The SaaS Advantage no one is Talking About

As the Software as a Service (SaaS) bandwagon expands to accommodate the ever growing number of providers jockeying for position, the REAL advantage offered by this “on demand” approach to providing software is being lost in the fray.

Before I reveal what this advantage is, let’s review the basic (and by now, well-publicized) advantages and disadvantages offered by each approach:

          
                    

As with any technology solution, cloud and on-premise approaches are both valid tools to be used to solve business problems. Depending on the problem to be solved, either approach can offer significant advantages over the other.  Regardless of what you may read in the mainstream media, there is no panacea – a single solution that is preferable in every situation. 

So, what is the REAL advantage of the SaaS model?  I believe it is the incredibly detailed, real-time, down-to-the-click information about how their product is being used. This data warehouse of usability information empowers SaaS providers with a clear competitive advantage over their on-premise competition by offering:

• Insight into which features and functions are most used by customers (enabling SaaS providers to modify pricing models and invest in improved functionality in targeted areas based on usage)
• Visibility into which combinations of functionality/modules are used together by their customers (creating opportunities for SaaS providers to target up-sell and cross-sell initiatives to specific customers in their deployment base)
• The ability to assess exactly what customers were doing just before clicking on the “help” icon (providing SaaS providers with specific feedback that can be used to improve work flows and/or UI presentation to maximize the ease of use and reduce support calls)

The potential uses for this type of data indeed has endless value, and the real-time availability of this information enjoyed by the SaaS providers enables them to be more flexible with their product enhancements and pricing models…which translates to a significant competitive advantage over their on-premise competitors. 

This touted advantage, however, doesn’t necessarily belong to SaaS providers alone. There are forensic software tools that can provide this same information for on-premise providers —in addition to detailing information about your customer’s IT environment and allowing you to resolve technology support issues more efficiently. To me, this capability is necessary for on-premise providers to keep pace with this inherent advantage offered to the SaaS providers. 

However, in my experience, very few on-premise providers are leveraging these tools, and as a result, are not obtaining the most current forensic information about how their customers are using their products.  The question is, “Why not?”

I’d be interested in knowing your thoughts on this topic, and look forward to your responses!

Comments

[Bob NIkolajczyk]

TJ,

Saas models DO have the opportunity to capture more data, however not all companies seem to take advantage of this ‘advantage’.

I look forward to the day that on-premise as well as Saas can capture and leverage MORE customer activity that both reduces down-time and improves customer’s experiences. Too many times within both models I find myself wasting time with either things not working properly (at least in my eyes) or the user interface/interaction is too confusing where I feel like I’m jumping through too many hoops to get a simple task completed.