Software As a Service (SAAS)— Efficient, Affordable Cloud Computing Comes to Digital Signage
Software as a Service (SaaS) is a form of cloud computing, with applications that are hosted, and made available via the web by the software developer.
The digital signage community has been stirred up lately by none other than the editor of this very magazine over an issue that has changed the entire software development community. That issue is Software as a Service, or SaaS. Other names include cloud computing, or ASP models, but in a nutshell, SaaS applications are hosted and made available via the web by the software developer. When Digital Signage Magazine executive editor David Keene started surveying the industry in July to try to sort out who is in what camp in this industry, a great deal of discussion ensued as to what solution was right for what application: SaaS, or premise-based solutions for digital signage content management.
The market has embraced the SaaS model, with many content management vendors now offering their solutions via this model. The idea is fairly straightforward: Rather than purchase a digital signage content management software application and install it on internal servers, users purchase subscriptions to an SaaS version, which they access from anywhere by logging into a specific web site. Rise Vision was one of the first to move to the SaaS platform, and has been completely web-based since 2005. We bet our business on this model, and have grown with the industry. While our initial decision was prompted by the benefits we knew we could deliver to the digital signage user community, we have also discovered how powerful SaaS solutions are for digital signage integrators. SaaS has enabled us to develop custom programs that get integrators out of the no-win, cost-cutting game created in our increasingly commoditized market. And, SaaS has enabled our resellers and integrators to build long-term, recurring business by strengthening their relationships with customers.
Why SaaS is the Right Choice for Digital Signage Users
Let’s start with the user community, as they are the people that we — as developers and integrators — all serve. The SaaS model has enabled more companies of all sizes to even consider deploying digital signage for several reasons, including ease of use, lower costs, and more features and functions:
• Ease of Deployment: There are a lot of great things about digital signage, but it is no secret that it can be extremely challenging to build an in-house digital signage network. Users are confused about what hardware, software, and networking equipment they need, and they struggle to piece it all together. This is one of the main reasons to consider SaaS — it makes digital signage much easier to deploy. Companies don’t need to purchase hardware or employ dedicated IT help — all they need are large format displays and internet connectivity. End users can focus on their key objective of delivering their message.
• Low Cost of Entry: There are a lot of costs associated with building a secure, scalable digital signage network, and they can be overwhelming for companies just starting out. With SaaS, the developer bears those costs, not the user. SaaS providers build the fault-tolerant architectures using reputable hosting firms like Rackspace to ensure their systems have the highest security and are sitting on redundant power grids and internet connections, and are backed up every few hours.
And when the network grows, most SaaS software is built on an architecture designed to support thousands of displays. SaaS-based systems scale better than most premise-based systems, which often are designed for fewer screens and require new architecture and new hardware to support growth. Most SaaS developers scale subscription pricing as well, further reducing the cost per screen. Companies looking to deploy a thousand screens would be hard pressed to build out a fault-tolerant architecture and manage the system for the annual cost to use an SaaS provider.
Premise-based solution developers often tout their approach as being the most robust option for large enterprisewide digital signage deployments, but the reality is that any deployment is only as robust as the hardware it runs on. Building up that type of infrastructure and maintaining it at peak performance is costly. SaaS vendors are responsible for making the investment on your behalf, and, because they are making it on such a large scale, they can afford the best.
• Latest and Greatest Features and Functions: SaaS offers another significant benefit to end users: because the software is centrally hosted, it is easy for the developer to implement new features and functions on a regular scheduled basis. Users get the benefit of the latest and greatest without the hassle of having to purchase the next version and deploying it themselves, because these upgrades are part of their subscription cost.
• Secure Access and Operations: The biggest perceived fear about SaaS is usually security. But the evolution in cloud computing is changing that perception. IT professionals see developers employing state-of-the-art technology to host and secure their facilities, minimizing risk. Most credible SaaS providers have a dedicated network security employee who constantly monitors and patches their servers to keep them up to date and secure. This cost is spread out over a large client base, making it feasible, while most self-hosted networks can’t justify the expense of a dedicated person to provide this level of security.
