The SaaS model fundamentally changes the sales process from that of selling a license and associated services, to an ongoing relationship where the vendor takes the customer on a (hopefully) never-ending journey.
That’s a big ask for any business whose sales, production and marketing models are all geared up to an eventual big ticket, but it’s almost as much of a challenge to the new entrants who have SaaS in their genes.
Even though their approach tends to be less all-embracing, they too have to tackle the serious issues of delivering a service, to a consistently high level of customer satisfaction and making a profit out of it.
Apart from the onus of achieving 24×7 customer satisfaction, the SaaS model hosts a bucketload of pitfalls in terms of the business’ ability to forecast revenue, ‘lock in” customers, and ensure the funding flow for future R&D.
Hardly surprising that CFOs and resellers aren’t exactly falling over themselves, to dump their predictable income in favour of a voyage into the unknown.
But how predictable is that income? And for how long?
The recession has seen software sales fall off a cliff in most geographies, and the arrival of more and more hosted solutions, albeit offering limited functionality, is giving organizations a hitherto unknown degree of choice as to how they solve their business problems.
For the industry this represents a dichotomy – on the one hand it is being asked to secure revenue for the next quarter’s results, on the other, market forces suggest you should turn around the software behemoth, with its established channels, pricing policies and customer base, and go after new markets with a leaner, slicker product, with less predictable revenue and far less definable markets.
Can the two co-exist? Have any of you successfully achieved it? Is it even crossing the marketing department’s radar, or is the focus still on short-term lead generation?
All opinions welcomed…