SaaS Challenges for 2009
January 21, 2009 by Raj Sheelvant
Software as a Service is not a ‘game-changer’ in the enterprise software market. According to Information Week, listed below are the 6 things that must happen for SaaS to gain widespread acceptance in 2009. Click here to read the entire article.
1) Get Commitment from Microsoft, Oracle and SAP: Although Salesforce.com, Google and other startups are very aggressive in evangelizing SaaS delivery model, Microsoft, Oracle and SAP has a large ‘sticky’ customer base. These big three vendors are taking tentative and occasionally unsteady steps toward SaaS.
2) Escalate From “Very Good” to “Excellent” Uptime Ratings: Big Customers are reluctant to let go of their control on their data. A robust system will help gain the confidence of customers.
3) Offer Cheaper, Easier Integration: Seamless integration with other custom built proprietary applications will help reduce migration cost.
4) Prove SaaS is less expensive than Traditional Software: SaaS has to prove superior TCO (Total Cost of Ownership) compared to Traditional Software.
5) Build a Better Record of Profitability and Growth: Although SaaS is a viable business model; several smaller vendors are still struggling to become profitable.
6) Convince Customer That They can live Without Customization: Every organization wants to customize the Enterprise application to suite their business process.
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Comments (2)
As a provider of both Saas and On-premise CRM and issue tracking solutions, I read this article with great interest.
A few comments:
1) While Saas is now “proven”, there will still be those who are uncomfortable with the idea. Because we offer both Saas and On-premise CRM, we can allow customers to have the best of both worlds. Even move between the two models in under 30 minutes.
2) Many customers have “had it” with the likes of Microsoft, Oracle and SAP. They are simply unable to be easily customized without huge consulting dollars. It is possible to allow customers to have Saas that is customizable if you are willing to look beyond these three. For example, look at the effort to customize MS CRM:
http://www.adaptds.com/issuetrackingblog/2009/03/13/microsoft-crm-dashboards-vs-enterprisewizard/
3) Reliability, as you mention, is huge. Thankfully, servers and internet connections are more reliable than ever. I think we’ve cleared that hurdle as well.
Pat
Adapt Data Solutions – Saas and On-Premise CRM
Pat, thanks for your comment. As more organizations join the bandwagon of ‘cloud computing’, SaaS will get more acceptable by IT decision makers. But the article points out that we have not reached that ‘tipping point’ yet (I think its just a matter of time).