Software as a Service (SaaS) is gaining momentum due to the rapid emergence and adoption of cloud and mobile solutions. In a tight economy, the associated low Total Cost of Ownership (TCO) of SaaS makes it a very attractive proposition. Applications such as CRM, financial accounting and management, marketing and demand generation, lead and order management, web analytics, digital content creation and ERP have already moved to the SaaS model. Estimates suggest that the global SaaS market will be $16.7 billion in 2013 growing to $21.3 billion by 2015.
In my previous blog, I had written about the growing complexity of the SaaS models, which pose a host of challenges to Independent Software Vendors (ISVs) in the following areas:
- Product Evolution
- Customer Retention
- Building Customer Insight
- Business Agility
- Customer Experience
To address these, ISVs need to partner with an SI who specializes in automation and has the tools and point solutions to deliver a service. SIs have been traditionally bundling products to create holistic solutions and know how to package technologies so that features tie in to customer-specific values. How these bundles are delivered to the client is a business and not a technological problem. It is obvious that SIs can play a decisive role here. A good SI partner can be the stepping stone to a great customer experience. However, there are three distinct reasons why an ISV should partner with a competent SI to create effective SaaS models:
- Service delivery: With data management and analytical capabilities, an SI is able to map customer needs and create a service that fits in well with business needs. The SI can then ensure smooth on-boarding of customers; deliver easy to use self-service models through appropriate tools, mechanisms and automation; and create the appropriate subscription models.
- Customer experience: The key to customer retention in a SaaS model is customer experience. Underlying great customer experience is the ability to build insights into how a customer uses an application, innovate around those insights and deliver value through domain-specific expertise for the ’wow’ factor. An SI is well positioned to deliver the kind of experience that is central to customer retention.
- Maximize profit: An ISV doesn’t need to build the complete
SaaS infrastructure. Instead, ISVs should leverage the expertise and infrastructure of an SI to keep service delivery costs low and maximize profits.
The entire eco-system around a service comprises client needs, building business intelligence, bundling products, managing SLAs and improving customer experience. For SaaS success, an ISV must innovate around this eco-system. ISVs that recognize this and work with SIs at being service oriented will find that they are able to tap into the growing SaaS opportunity.
To get a detailed view on SaaS delivery challenges and opportunities, click here.
Do you think the role of SIs is as important? Do write in with your views.