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Decoding SaaS and Downloadable Software: Making the Right Business Choice

• Carrie Saunders • Episode 15

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Ever wished you could unravel the mysteries of Software as a Service (SaaS) and downloadable software? Join us for an episode packed with insights that will empower you to make the right software choice for your business. We dissect the pros and cons of both options, drawing on real-world examples from popular software platforms such as BigCommerce, Shopify, WordPress, WooCommerce, and Magento. From installation to maintenance and updates, we break down the key distinctions that will help guide your decision-making process.

Our conversation ventures further into the details of software selection as we evaluate critical factors such as budget, scalability, user experience, accessibility, features, customer experience, and support. Through practical business scenarios, we scrutinize these factors to determine whether SaaS or downloadable software reigns supreme. We conclude with an invaluable decision-making tool and a recap of key points to solidify your understanding. So, strap in for a knowledge-packed exploration that will equip you to make informed software decisions, tailor-made for your business needs.

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SaaS or Downloadable eCommerce Solution: Decision-Making Guide for Businesses

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Carrie:

Software as a service, or SaaS for short, is a popular term the past few years, but what does it really mean? Is it better than downloadable software? You may be wondering which is better for your business. With your new business just getting started or an established business aiming to ensure that your business goes to the next level, the decision between these two solutions can significantly impact your operations, your user experience and even your bottom line. In this episode, we will be looking into the differences between the two solutions. We will also look into the pros and cons of each. Every business is unique and no one software type or software package is perfect for everyone. So join us as I walk you through steps to help you make the best business decision for you.

Carrie:

Welcome to the eCommerce Made Easy podcast. I'm your host, Carrie Saunders. When we started this business, all I had was a couch, a laptop and a nine month old my main goal To help others. Now, with over 20 years in the eCommerce building industry and even more than that in web development, I have seen a lot. I love breaking down the hard tech and to easily understandable bits to help others be successful in their online business. Whether you're a seasoned eCommerce veteran or just starting out. You've come to the right place, so sit back, relax and let's dive into the world of eCommerce together.

Carrie:

Welcome back to this week's episode of the eCommerce Made Easy podcast. Many clients come to us lost as to which way to go with their tech solution, so in today's episode, we will be discussing the differences between software as a service, or SaaS, and downloadable software, as well as how to determine which one is the best for your business, and you'll want to stick with me to the end, towards the end of this episode, I'll walk you through two different example businesses and their potential thought processes on making the right business decision for them. So, first off, we need to determine the difference between and understand it between software as a service and downloadable software. So, as software as a service kind of explains what the words it is using to describe it, it is a software that you get as a service, which. What that really truly means in the back end, though, is that you don't touch or manage the software. They do it for you as a service, so you're going to be paying this company, probably monthly, potentially yearly to use their software.

Carrie:

You have absolutely no control, pretty much, of the software. You can change the look and feel. You might be able to add features to it with plugins, but in general you cannot manipulate the code of the software. Now, for some of you that might sound great because you're not very techie, but do hang with me here, because sometimes it's not the best solution, even if you're not a techie person.

Carrie:

Now, the other type of software that's typically considered out there is downloadable software. So that software that you can control, you can manipulate the code. It will be installed on a hosting provider somewhere and that could be your choice as to where it's hosted, whereas software as a solution is just hosted with that company and you can't necessarily control where it is hosted. So downloadable, you can control where you want it hosted. You can touch the software. You can have developers touch and manipulate the software. So that's the two main big differences between software as a service and downloadable software. Now some examples of this, just to get a good idea in your head, is big commerce and Shopify are two very popular software as a service e-commerce providers. Now some very common downloadable software that you may be using in your business would be something such as WordPress or WooCommerce, which plugs into WordPress, which gives you the e-commerce ability with it, or something else, such as Magento, open source. So those are some of the popular downloadable softwares that we see most of our clients using today, and also the software as a solutions ones that we see our customers using today.

