Software-as-a-Service.

You’ve probably heard a lot about it, but why has SaaS become the new big thing in the world of real estate technology? It’s all about delivering more value for software users with improved functionality, constant updates, and a better customer experience.

But what is SaaS exactly? Gartner defines SaaS as “software that is owned, delivered and managed remotely…on a pay-for-use basis.” Also known as cloud computing software, SaaS has been steadily taking over the technology world. In 2016, global SaaS software revenues are forecasted to reach $106 Billion, up 21% since 2015, according to a study by Centaur Partners.

This growth in the SaaS market isn’t slowing down. Though SaaS was first adopted by high-tech companies, it has gained popularity in a variety of industries, including multifamily real estate. Here’s why so many real estate leaders are switching to SaaS products to better manage their properties, portfolio, and bottom line.

The Drag of On-Premise Software

When you think of traditional software, you’re probably thinking of on-premise software. It’s software that you buy once and install internally on your own hardware. If you ever installed an AOL CD on your computer, for example, that was on-prem software. This used to be the norm for all software, right up until the invention of cloud technology in the late 1990’s.

While on-prem software still works and is used by many people today, it has a number of serious drawbacks. The biggest problem with on-prem is that if you want the newest version, you have to buy entirely new software every time and go through a lengthy and complex update process. Because on-prem is a one-time, physical purchase, it is:

  • Expensive to buy and maintain
  • Not up-to-date on new technology
  • More prone to break
  • Inflexible and unable to integrate with other software

When you consider these many drawbacks, it’s no wonder that many people are considering another option for their software.

The SaaS Explosion

SaaS is no passing fad; it’s growing steadily in market share with each year. There are many reasons why increasing numbers of business users have decided to make the switch to cloud-based software. SaaS offers a number of benefits over on-prem software, from the minute you sign up, to years into a contract. One major improvement is that you can pay as you go, and cancel service whenever you want. If you don’t think the SaaS software you’re using provides your business enough value, you can cancel and try another service instead. With on-prem, you’re stuck once you’ve bought it.

This flexibility isn’t the only benefit. SaaS provides a better experience for users, including:

  • Lower cost to entry — no servers or hardware necessary
  • Easier onboarding for new users of software
  • Automatic updates to the software
  • Improved functionality and integrations with other software

With so many advantages, it’s easy to see why SaaS has become the preferred choice for many industries.

The Benefits for Real Estate

As the real estate industry becomes more technologically advanced, SaaS has been adopted by many multifamily organizations. Many of the biggest software names in real estate have transitioned from on-prem to SaaS as the demand has risen. In addition, there are a number of new SaaS products built specifically for the real estate industry.

For investors and property managers, SaaS software offers a major advantage to the old, on-premise management solutions. For example, SaaS software allows huge multifamily organizations to easily integrate a number of different kinds of software across the portfolio. If one management company uses one PMS and another uses a different one, SaaS software makes it easier to integrate multiple solutions. In addition, SaaS can scale up or down alongside your changing portfolio.

If you were unsure about the value of SaaS, hopefully you’re now convinced. You no longer have to pay for expensive, unchanging, inflexible on-premise software. You can get the right software for your portfolio that constantly updates, integrates easily, and costs less. That’s the magic of SaaS.