As in any purchase, it is true that buyers must perform due diligence on vendors, whether they choose SaaS digital signage or an on-premise solution. Because SaaS is the new kid on the block, some buyers are leery of basing their entire system “in the cloud.” There are risks with this approach, but no greater than those associated with investing in a lot of hardware or a software solution from a vendor that goes out of business, or in choosing a platform that developers ignore. Just ask any BetaMax buyer about that.
The best way to handle this is to ask the same questions of a potential vendor that you would for any major purchase: How long have you been in business? What do your customers think of your product? What are your future development plans? Do you have the capability to execute? The right answers will enable you to have as much confidence in your purchase as possible.
These are just some of the main points why SaaS has been a winning solution for end-user customers. But as we have explored the capabilities of the platform, we’ve discovered a host of reasons why SaaS delivers benefits for the AV integrator community as well.
Rise Vision’s Private Network Program enables resellers and integrators to brand the software as their own. This kind of private branding of the SaaS makes it difficult for an end user to break their digital signage solution into pieces to award it to the lowest bidder.
Why SaaS is the Right Choice for Digital Signage Integrators
Sales have exploded in the digital signage market, in part due to the lowered barrier to entry provided by SaaS. Increased sales haven’t eliminated the challenges faced by the integrator and reseller community. Competition is fierce, and companies are willing to cut prices — and margins — to win deals. The current recession has only made that situation worse. While we understood the benefits of SaaS for the enduser community, the hyper-competitive market helped us understand how SaaS could benefit the integrator and reseller community as well.
When we first made the switch to developing our content management solution on an SaaS platform, we thought that resellers’ biggest challenge was overcoming end user’s barriers to entry in digital signage: the high cost to purchase all of the equipment and the challenge of putting it all together. We also knew that resellers and integrators wanted to get beyond the one-time sale and establish a way to build a recurring revenue stream with their customers. It’s true that our SaaS solutions helped resellers and integrators overcome those challenges, but the more we talked with them, the more we realized that their most pressing problem was to find a way to stand out from their competition in what was very quickly becoming a commoditized market. All of the sudden, it seemed that everyone was selling digital signage solutions, and at cutthroat pricing. Our solution helped them attract customers, but how could they retain them when the guy down the street was willing to sell for less?
Most successful companies find they must face that question at one point or another on their path to growth, and the answer is generally the same: find your unique value and focus on developing it and promoting it in a way that customers want to buy, and for which customers are willing to come back to you time and time again.
Customer Retention is the Secret Weapon
That’s when we realized that SaaS could help our resellers differentiate themselves in a compelling way. We developed a Private Network Program that enabled our resellers and integrators to brand the software as their own. SaaS enabled us to develop this program, where integrators can customize our content management software to build their own, branded solution. Via this program, our integrators can brand login screens with their own logo and identity, and incorporate marketing and other messages directly to customers. They build on top of our platform, and wrap it with other products and services to offer a private-labeled solution. Some resellers bundle in creative services, specially configured media players, or other offering that highlights and promotes their unique value to their customer base. This enables them to focus on selling their added value, rather than entering into a death spiral with the reseller down the street to see who can slash their hardware margins the lowest.
Resellers and integrators can wrap our solution with unique services and market it with creative pricing, using it to strengthen customer relationships. For example, using SaaS software as a base platform, resellers whose value proposition is creative services can develop a bundled offering that charges $300 to $400 per month for a service package, and include the digital signage software for free. It’s far easier to make the sale when the customer sees the significant value they can receive with the unique bundled offering. It also makes it all but impossible for an end user to break their digital signage solution into pieces to award it to the lowest bidder.
The bottom line is that SaaS-based digital signage enables resellers to overcome the challenges they face in an extremely competitive market, while building long-term customer relationships. It is a tool to enables them to highlight their unique differentiators and sell more of whatever they are good at selling. It enables resellers and integrators to break away from the commoditized race that destroys margins, and build the type of business that earns customer respect, loyalty, and trust. SaaS-based digital signage is a winner for our industry, and it will continue to change us all for the better.
Ryan Cahoy is managing director of Rise Vision, Inc., a developer of Software-as-a-Service digital signage content management solution.