Carrie:

Now, one of the advantages to software as a solution, which we kind of alluded to already, is the software is already installed for you. You literally just purchase a package and then you have a blank slate to work with with our software in it. With downloadable, you do need to download and install it, or you can hire somebody, a professional, to do this for you, which can sound scary, but you really got to look at the pros and cons of each, because you either have all your eggs in one basket with a software as a solution or you have a bit more flexibility with who you work with with the downloadable software solution. So that's just something to keep in mind in the back of your head. So we need to go into the key differences between software as a solution and downloadable software, so you can kind of get a good idea of the differences between the two Now. We already talked about installation around both of them and software as a solution, you do not need to do installation, but with downloadable, you do, or your hosting provider may do this for you.

Carrie:

Some other things that are vastly different, though, is that, with software as a solution, you are not responsible for the maintaining and updating of that software. Now, that can be a great advantage to some businesses out there. It can really help you if you don't already have a tech partner that works really well with you. It can help if you need something up quickly and just really fast. The one downside, though, is that you don't really have control of when you get these updates. They're going to get pushed to you. You may or may not like the new updates, so it's something to consider. With downloadable, you're likely going to need to be taking care of the maintenance updates yourself.

Carrie:

Now, some of the software out there. This is actually really easy to do, so don't let this scare you away too much and don't close your mind too much. So this is an opportunity for you. I want to make sure that we look at both the pros and cons fully of both systems, because, like I said in the beginning, it really depends upon your business and your business processes. So some of the software out there that is easy to update, even for a tech novice, would be WordPress. It's literally a few clicks of a button in its admin interface and it will update for you. So it's actually not that hard, and we go into this some in a previous episode of how to keep WordPress up to date because it's so important. It's a very popular software. It's super important.

Carrie:

Now some of the other more complicated downloadable software solutions, such as Magento open source. You're going to probably want to either have technical skills yourself or hire a trusted provider to help you with that one, so that is a bit of a disadvantage there, but we'll probably be counteracting that later in the episode too, because sometimes that's actually the way you want to go, even though it might sound a little bit more complicated. Another difference between software as a service and downloadable are their ability to scale. Most software as a service solutions out there can scale with you. You can get bigger packages as you grow and they handle the scaling underneath the hood for you.

Carrie:

With the downloadable solution, such as WordPress, with WooCommerce or Magento open source, this is a bit more of a manual process. Sometimes you might need to get a bigger server for your hosting, and by bigger. I mean more resources and more memory and more CPU, maybe hard drive space. But if you have a trusted provider, this actually isn't too big of a deal. I have found over 20 years and helping people with downloadable software. It actually can be not too big of a deal and pretty easy to do.

Carrie:

But what you need to do if you decide on the downloadable solution is you need to either be able to do this yourself which might sound scary, but some of you I know out there are also techie and can do this or you need to find a trusted solution provider to help you with this and honestly, once you find a trusted solution provider in either situation, I kind of recommend you have one with the software as a solution as well. If you're not techie yourself, they're going to help you out and get you to where you need to be with software maintenance. Now, the two have a pretty big difference on the cost structure as well. So with software as a solution, you're going to be paying a fixed monthly fee or a fixed yearly fee to use their software. For downloadable solutions such as WordPress or Magento open source, those are actually free. Now WooCommerce add-on does cost some money, especially the premium features of it, but downloading these base software many times, for the downloadable ones are free.

Carrie:

So what does that mean for you? Now? Obviously, free initial setup sounds great, but you're going to probably have to have a solution provider help you install it, or hosting provider. You will have some hosting costs with the downloadable solution. So then that makes us think well, maybe software as a solution is a little bit better situation. But that's a little bit complicated too, because as you grow you might incur extra costs with that software as a solution service, depending upon their pricing model, whether it's versus the number of products or the number of customers you have in it. When you add new features to it and turn on plugins that are out in their marketplace, that's probably going to add an extra fee per month as well for that service. So software as a service can grow your costs pretty exponentially if you're not careful.

