Does owning the customer matter in a SaaS world.

 

I recently had an interesting debate with someone about ‘customer ownership’ and how this plays out in a SaaS world.  Its perplexing because my verbal sparring partner has some great points, but the root of my unease with the whole debate was based on uncertainty about if it even matters anymore?

 

Lets look at the evolving SaaS reseller and integrator market.  A bunch of companies that have made money off selling, installing, integrating and managing on premise software have seen the writing on the wall and are looking at morphing their business models to support SaaS. In this case they still sell, but in the services are significantly different. The configure, training and provide 2nd level support.

 

The issue is that in the first instance, that customers was ‘theirs’. They held the core engagement and their walk away position was strong.  But in a SaaS world (Saleforce.com, or even Microsoft’s hosted exchange product), the SaaS provider holds the customer, they are no longer the integrators. So they can do the upfront work, but easily get disintermediated in the medium to long term. Imagine if Salesforce.com of Xero or whoever decided to increase revenue by building a consulting and training practice…what then for their channel partners?

 

My counter argument was that in a SaaS world you are on the line every day for great delivery. This includes the channel partner, if you don’t deliver then of course you can loose the customer. There is also a lot of relationship and customer knowledge etc that comes with the deal AND if you are dumb enough to be a one track pony then of course you are under more risk. What i mean is, if all you do is sell Xero or Salesforce.com and you haven’t thought about expanding your engagement into that customer with other services like change management etc then you get what you get.

 

What do you all think, Is customer ownership still relevant? If so how does it work in a SaaS world? Where do you stand on this? I think its important because a good channel model is going to be increasingly important to SaaS to counter the stagnant growth perceptions that exist.

 

 

People, you only got yourselves to blame.

Vodafone NZ’s iPhone pricing has become so topical we even made some US news wires…well done but i’m sorry you only have yourselves to blame…

I told a couple of you repeatedly that it is just a phone. And you kept giving me the bull that its “cool” and revolutionary”… this is just the magic of Steve Jobs and Apple. They got you to be their own marketing machine, and in doing so you made the thing (just a phone) a prestige item and a prestige brand….

Just in the same way Tag Heuer is in watches, Bang and Olufsen in stereos Aston Martin is in cars. You pay over the top for those items because of the brand prestige, why is the iPhone different?  Oh that’s right, it was you that created the brand prestige.

Is the pricing over the top? Certainly, but given the monopoly position Vodafone has on the aforementioned  iPhone product, what else did you expect people?

Office by subscription? What??

News out today that Microsoft is going to offer to sell some versions of its desktop software on a subscription basis. This will be done in typical MS fashion under a cool product name “Equipt”. Confusingly some are calling this part of their S+S play but it seems that the software is locally installed so its not really “SaaS” – just the update feature…

My initial reaction? Cringe… I mean clearly this isn’t SaaS. The cynic in me leapt to the conclusion that this was a lame attempt to combat SaaS with a subscription model.

But then in an IM chat with Ben Kepes I had an epiphany;

What if this is a test case? What if MS is attempting to see if the success of SaaS is in its technical innovation – the software itself and how it’s delivered – or just in its commercial approach – subscription pricing.

Even if MS didn’t plan it that way perhaps we, the public could view it that way? Interesting piece of research in its own right?

Your thoughts as always, are welcome.