I have been following a discussion in the blog-sphere about software models for the past few weeks. The software models being discussed are on-premis commercial software from the likes of Microsoft, Oracle, etc., then open source software (OSS) also on-premis and SaaS – Software as a Service technology. In this mix the ASP delivery model is mentioned, as a way to deliver commercial software and OSS via the internet.
Should you, the small business entrepreneur care? The answer, in my opinion, is YES and NO!
The Enterprise Irregulars are a group of industry experts who closely follow the software business. They content that the Software’s Sky is Not Falling, and they discuss this from a software industry point of view.
What is not mentioned very often is the CUSTOMER, while worries about software commoditisation are discussed, customers and clients are commoditised. This could not be made more clear then by this statement:
….. I belong to a group of bloggers called the Enterprise Irregulars. We analyze the software industry from a variety of perspectives, that of software company executives, services providers, consultants and investors. Our common denominator is many, many years of watching companies, technologies and customers come and go from fashion in our rapidly changing industry. …..
Anyone read anything about user perspective here? There are some small attempts here, namely by Zoli. But most of the others are more interested in the technicalities of “delivering” or “pushing” the product. While this is a factor, it is not very important to the user.
There are those how still believe, as Bill Gates apparently once said:
…. you don’t want to get into a price war with someone that has more money than you.”
The last time Microsoft was really successful was when it gave the “Internet Explorer” away. OSS is still here, so if you give it away, like we do with AccountsOffice, then there is NO price war, or is there?
I hope for the big boys that they are better then this, because if they are not, then time is really up. What the software industry is really worried about is loss of control over the customer. With the advent of SaaS technology, and the “pay monthly, no contract, cancel anytime” philosophy, the boxed vendors are in trouble.
And that is the reason why you should care. When you buy any “boxed” software product you have paid all your money upfront. So if you need any help then you’ll have to pay again, and again. There is a whole industry out there that is all about installation and support. Very expensive support.
SaaS changes that dynamic fundamentally, the software vendor will have to earn your money every month again and so has to make sure you, the customers, are happy. That forces the software vendor to think about support from day one of the product cycle, not at the end of it, if at all.
Having had the “pleasure” of installing SAP in my previous company, I learned all about support, installation and pre installation planning and the cost of it. By the time we were finished, the software part was “cheap”!
So is SaaS only for small business, you be the judge of that in light of these horrendous installation costs. And let me be clear about this, they do not only correspond to customization.
A few weeks back I was encouraged by an interview Dennis did with Sage’s Paul Sobart, when it is mentioned:
Service and support represents the powerful glue where we can provide customers with the right level of expertise
Bravo, almost right, it should have been:
Service and support represents the powerful glue where we can provide customers with the right level of expertise and we can learn from our customers how to make our product better and more relevant
While I am only interested in the very small business aspect of all this, I can’t help to think that mid-size business and even large corps. are also interested in these issues.
Could it be hurricane season for the software business?
And this is why you should NOT care!
This little fairy is in the open! SaaS vendors with any fore-site have long moved on from this discussion, with concepts like our Small Business Infrastructure. They see no need to “push” to clients, but to “partner” with clients.
It is happening as I write. For me the unrivaled strength of the SaaS model is the ease of collaboration, deployment, and cost effectiveness and the fact that I have to deal with my “partner customers” all day. This is yielding benefits for my clients and for my company.
I have never heard of a company, who’s aim it was to run an IT department.
BTW, combine this with OSS, and I think Guy had a point! We are using OSS components and offering 24/7 live support for these components too, and so do others!
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