Carrie:

So if you do go down that route, I caution you to look at the longer picture of what it's going to cost you. Similarly, with downloadable, it might be free to set up and maybe a nice fixed fee to get set up from a trusted tech provider, and then you have a monthly hosting fee, which generally will stay a fixed amount similar to the software as a solution. But down the road you may need new features added, you may need it updated and upgraded. So you're going to have costs there very likely unless you're able to do it yourself. So when you're looking at the two as far as a cost structure goes, you're going to want to determine long term what is this going to cost me? So I wouldn't necessarily look at what does this cost me per month. I would probably look at is it was it cost me in the first year? What is it versus what does it cost me by year five? And do some projections there, because in some situations software as a service is going to be less expensive and a better solution on the budget for those, say, first five years.

Carrie:

Now if you're more established business, a software as a solution could be the more expensive option, especially if you really need the higher end packages that they have lots of add ons added into it to give you the features you need, because you need more rich features, because you're more established and have lots more customers and marketing strategies etc. So the downloadable in that case might actually be the cheaper solution because generally when you get a downloadable solution, so you need to add a feature to it. It's either something you purchase a one time license for or you pay a tech provider such as us to customize it one time and then it's yours to use for the lifetime that you're going to be using it. So really looking at the cost differences between the two isn't clear cut and super simple. You really need to look at short term and long term costs as well. And then we touched on this some already and talking about customizations and integrations.

Carrie:

With software as a service, you are going to find you're going to be a lot more limited in what you can do with that software. Granted, there are usually third party providers that provide add ons that can add features to it, but it is limited to what that software allows other people to be able to change and edit in the software. So you are limited with software as a solution in general, some of them are better at being even more flexible than others, but you really need to look at that right there. And then, with downloadable, it's open source. You can hire anybody reputable to change it. You can do whatever you want with it. You can integrate it with anything else. You have CRMs, customer relationship managers, maybe projects, or you have a place that feeds you products that you want to import into your store, or maybe you push your orders out to somebody that distributes it for you and fulfills your orders. So look at all your business processes, see what features that you need. List those out so that you can determine whether a software is a solution it's going to give you the features and the business processes you need or whether you truly do need something that's downloadable and fully customizable.

Carrie:

So our next step we need to do is determine which solution is right for you, and we've touched on a few pros and cons already in this episode. So what you really need to do is assess your business's needs. What features, what business processes do you need? Are you just starting out and you need something simple? Are you more established and needing more complicated integrations with other platforms or businesses that you're integrating with? What do you really actually need? And then not only think about what do you need right now. What do you need within five years too?

Carrie:

Because we don't want to put ourselves in a situation where we pick the best solution for now but it can't grow with us. We wanna pick something that can grow at least into five years with us, and I say that even though technology changes so fast. But you really need to be looking in the future because, if you don't, you might find that perfect solution for now that really puts you in a bind financially and technology-wise and gives your customers not a great experience as you expand and grow. So, even though you may not land where you think you're going to land in five years, going through the process of thinking of where you want to be and where you're heading is going to help you make a better decision. Here and in this episode on our website at ecommercemadeeasypodcast. com 15, we're gonna provide you with a PDF worksheet to help you go through these pros and cons and help you really lay out what's going to be the best decision for you.

Carrie:

So, as you're trying to determine which solution is best for you, also look at scalability and growth. How can this solution grow with you? Like we talked about, let's look at our five-year mark and see where you think you're going to be and make sure that it can grow not only feature-wise but also capacity-wise, as far as how many people are visiting your site, what features you may want to add in the future as well. So, as you're evaluating which one is right for you, also look at your budget in the future. What is the software as a solution going to cost you in year three, four or five? Try to project that Same thing with downloadable software. What features are you gonna want in the future and what might that cost you to add those to your system later on? So really think long and short-term here when we're also talking about budget, because it's going to change as you grow. Also, as you grow, will it grow with your customer base. Make sure that the features it provides are not too minimal.

