What are a customers SaaS strategies going to look like?

One of the things I’ve become quite conscious of over the last week or so due to project I’ve been working on is that the preponderance of commentary regarding SaaS is scarily absent of customer input. I’ve been as guilty as the next guy about doing this, so hey mia culpa.

What I mean by that is that there a bunch of stuff that ISV’s have made up like the reasons customers buy SaaS, but not a lot from customers themselves.

Here’s how I got to this realisation.  I was catching up on my reading and saw this from Bob at Smoothspan.

For those Enterprise vendors that still haven’t figured out the SaaS conundrum……  You need to have a SaaS strategy now.” 

But my mind transposed some words (ok I mis-read it ) and I interpreted this as 

“ if you are an enterprise …. You need to have a SaaS strategy”

…. Lights on, ephiphanic moment.

So what are a customers SaaS strategies? (Incidentally I think by answering this I also answer the question of  Has SaaS come of age ?”)

Well first up lets look at what a customer are doing. Right now I don’t think many of them have such a thing as a SaaS strategy. If you are lucky, some will have a IT plan linked to a business plan…and that document might have things like speed to market, reduce costs etc. And those statements might lend themselves to SaaS as a solution to that business problem.

I believe that there are some customers looking for point solutions. As Ben pointed out in a previous post, they have a problem, they find a solution, SaaS may well be the best fit so they solve one business problem with this. Examples of this are plentiful, my current employer is a big SAP house, who choose salesforce.com for its CRM because speed to launch primarily.

Some CIO’s who are embracing SaaS may have a plan to fix the chaos of their IT applications by pursuing a SaaS strategy. That is they’re in a big hole through a bunch of legacy investments, and the way forward to give the business what it demands is to embrace SaaS. Large companies do this in traditional outsourcing, so its not unrealistic to see the same strategy applied here.

Other customers may take a more analytical approach, identify their ‘crown jewels’, even get really clear about what they are as a company, choose which bits of IT are critical to them being that company, and which bits do they not have the resources to manage, aren’t doing well or can give to someone much more skilled. Then over time they will move to a SaaS model. (it doesn’t just mean SaaS is the only option).

Some smaller customers, start-ups, early adopters or SaaS companies themselves may make the leap to have all their applications as SaaS. This is obviously easier if you don’t have to migrate or have a culture that is SaaS ready. And I think you could do it. But you would have to self aggregate the applications together to make this real. And that’s the rub.

Amy Wohl puts it perfectly

There is no possibility that customers, particularly enterprise customers, are going to agree to buy dozens of individual SaaS applications from individual very small vendors and then try to deal with their different user interfaces and APIs to say nothing of how to provide any level of interoperability. “

Under these conditions, its actually impossible to have more than a point solution SaaS engagement. By definition you can't have a strategy at all, only a series of tactical plays.

Until a number of SaaS plays are aggregated together to have a common look and feel, its going to be really difficult to have a SaaS strategy. And for that to happen you are going to need Amy’s B model (SaaS as a platform). If you doubt me, have a think about MS office. In its distinct parts, the individual applications probably aren’t the best in class, but because they are all virtually the same to use and navigate anyone with a bit of nous can figure it out. Don’t believe me? Try to navigate through SAP when your computer based learning is Microsoft centric. Its plain weird, illogical and difficult. Where is Lotus notes now without the other suit of applications?

Another example, if you’ve ever used a Nokia mobile, you know that you can pick up just about any Nokia mobile and drive it. Again, challenged with this concept? Think about that old Nokia gag when you got hold of a mates phone and changed the language to something other than english. If you were smart you could still navigate your way out cos it is all the same!

Ben Kepes found this bit about how ISV's are focusing their attention. Many of them SaaS oriented. I'm willing to bet that they not many have a similar look and feel unless they are build apps to work with existing MS desktop applications.

Ok, I’m labouring the point, but its my belief that until someone starts aggregating SaaS apps together and presenting them in a standard way, SaaS adoption won’t become more than a tactical point solution.

So, Have I answered the question? I think so, Customers SaaS strategies will continue to be point solution based for a while yet. Adoption will be dependant on their needs and risk profile.

 “has SaaS come of age”. Nope, by adding another vendor to the mix like SAP it hasn’t. Does add some credibility to the market tho and that can't hurt.



Leave a Reply