The Core Differences Between Collaboration Software and Other SaaS

job care Collaboration Software and Other SaaS

The SaaS marketing agency truly showed its value during COVID-19. This is hardly surprising. As noted by analyst Deloitte, the shift towards a subscription-based economy has been ongoing for some time due to a few factors.

  • There’s no specialized infrastructure to manage with SaaS apps, no local installations required, and the deployment process is as simple as downloading a client. 
  • The subscription-based revenue model of most SaaS solutions is both convenient and cost-effective for developers and customers alike. 
  • Low cost of entry and high scalability significantly evens the playing field, granting even small businesses access to enterprise-level functionality. 

It’s important to note at this point that “SaaS” is primarily used as a catch-all term. There are many different types of SaaS platforms, with purposes that range from entertainment to accounting to productivity. If you intend to start acquiring SaaS businesses at some point, you must understand this. 

We’ll start with a type of SaaS app that everyone seems to be talking about as of late: collaboration software.  

What Is a Collaboration App? 

Cooperation and communication are at the core of any successful business venture. Collaboration software exists to make both of those things happen. In broad strokes, a collaboration tool allows its users to congregate in a sort of digital workspace, coordinating and sharing information as they do so. 

Slack is arguably the most prominent example of a cloud-based collaboration tool, and probably one of the first things that come to mind when you mention collaboration. There’s a very good reason for that. Alongside Zoom and Microsoft Teams, Slack saw almost meteoric growth during the pandemic, per analyst GLG

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What Are the Different Types of SaaS Apps? 

As already mentioned, SaaS is something of a catch-all term, used to refer to any software that possesses most or all of the following characteristics: 

  • A subscription or license-based recurring revenue model. 
  • Usually accessible via a web interface. May occasionally use a desktop or mobile app, which stores minimal data client-side. 
  • Most functionality is only available with an Internet connection. 
  • Device-agnostic. Usually accessible on any operating system. 
  • Built with scalability in mind. 
  • A multi-tenant deployment model, in which a single instance of the software can serve multiple users. 

Unsurprisingly, there’s an incredible amount of variance and diversity in the SaaS space. If you name a use case, there’s a good chance that a SaaS tool exists for it. I’ve listed the most common below.

  • Customer Relationship Management (CRM). Functionality includes sales forecasts, automation of customer-facing tasks, and management of customer data. 
  • Content Creation. Software such as Google Docs, Google Sheets, and Adobe Photoshop. 
  • Content Management Systems (CMS). Software such as WordPress, Wix, and Zyro. Generally allow a user to build, design, and populate a website with content. Ecommerce platforms such as Shopify are technically a subset of CMS. 
  • Enterprise Resource Planning (ERP). Manages business processes such as compliance, risk management, inventory, and budgeting. 
  • Human Resources. Software that helps a business manage onboarding, recruiting, performance, reviews, and (occasionally) payroll. 
  • Payments/Billing. Basically a virtual point of sale system/payment processor. Examples include Square and Paypal. 
  • Accounting. Solutions such as Wave, Transferwise, and Xero that allow management of invoices, bills, etc. 
  • Project Management. Often used in tandem with collaboration software, project management apps include features such as progress tracking, assigned roles/responsibilities, time tracking,  and file sharing. Trello, Wrike, and Monday are all examples of SaaS project management tools. 
  • Communication. Precisely what’s written on the box. Examples include Facebook Messenger and WhatsApp. 
  • Niche. Anything that doesn’t fit into any of the above categories and can’t be classed as a collaboration app. There are as many vertical-specific SaaS apps as there are verticals. 
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Before we move further, it’s essential to make the distinction between collaboration and communication. And collaboration and project management. There’s understandably a great deal of overlap here. 

The best way to distinguish the three types of apps is as follows: 

  • Communication apps typically only include basic messaging and file sharing functionality. 
  • Collaboration apps package additional features atop basic messaging, such as live editing, user groups/channels, announcements, newsfeeds, etc. 
  • Project management apps are made for organization and may or may not include messaging functionality. 

If you want to get really pedantic, you could argue that communication, project management, and file sharing/content management are all simply features of collaboration software rather than distinctive classes. 

Further muddying the water in that regard is the fact that some SaaS solutions fulfill multiple use cases. There are CRM tools that also double as payment portals and project management solutions that feature built-in collaboration as a selling point. Modular SaaS platforms that fulfill different use cases depending on what modules a user selects. 

It’s All In How You Use It

So, what separates collaboration software from the rest of SaaS? We’ve already covered the first (and most important) difference. Collaboration tools are developed with productivity in mind, designed to help remote users work smarter, more efficiently, and more effectively.

Collaboration tools usually serve a far more general audience than other SaaS. There are very few organizations that don’t benefit from the increased connectivity and productivity. As always, there are exceptions to that rule — collaboration software developed for use in high-security sectors, for instance. 

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Finally, because of the current market, the collaboration space is both highly competitive and potentially lucrative. As such, if you’re looking into acquiring a SaaS business, collaboration might well be the route to take. Because although this boom will likely die down in the coming months, cloud collaboration itself, just like distributed work, is here to stay.

About the Author

“Christopher Moore is the Chief Marketing Officer at Quiet Light, which specializes in helping clients sell their internet-based businesses. Additionally, he founded Gadabout Media LLC to inspire, educate, and unite others by creating visually stunning content for clients.”

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