Carrie:

I will say Make sure it's feature-rich enough for whichever solution you pick whether it's software as a service or downloadable software Make sure it has the potential to be feature-rich and really work with you as you grow and get bigger, because you're going to want to make sure you're with something that can expand and is always getting updated. Look at their previous years worth of updates. What new features have they added? Really, make sure that that software is active and being currently worked on is also super important. You don't want to start off with software that's already becoming stale. Also, what about the user experience and accessibility with these softwares that you're considering.

Carrie:

Which ones are going to help you out in the long-term here as well? Which ones are easy for you to use? Sometimes the downloadable software is easier to use. Sometimes it's not. Take a look at some demos of each of the ones that you're looking at and make sure that it fits really well with your technical abilities and your staff technical abilities to be able to use it. And you also need to look at this from a customer's perspective. How does it work with the customer? Is it things where they would expect them to be? Does it really help promote ease of usability? Look at all these things and make sure that this is right for you and your business as well. And this one is honestly, I think, super key and super important.

Carrie:

And sometimes people aren't always thinking about this when they're determining which software to use. Sometimes they jump for something that's super shiny and new and they just think it's great and everybody's talking about it, so that's what they want to use. But take a look at their support. Chat with the people that are behind the software or the tech providers. If it's downloadable and there's direct support from the software itself, what are they like. How good of support are you going to get? What happens if your software goes down or gets broken? How fast can you reach somebody and contact somebody to help you out?

Carrie:

You really look at this too, because when you have a website that's established, you've got customers going to it. You don't want to risk having the website go down or get features that are broken or things like that. So just really look at the support that comes along with the software you're looking at, because it's vital to the success of your business very much, so long term for sure. Also, let's look at the user experience of the software that you're looking at too. Can you provide a unique customer experience? Some software as a solution providers don't provide a whole lot of flexibility for the customer, and so you want to make sure that, if you do choose something down that route, you're going to be able to provide something that can give your customers the unique experience that they deserve, because you are unique and you are unique brand and we need to make sure that the software fits you and your personality. Similarly with downloadable software, however, downloadable software is fully customizable and you can change it to meet your brand's personality and features and things like that. So really, when you're looking at the two different solutions, also think about that subtle thing that can really give you the edge is can you give your users a unique experience? And many times that comes down to the features that you can add, the look and feel that you can change and things along those lines. So hopefully by now you can see that software as a service versus downloadable is not necessarily a clear cut answer on which one is best for you. It really just kind of depends every businesses unique and every businesses solutions are unique. Now, obviously we do have some standards that we go by in the world of the web, but there are lots of things that we need to consider here.

Carrie:

Next I want to go into a couple different scenarios, some examples of some potential fake businesses that I've made up and what they might choose for their software solution. So let's first start off with, let's say, it is a small business that's just getting started out. They have maybe five products to sell. It's just a one person shop, just one person running it, no really extra assistance etc. And so they don't have a whole lot of needs as far as features go quite yet. Of course they want some default great features and they're just one person, so they're going to be doing all the things. So what kind of software might be good for them? Well, first off, they need to obviously, like we said, write down all the features they do know that they need. Maybe they have a special set of customers that have a special expectation of what the website features might be, so they might consider that. But in the long run they're going to be looking at their technical two abilities and whether they feel like they need to have a software as a solution service or a downloadable service.

