In a blog post on silicon.com, Dale Vile says yes, the bandwagon is rolling for SaaS, but companies are hesitant to turn everything over to SaaS -- nothing we haven't heard before.
He then goes on to outline the usual arguments. Businesses don't want to turn over their data to a third-party and they worry about security when the data sits outside the company's four walls.
But then Vile raises another interesting point that SaaS can take upgrade control out of customers' hands. He recounts how a demonstration of an application showed significant new functionality that would boost his business, but because of the nature of the SaaS application, it would be months before the upgrade would be rolled out -- and nothing could be done for Vile's company to access the new functionality before that. As of the writing, it had been six months and would be another three months for the service upgrade -- so Vile's company began looking for an alternative provider that could offer the functionality more quickly.
This led to a lesson that before committing to any SaaS application that customers should make sure they are "on the same page as the provider" for upgrade philosophy and practice, and he pointed out that new releases from faster moving providers could be a distraction for companies that want stability.
I thought Vile raised some interesting points that haven't been discussed as much in SaaS media. What do you think? Is there any way for SaaS vendors to keep everyone happy?
My employer has been in the SaaS business for nine years selling software to educational institutions and from my experience this is definately one of the reservations that is common to meet at customers. Successfull strategies around this for SaaS companies could be:
- Early road maps and transparent product development.
- Minimum impact releases (If you have 500 companies on your SaaS solution there is NEVER a good time for downtime).
- Fast release cycles with smaller but more frequent releases.
- Allowing the customers to decide when to turn on new features themselves.
There are two sides to this coin... as always.
In this context I would equate enhancements to what you call upgrades...
and while you are correct in saying that SAAS limits these enhancements to the ISVs timelines..
The big picture here is $$$$
scenario:
Company A bought Software (perpetual license) as their CRM package. They went ahead and enhanced this application (cost of XXXX) and found out that these enhancement would NOT work on the next upgrade of this software...
Now that is more like reality.. The cost of enhancement and maintenance of these enhancement is the real question??
Is it worth it??