Thursday, 25 October 2007

Why SaaS Wins

Sometimes I think we all lose sight of what is driving SaaS adoption. I'm constantly reading about the beauty of multi-tenancy, efficiencies of one to many implementations, reviewing long diatribes about how we should define SaaS (more on that later) and lengthy ruminations about how SaaS will change the world. These all matter and while they are helping to define and improve the industry they aren't the reason 'why' people are moving to SaaS.

So before we forget let's use the following example to demonstrate why SaaS wins.

Case Study of Acme, Inc. - 2007

I'm the owner of Acme, Inc. and it is critically important that we implement a CRM tool to track and report on sales efforts, campaigns, etc.. We've been passing items around on a spreadsheet but it is time to take the next step. So at Acme we gather our 'smart guys' together and they come up with the following recommendations.

Option One:

1. Purchase Big Co CRM tool
2. Purchase OS
3. Purchase a server to install this on
4. Set up a directory system for users to access (another server and OS)
5. Put in a data center (don't have one, I'll use my closet in the office..save some money here)
6. Get DNS set up so my users can access it via a public web url (need remote access for myself and sales team)
7. Buy SSL for my domain name (gotta be secure..important stuff here)
8. Buy a back-up system (can't lose my critical data)
9. Make sure back-ups are good and take tapes off-site..again this stuff is critical (I guess I can take the tapes home with me)
10. Have someone administer it (I 'm lucky as I can have one of my programmers administer, though I'd rather have him or her focus on writing my code/product)
11. Have same administrator continue to update, add patches, check log files, etc..
12. Design my application layout
13. With an aggressive time line probably get this up and going in a month (maybe)

or

Option Two

1. Buy the exact # of licenses we need from an CRM SaaS provider and get started tomorrow

Which one does Acme choose?

This is very similar to what drove the early adoption of the internet. Simplicity, speed, low cost.

Let's not forget the initial driver of the net...that you could quickly share documents between multiple operating systems. Yes, that was it. Sounds too simple right. But simplicity that solves meaningful business challenges is what resonates the strongest in a new market.

Oh, and btw, the analysis took longer than the implementation of the SaaS solution.

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