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:
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!