I've just finished reading a brief article on moving to SaaS by Abraham Sultan, an EVP at Apprenda. The article was entitled "How To Fail Miserably as a SaaS Company" and is a follow up to his presentation on the same. The article can be found here: http://itmanagement.earthweb.com/features/article.php/3842451/How-to-Fail-Miserably-as-a-SaaS-Company.htm.
One of the bullet points caught my eye and is similar in tone to one of my earlier posts on delivery model. Mr. Sultan states, "...customers are expecting the software to be updated frequently and to stay on top of current trends both in your industry as well as with general environmental events."
I believe customer expectation changes quickly in SaaS and is partly a result of the way it has been marketed as well as due to our expectations of what the Internet holds. The Internet is the holy grail of business potential, or so we have been led to believe for years now. It is the culmination of the social experience, it lets us reach markets and customers we never could reach before and its technology is the purple pill for all our previous business technical failures.
A cornerstone marketing statement I have heard over and over is that the IT responsibility is moved from your business to ours and updates are quick and seamless. This is a SaaS tenet. However, expectations must be adjusted for SaaS to succeed long term. Granted, the IT responsibility has shifted and for many smaller businesses, this is a boon. However we must remember what it takes to run one of these data centers and provide 99.98% up-time. We must be careful to market it as a quality improvement and not a magic bullet.
It is true, SaaS companies must deliver change frequently, but more importantly it must be change that is meaningful. Change for the simple sake of change is not change, it is controlled chaos. Meaningful change takes into account the specific needs of the users and targets that business need completely and efficiently. SaaS succeeds when expectations are marketed honestly and meaningful products are delivered. It is then that we understand the Service part of Software-as-a-Service.
Thursday, November 19, 2009
Sunday, November 1, 2009
Modular marketing
In an earlier post I spoke briefly about companies who choose to migrate their large enterprise products to a distributed software as a service model. In doing so, I believe many make mistakes in the transition by failing to see "the trees in the forest". There are opportunities hidden in the application that may present a restructuring opportunity for the organization. As mentioned before, I see this concept called "modular marketing".
Say for example you have a law office management system that handles things such as document management, scheduling, CRM functions, research, and the accounting functions of the firm. Traditionally, for a law firm to purchase your software they would need to purchase all of the integrated components in one management system package. You've likely identified your target market and sold many contracts and have a pretty good client base. The client base may be on a client-server environment or already on SaaS.
The key to modular marketing is looking at the individual business opportunities in the entire product. In our example above, there are 5, but there may be more. Instead of offering the entire product, it makes better sense to offer the products standalone and integrated. Once a data transfer model and format is agreed upon by the individual teams, each component can then be broken up. For example the team that is assigned to work on document management can build a standalone application for document management on its own deployment schedule. Provided the data components needed to make it communicate and integrate with CRM and other functions remain pristine, the company has now freed up the team to be autonomous and for QA to be more focused on that product and less on regression testing the application as a whole when that component is modified.
Secondly, from a sales perspective, the company has reopened the market to be viable for that component. They may have found a unique advantage in document management. Provided that a standard for data transfer is met, such as .xml, it can become easier to integrate with your competitors products by allowing your market to drive them to do so, without purchasing your entire product. As a company, you get your foot in the door by providing a complete solution to a specific business need. Many companies, especially in this economy, are reluctant to make global changes to their infrastructure for fear of the impact of change on their productivity. In this manner, your modular product provides them with a small change with big upside. You will have an easier time later integrating your other products as they change them out because you have the all-important foot in the door.
Lastly, from an internal capital perspective, modularizing allows companies to work on components and deliver faster to market on something salable. They do not need to wait for the restructure of the whole product and can see a quicker return on investment on the components.
Say for example you have a law office management system that handles things such as document management, scheduling, CRM functions, research, and the accounting functions of the firm. Traditionally, for a law firm to purchase your software they would need to purchase all of the integrated components in one management system package. You've likely identified your target market and sold many contracts and have a pretty good client base. The client base may be on a client-server environment or already on SaaS.
The key to modular marketing is looking at the individual business opportunities in the entire product. In our example above, there are 5, but there may be more. Instead of offering the entire product, it makes better sense to offer the products standalone and integrated. Once a data transfer model and format is agreed upon by the individual teams, each component can then be broken up. For example the team that is assigned to work on document management can build a standalone application for document management on its own deployment schedule. Provided the data components needed to make it communicate and integrate with CRM and other functions remain pristine, the company has now freed up the team to be autonomous and for QA to be more focused on that product and less on regression testing the application as a whole when that component is modified.
Secondly, from a sales perspective, the company has reopened the market to be viable for that component. They may have found a unique advantage in document management. Provided that a standard for data transfer is met, such as .xml, it can become easier to integrate with your competitors products by allowing your market to drive them to do so, without purchasing your entire product. As a company, you get your foot in the door by providing a complete solution to a specific business need. Many companies, especially in this economy, are reluctant to make global changes to their infrastructure for fear of the impact of change on their productivity. In this manner, your modular product provides them with a small change with big upside. You will have an easier time later integrating your other products as they change them out because you have the all-important foot in the door.
Lastly, from an internal capital perspective, modularizing allows companies to work on components and deliver faster to market on something salable. They do not need to wait for the restructure of the whole product and can see a quicker return on investment on the components.
Subscribe to:
Posts (Atom)
