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Andre Yee

Driving SaaS Adoption in the Enterprise: What's Missing?

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There's no question whether SaaS is mainstream today - proponents love the fast deployment and low cost of entry. Companies of all sizes now deploy SaaS in one form or another but uptake is particularly strong among SMBs. Larger enterprises (Fortune 1000/Global 2000) companies still lag in deployment due to a number of factors including the regularly cited issues of scalability, reliability and security.

All of these issues are unquestionably important, particularly to larger enterprises. As we've learned at Eloqua, scalability and reliability are big issues for large enterprises and it isn't something you achieve overnight. It has taken years for Eloqua to get to the point we are today where we process well over 1.6 Billion transactions every day and deliver 99.998% uptime.

But there's also another part of winning the large enterprise market that many SaaS vendors don't get. It has to do with the specific rhythm and requirements of a larger enterprise that is dramatically different from a smaller enterprise. Here's my point - large enterprises aren't simply bigger versions of small enterprises. They actually have dramatically different needs linked to managing operational scale and risks.

Just a couple of ways that large enterprises are different -

Large enterprises have a completely different expectation and operational rhythm. For instance, large companies typically don't deploy latest versions of anything, anytime soon. They will lag. They are unapologetically late adopters when it comes to deploying mission critical technology into production. This culture clashes with the SaaS model of frequent, regular updates. SaaS vendors that understand this dilemma and solve it will open up opportunities in the large enterprise market.

Another business requirement pertains to auditing. Large enterprises understand the need for audits and controls. CIOs of large organizations understand that security for a SaaS solution isn't simply an issue of "keeping the bad guys out" of the SaaS providers network. Using a SaaS solution means your data is in the hands of the SaaS provider. Independent audits of processes and controls within the SaaS providers organization (SAS70) is essential to large enterprises.

Most SaaS vendors understand that scale, reliability and security are essential, non-negotiables to effectively servicing large enterprises. But truly insightful SaaS vendors also understand that larger enterprises have a different set of needs arising from a different operational rhythm. They know that addressing these needs are the key to winning the enterprise market.

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2 Comments

Security and privacy may not their biggest concerns because most of the leading SaaS vendors are hosting data in reputed data centers and ensure internationally approved standards.

Usually large enterprises would be looking at considerable amount of customizations, especially in the case of intelligent business applications. So this 'tailor made software' capability needs can be a deficiency as far as SaaS is concerned. Cost can be another concern.

However there is huge untapped market - Micro, Small and Medium Enterprises. SaaS delivery model would be the preferred choice there.

I think you're right that customizations or maybe high degree of configurable options are a requirement for large enterprises

Andre Yee blogs about cloud computing, SaaS, Web 2.0 and other emerging technologies that matter to businesses.

Andre Yee

Andre Yee is an entrepreneur and technologist with nearly 20 years of experience in the business of technology.

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