Gadi Shamia's Office 2.0 Blog

RE: Webex, Microsoft and going 100% SaaS

IrinaRozovsky — Wed, 03 Sep 2008 18:36:53 GMT

Should I register again to RSVP for coctail party at 6pm on Thursday?

RE: "Tear down this wall" — the 2008 version

alsmith — Sat, 30 Aug 2008 16:28:13 GMT

I agree that traditional software and history has dictated that consumers are leery of the value that they receive from software. They have had to pay so much for software up front and get mediocre value that it has an effect on us as SaaS providers. We have to provide that value immediatly (in our case in the free 30 day trial) so the customer can decide to make a switch to our system. This puts a lot of pressure on the starting SaaS companies to be high value for lower initial cost.

Our software is priced at $14.99 per month and I have often found that people are surprised at the scope of our software, even though they are initially thinking "what can you really get for $14.99?" Our customers often start with low expectations and are delightfully surprised, or just don't even bother to look at it because they are working off the mentality "if it costs less it must not be as good."

This can have the result of making SaaS profitability pushed out a bit farther, but once adoption cycles play themselves out (assuming you made it through the initial slower growth), they should translate into good solid growth once consumers understand your value.

RE: "Tear down this wall" — the 2008 version

sireland — Sat, 30 Aug 2008 15:07:26 GMT

The problem with SaaS from a software industry perspective is it exposes the tradition that software does not normally provide the full-value the purchaser expected; customers have long bought more software than they actually use or get value for. What salesman would give that up without a fight? In contrast this makes growing a SaaS based company more difficult (forced to make software that delivers overt value) and perceived to be less profitable (lower ticket price) than they are accustomed to.

There is a lot of "smoke and mirrors" on the front-end of software implementations that lead customers to believe it's their fault that the system they purchased months earlier and finally deployed doesn’t work exactly as they expected, or is used as often as they hoped. “Doubling-down” is the reaction so they won't be embarrassed (or accountable) for the large sum of money they invested; the spend continues.

With SaaS the system must deliver the expected benefits immediately — there is no place to bury customer expectations. It has taken a few years for SaaS providers to develop remarkable and useful services that address the fundamental industry-wide challenge of value to customers. To quote Marc Benioff "People are always over-estimating what you can do in one year in our industry and under-estimating what you can do in one decade."

RE: Seven Things That SaaS Vendors Need To Do In Order To Increase Their Desirability

zolierdos — Thu, 28 Aug 2008 18:45:29 GMT

I was about to upmod this post... Oops, where do I click? Sam?

RE: Seven Things That SaaS Vendors Need To Do In Order To Increase Their Desirability

ghalimi — Tue, 26 Aug 2008 22:31:11 GMT

Gadi,

Very cool post. I will definitely apply these lessons to Intalio|BPMS On Demand!