How to fail as a SaaS company

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.