Using software has become almost inseparable from running a business. Looking to the future, you probably don’t see that trend changing do you? Neither do we.
You would agree then, that choosing the right software to help you manage different parts of your business is of extreme importance, and we’re not just talking about online accounting software here.
Due to cloud technology, software as a service (SaaS) providers have started changing the way that businesses can access the programs they need. A monthly or annual subscription is becoming an increasingly common method of payment to use software, rather than traditionally paying a full license fee up front.
So how do you know you’re making the right decision when choosing which software to use and how much to pay? Assuming that the software you’re thinking about adopting has features that cover all of your needs, there are a few questions to get answers to. Let’s take a look at what they are.
Software as a service pricing can be fairly different from provider to provider depending on how they wish to structure their service and what industry their software application is built for.
You sign up, pay a flat monthly or annual fee, and off you go. Simple and easy, you know exactly was you’re going to have to pay ahead of time.
You get free access to certain functions of the software but you have to pay to be able to use every ‘premium’ feature. Alternatively, you may have free access up until a certain usage point. You might be able to put 100 contacts into the software free of charge but you’ll have to pay a subscription fee to enter any more.
Tiered pricing is similar to freemium but without the free part, unfortunately. You will pay a certain amount for your subscription. However, once you pass a certain usage point, such as our 100 contacts, your subscription fee will increase.
There may be more tiers such as 200 or 300 contacts. Once you pass these milestones you’ll have to pay an increasing amount.
Commonly, SaaS providers will combine at least two of the previous pricing structures when charging you for your subscription. They may have free usage level that is the first of many pricing tiers depending on how intensively you use the software. There may be a flat charge to access the software and an additional tiered fee based on how many contacts you have in the database.
It is important that you identify what the pricing determinant is. For example, the number of subscribers to your mailing lists is the price determinant for newsletter software providers such as Mailchimp. The more subscribers you have the more you will pay.
Bear in mind that some software providers will have multiple price determinants.
2. User access
How many people in your organisation will need access to the software, and will they get it? This is a key question. There is little point in adopting software for your business if people who need to use it to do their job won’t be able to use it.
Some software providers will allow an unlimited number of users access as part of your overall subscription while others will use it as that second price determinant we just talked about.
If you have 5 people who need access to your newsletter software and 5,000 contacts on your mailing list, the pricing level you choose has to at least allow for both of these numbers.
3. Data Caps
Putting a cap on the amount of data or storage is another way that software providers can lock you into certain pricing tiers. Instead of charging you for the number of contacts that you have some companies will charge you for the amount of storage space in the software’s database that those contacts take up. It isn’t really the same thing but it amounts to a similar tiered pricing strategy.
Make sure, when you are doing your research, you find out whether the amount of data your account creates is relevant to the price of your subscription.
4. Data Security
The data that your business owns and controls is one of its most valuable resources. We have a whole blog post covering ways to keep it safe. Therefore, when it comes to choosing software, data security should be a key point of interest for you as the perspective buyer.
Who is the actual cloud hosting provider for the software service? For example, here at Big Red Cloud, we provide online accounting software. However Microsoft Azure host our service on their servers and we work closely with them to ensure that data is always as secure as it can be.
Ask for the data security policy and hosting details if you are unsure. Perhaps the most important thing to note, is how many backups of your data is taken and how often. Having the provider automatically backup your data will mean that if anything does go wrong with the software then you should be able to resume from a certain point in time rather than from scratch.
Sometimes things will just go wrong. Even the best software in the world will run into issues sometimes. Providers can set themselves apart by how they handle issues once they arise.
What is the software support going to be like for your business? What support channels exist? Is it all done through email or is there someone at the other end of the phone when you really need to talk to someone. What hours will support be available?
Be aware of what the level of support will be for your business.
You’re probably going to be spoiled for choice, whatever type of software you are looking for. These issues should be on top of your research list when it comes to making your buying decision. It’s going to be a lot more expensive to implement the wrong software and have it changed than taking the time to make the right decision in the first place.