Is your software application easily amenable to SaaS models? That is a particularly important question and one that might not be readily answerable. While many modern applications can be adapted or built for SaaS delivery, some software is poorly suited or requires major redesign and resource allocation to become viable as a SaaS solution.

The most obvious applications that are not easily adaptable to SaaS are those systems with no or limited Internet access, which would prevent or hinder cloud-based licensing and delivery. Industrial control software (e.g., PLC programming tools, medical devices, and remote government/military installations) fall into the category. Real-time, high-performance applications, like video editing suite, CAD/CAE simulation tools, 3D rendering engines, or game development platforms, present challenges with cloud latency and bandwidth limitations that could limit performance. Moreover, legacy, heavily customized or monolithic enterprise applications would require significant codebase rewrites. Hardware-integrated or embedded software apps that are tightly integrated with local devices have a dependency on physical proximity and direct hardware access, also making them poor candidates for SaaS deployments.

On the other hand, software that has proven amenable to SaaS deployments in recent years are typically characterized as those with stateless or session-tolerant workloads, web-native architecture, multi-tenancy or easily containerized, low-latency and Internet-friendly performance requirements, or few or manageable external hardware dependencies. The most common examples include CRM and ERP applications, business productivity apps, collaboration tools, and developer platforms, like GitHub.

If you have an app with characteristics that could make an easy transition to SaaS, when is the right time to pull the trigger? In helping our CodeMeter customers transition to SaaS, we have found several key strategic, technical, and market signals that indicated when it was time to seriously explore SaaS. Let’s delve into a few of them a bit further. When is the right time?

• Customers are asking for it: Customers want any time, any device web access, with automatic updates and reduced IT burden, and subscription-based pricing with predictable costs.
• Need for recurring revenue: With SaaS, you can enable predictable, scalable, recurring revenue models while unlocking usage-based pricing and increasing customer lifetime value.
• Product maturity and market saturation: If your product is mature and sales are plateauing in the perpetual licensing model, SaaS enables you to stand out in a crowded market by offering greater usability and speed. A SaaS version can reignite growth and attract new market segments (e.g., SMBs, startups).
• You want to expand globally: SaaS lowers international go-to-market cost and is easily scalable across regions.

So, in general, we believe that ISVs should consider SaaS when customer expectations, competitive pressure, and new business opportunities converge. It’s more than just deciding that it is about time you started hosting your app in the cloud. The decision is all about changing your delivery, licensing, and engagement model to unlock growth.

And, of course, once you’ve made the SaaS transition decision, a bevy of new questions and potential barriers arise. Most importantly, do you have the internal resources, knowledge, and experience yourself or are you better off working with a dedicated software licensing and protection partner like Wibu-Systems? What we have found in helping our customers with the licensing and software protection aspect of SaaS is that the ultimate implementation comes in many shapes and forms:

• Software developers who want to enable their users to access local software with a license kept in the cloud.
• Software developers who supply their users with SaaS solutions operated in the cloud. The required licenses might be tied to a single user or a given number of devices.
• Software developers who want their users to have a reliable means of authentication for using their SaaS applications.
• Software users who wish to install and run applications independently on their own private clouds.

We have many resources that can help plan your SaaS journey with our proven software license and protection technologies tailored to the cloud. A good place to familiarize yourself with SaaS transformation is a review of our recorded webinars, Optimizing Cloud Licensing: Strategies and Best Practices and Cloud Based Licensing in Offline Scenarios.

Wherever you are in your SaaS transformation journey, we're here to support your success every step of the way.