Carrie:

Now for this company, obviously, we just have a little bit of a high level here. Only knowing that little bit of a high level, I would personally suggest that they either have a software as a solution type of product or they have something like WordPress with potentially WooCommerce in it, because WordPress is easy for a one person shop to update. It's not super technical. If they were to go with the software as a solution service, they're going to probably want a tech person to help them up, maybe customize how it looks, but a lot of it will just clicking and going through the motions and getting things set up, so they can probably do all the set up themselves. If they choose something like WordPress that's a downloadable solution, they may or may not need a web developer person to help them get that installed. It's very possible they might if they're not very technical themselves. But once they get it set up and going, it's going to be pretty much hands off and they'll be able to just do the updates themselves, and WordPress is very easy to use too. So for this situation, I would probably recommend either a software as a solutions service or something downloadable like WordPress that is very easy for a person to maintain themselves, probably not something like Magento, open source for this situation.

Carrie:

Now, my second example would be let's say you're an established business and you've been around for 10 or 15 years and you have a pretty decently large customer base and you're looking to revamp your website and trying to decide what to go to. Let's say you also are a drop shipper, and if you're not familiar with that, a drop shipper is really a business that doesn't ever have its own products in stock. It will use some other company to ship their products for them, which is kind of called drop shipping. So they don't have anything in stock, they resell other people's things and they make a profit margin on top of that, and that's how they make their money. They have a large customer base because they've been in business for quite a while. The customers expect just standard features on the site as well as smooth checkout and things like that.

Carrie:

Now, this one, I would lean more towards something a bit more robust and feature wrist, like Magento, open-source commerce, and the reason I state that is, with them having a large customer base, they're going to want to have the capacity to have a lot of customers on the website, a lot of customer information stored over those past 10 to 15 years. They're going to probably have a whole bunch of old orders that they want to keep around for their customers convenience and they are wanting to integrate with a drop shipper, and so what that entails is typically, when you integrate with a drop shipper, the drop shipper has some way for you to take their products and put them in your store, whether that's like an Excel sheet or what's called an API, which is just a techie term way of saying a way to talk to another system to get the information out of it. So they're going to have a way that they're going to need to draw in products to the website and then what they're going to want to be able to do is push out the orders to that drop shipper so the drop shipper can fulfill those orders for them. So they're going to need to push out what products were ordered, the person's name and address so they can ship it to them, etc. So this type of person's probably going to need some customizations, probably customizations that aren't quite as conducive to a software as a solution service or might get really expensive per month to do that, if they do use a software as a solution service, because sometimes those types of plugins will cost per, say, product that gets pulled in or per order that gets pushed out. So if you have a high volume of orders, you're going to be paying a lot more. And with the downloadable solution you can probably pay to a developer to write that, develop it, have it working and then it's a set it and forget a type of deal and you're not having to worry about how many orders are coming through or how many products are getting sucked into the system, because that doesn't cost you any more money, because you're with a hosting provider that doesn't charge you for things like that, like a software as a solution provider does. So that's just a couple quick examples of how you can try to evaluate and really simplified examples. We'll go into more detail in our PDF guide that's going to be in our show notes, but that's some simple examples as to how you can think through, in a very simple way obviously, your process, for which way is better for you.

Carrie:

So, now that we have a good idea between the difference between software as a service solution and a downloadable software solution, let's recap this week's episode. First, we talked about the difference between the two solutions. They really are different and one size doesn't fit all. And then next we talked about how to use that knowledge to better determine which solution is the best solution for our business. And finally, we walked through two example business situations very simple situations and how they might have determined which solution is right for them. So that's all we have for this week's episode. Be sure to visit the show notes at ecommercemadeeasypodcast. com/ 15. We will find our decision-making tool as well as a recap of this week's episode.

Carrie:

Subscribe to our podcast wherever you're listening so you don't miss out on new episodes, and please share with a friend, my goal. As always, the past 20 plus years have been to help other businesses thrive. Also, if you have any questions or thoughts about topics that I cover, I would love to hear from you. Reach out to us on social media or you can drop us an email at podcast at bcsengineering. com. Your feedback helps us tailor our content to provide the insights that you are needing and craving, and you may even be highlighted on the next episode, if you would like to be. Alright, I will see you next week.