need to go through an extended period of testing and piloting as all the hard work has already been done by the SaaS provider. What’s more, the onus is on the provider to refine, update and backup the product if they want to continue to be competitive in a busy marketplace.

In addition, staff training costs are significantly reduced with the ongoing support of the SaaS provider. It’s in their interests to make the software as user-friendly and easy to operate and manage as possible.

Many go to significant lengths to make the implementation process as smooth as possible for businesses. SMEs and startups can, therefore, reap the rewards in terms of lower implementation costs as well as reduced staff training budgets. It also means that the software can be embedded within the organization quickly and easily which leads to further savings in more efficient and effective processes.

A good illustration of the advantages of try before you buy is the cloud intranet. Before the cloud, any business wanting to introduce an intranet would be facing a long road involving many twists and turns: design issues, writing the software, hosting on a company server, piloting, testing, staff training and ongoing management and maintenance costs.

Creating an intranet from scratch isn’t for the faint-hearted. It’s a long, drawn-out process, involving a significant investment of time and resources. Fast forward to the cloud and it’s a completely different story.

There are a number of SaaS providers out there offering tried and tested, easy to setup and manage intranet software that you can customize to suit your business’s needs. What’s more, most providers offer some sort of free demo or trial so that the risk to you in terms of making a wrong choice is greatly reduced.

Consistent, Competitive Pricing

And so as well as all the other often-cited advantages of cloud computing, don’t underestimate the importance of consistent and competitive pricing. After all, access to the very latest technology at a great price for SMEs and startups, especially, could well make the difference between success and failure.