I've decided to start doing a weekly roundup of SaaS related issues. This idea is shamelessly lifted from my friend Ismael Ghalimi, over at IT|Redux who does a great weekly roundup for Office 2.0. Whereas each of his roundups covers a particular product aspect, mine will pick up on news items, interesting links I've spotted during the week, or connections I've made. I aim to post each edition at the start of the week, and when I get round to giving Business Two Zero a much needed facelift, I'll figure out how to do a separate page/area for the topic. At the very least they'll have a category to themselves. So here goes:
Over at Sandhill, Treb Ryan has a piece titled "Are You Really a SaaS Vendor?". He argues that a lot of SaaS vendors may have changed their technology to a one-to-many model, changed part of their business model to a monthly subscription basis, but still have the mindset in terms of development, sales and support, of a traditional software company:
"In order to truly leverage the power of the SaaS model, vendors must reconsider their base offering. SaaS applications that emulate consumer Web sites in the way they are developed and sold tend to achieve much more success than those that emulate traditional enterprise software."
He argues that SaaS Vendors need to:
- Develop like a Web company
- Sell like a Web company
- Leverage Web technologies
Web-based development is far more iterative, with monthly or even weekly updates with much more direct feedback from the users. The sales approach is completely different, with no large up front deals to help fund the business in the early days. Even the best of SaaS companies don't see significant revenue for the first three years after the initial application release. The emphasis needs to be on attracting customers to the product - pulling them in rather than pushing out the product with traditional sales force on the road. The processes for becoming a customer needs to be easy, with additional documentation, tools and wizards for set up and adding users. The more successful SaaS companies make sure their community of users can provide help to themselves with using web 2.0 technologies like forums , wikis and the like. Go and read the full article.
IDC have published a study - The Adoption of Software as a Service in Small and Medium-Sized Businesses: Perception Versus Reality. They suggest the reality of the SaaS take up by SMB/SMEs is greater than the perception, though still not as fast as some might have expected. That may be true, but we know that a significant percentage of the community is seriously considering online applications, and we aim to publish some survey results to back that up fairly soon. IDC goes on to say:
• The ability to pay for capabilities as needed is the main factor encouraging small businesses (SBs) to use SaaS. Adding new users without difficulty and easing the workload of IT staff are factors nearly as important for medium-sized businesses (MBs).
• Concern about data security is the factor most frequently cited as discouraging the use of SaaS among firms of most sizes.
• SBs are most interested in adding CRM and software to handle remote access from other locations, while MBs are most likely to move to the online delivery of payroll and HR applications.
It's a paid for survey, but you can read their press release with the highlights.
Lastly, I came across this interview with Marc Benioff, the Salesforce.com founder and CEO from November last year. I'll be posting about this site shortly - it's a website aimed at helping people learn and apply the teachings of Sun Tzu to prevent, break down, and overcome barriers to their goals and objectives. You probably know Sun Tzu was a Chinese military strategist from the 5th century B.C. The article explains some of the mindset of the guy in charge of one of the most influential SaaS companies. Interestingly, they say:
"Mr. Benioff is understated and gentle in person, yet clearly immovable and resolved like a mountain."
Understated! This is not quite the person I've seen presenting a year or so ago, but maybe he was in more of a Zen state when he was discussing his application of Sun Tzu's principles with the Sonshi guys. When asked what concept in Sun Tzu's Art of War that he liked the most and why, he replied:
"The concept that I like the most, and the one that I've taken most to heart, is the belief that people can't be united or focused unless they share a common philosophyâ€"a philosophy that gives their effort a greater meaning. "
And
"To be truly successful, companies need to have a corporate mission that is bigger than making a profit. We try to follow that at Salesforce.com, where we give 1% of our equity, 1% of our profits, and 1% of our employees' time to the community."
It's an interesting interview, that will give you a little more insight in to some of the leadership that makes Salesforce.com successful.
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