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What is SaaS? Why Should Retailers Care?

One of the greatest technology innovations to come to the forefront recently is Software as a Service (SaaS), sometimes called cloud based software. Rather than a specific technology, this is a centralized approach to managing software. This innovation will fundamentally change how software is built, sold and purchased. Essentially, software is hosted by the provider and accessed over the internet by multiple users running specific instances of the software customized to each user’s needs, such as a presentation of a specific brand. This is often termed “multitenancy”, and the ability to configure SaaS this way is a key reason that software providers have clamored to get on the bandwagon. Typically, the retail industry is a late adopter of new technologies because it operates on very narrow margins. However, because SaaS enables rapid deployment of systems at a fraction of the traditional costs, the game is changing, and retailers are assertively adopting this platform.

A SaaS product offers the following advantages over a more traditional software implementation:

  • Reduced upfront investment – because the software is hosted by the provider, there is no need to purchase and securely house servers. There are also reduced costs to deploy the software as the software is already installed and running. This allows the purchaser to focus on the important task of configuring the software to their specific requirements. The cost savings can be significant… IT professionals estimate the cost of implementing conventional enterprise software at 4 to 5 times the actual license fee. Because SaaS is typically provided on a “Pay as You Go” annual or monthly subscription, the need to pay for the entire license fee upfront is eliminated, dramatically reducing implementation costs and risk.
  • Reduced deployment time- Multitenancy means the software is already deployed and tested. The only requirements to deploy are customizing the application to your requirements. While a typical project implementation requires 18 months – SaaS can typically be implemented in as little as one to three months, depending on the complexity of customization.
  • Reduced maintenance costs and time – because the software is provided as a service, the vendor maintains and upgrades the software, meaning you can focus your IT resources elsewhere. The less time your IT staff spends maintaining software, downloading and installing patches and installing upgrades, the more time they can focus on activities that yield greater competitive advantage.
  • Accelerated revenue growth. Rapid adoption of best-of-breed management systems give retailers a competitive edge, allowing them to grow revenues more quickly. For example, Lavi Industries’ sophisticated QtracVR® electronic queuing system is now available “in the cloud.” This application is proven to increase impulse purchasing, reduce shrinkage and line abandonment and dramatically improve the customer experience. (Read the related article on the benefits of electronic queuing systems.)
  • Increased scalability – multitenancy is designed to add new instances of the software with relative ease, especially when the configuration across stores is similar. This means you can rapidly scale implementation across multiple stores, and even implement multiple stores simultaneously.
  • Global availability – It is called the “world wide web” because it is just that. Language and cultural considerations aside, SaaS products can be easily deployed without regard to geography, though installation and testing of supporting hardware infrastructure may be more challenging from a remote location.
  • Greater guarantee of service levels – The SaaS provider enjoys economies of scale when hosting the software, because the cost of a very secure implementation is allocated across numerous instances. This means they are able to invest substantially more in creating a secure and reliable hosting environment and deliver a higher level of service as a result.
  • Reduced cost of new software-feature implementation, access to continued innovations – IT professionals will sometimes decline an upgrade, once a vendor makes it available, because it will be too costly to implement given the benefit you will receive. Over time, even key systems can become out of date, to the point where they are no longer supported by the vendor. Additionally, you may find, after declining upgrades repeatedly, that you are so far from the enhanced product that it is no longer economically feasible to upgrade your system

Retailers, like other enterprises, are finding on-demand Software-as-a-Service solutions a viable alternative to designing and deploying proprietary IT systems. As the cloud continues to evolve at breakneck speeds, even the most strategic core business applications are migrating to SaaS, creating yet another acronym, BPaaS or Business-Process-as-a-Service. SaaS providers are conquering previous objections such as data security, service level agreement and availability of integration and collaboration tools so rapidly that Forrester Research has predicted 2012 will be the year that SaaS becomes mainstream, burgeoning from 37% adoption rate in 2011 to 50%. Surprisingly, experts predict that while the substantial cost savings of SaaS (estimated as high as 40%), and the flexibility to pay as you go that the cloud-based model offers are attractive, for many enterprises, the primary motivating factor for adopting SaaS will be workforce driven as users demand anytime, on-the-go accessibility. In an environment where powerful mobile devices are ubiquitous and bandwidth is plentiful and inexpensive, this is unsurprising. Regardless of motive, the trend is clear… savvy retailers are heading for the cloud.

Some of our Valued Customers

Walmart uses Lavi Industries Retail Queuing Systems.Costco uses Lavi Industries Retail Queuing Systems.Staples uses Lavi Industries Retail Queuing Systems.Office Depot uses Lavi Industries Retail Queuing Systems.Best Buy uses Lavi Industries Retail Queuing Systems.Apple uses Lavi Industries Retail Queuing Systems.Jo-Ann  uses Lavi Industries Retail Queuing Systems.Michaels uses Lavi Industries Retail Queuing Systems.Toys R Us uses Lavi Industries Retail Queuing Systems.Petco uses Lavi Industries Retail Queuing Systems.Burlington uses Lavi Industries Retail Queuing Systems.Ross Dress For Less uses Lavi Industries Retail Queuing Systems.
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