Software as a Service (SaaS)

Context:

B2B SaaS company Perfios, a provider of software services to banks and other financial services companies, has acquired CreditNirvana, a debt management and collections platform.

B2B

B2B stands for business-to-business, which refers to the exchange of products, services, or information between businesses. It’s different from business-to-consumer (B2C), which is when a business sells to an individual. 

How does B2B work?

• B2B transactions can involve the purchase of raw materials, outsourcing tasks, or enhancing products. 
• B2B transactions are part of the supply chain, which moves goods and services from supplier to customer. 
• B2B transactions are often driven by cost-effectiveness, quality, reliability, and long-term business relationships. 

Overview of the Acquisition

• Acquirer: Perfios (a B2B SaaS provider for financial services)
• Target: CreditNirvana (AI-powered debt management platform)
• Financial Terms: Not disclosed
• Strategic Focus: Strengthening Perfios’ end-to-end financial lifecycle solutions

Software as a Service (SaaS)

Software as a Service (SaaS) is one of the cloud computing models, allowing users to access applications over the internet with a subscription or pay-as-you-go model. Under a SaaS model, the service provider maintains the software, infrastructure, and data, and the user needs to access the application.

Earlier, companies used to install software in the clients’ localised hardware so that they could use the application. So, this meant customers have to pay for the usage of the software beforehand, and also for the hardware on which the software would run.

• The key features of SaaS are
  • Subscription-based pricing:
    • Users pay a set monthly or yearly fee for access to the software.
  • Pay-per-use:
    • Costs depend on the consumption of software usage. It is like paying per number of transactions or data.
  • Scalability:
    • The dynamic provision of more resources will tackle more workload with SaaS applications.
  • Multi-tenancy:
    • This means one version of the application will be run by all the subscribers from host servers.
  • Automated update:
    • All the patches and updates for the software will automatically be updated by the service provider.
• Some examples include email, Calendaring, Office tools, customer relationship management (CRM), and project management software.
• SaaS offers a more cost-effective as well as more flexible way by which organizations will access software products without having to manage the infrastructure or software maintenance.

Credit: The Economic Times