The shape and color of the Cloud formations have a dark tinge out at the farther edges. The market for Software As A Service applications seems headed into a commoditized future. As more and more software companies offer SaaS products, the swelling competition will exert ever-growing pressure on pricing. Sound familiar? It should, for increasing power and availability of choices coupled with decreasing price has been the reality of the PC market for many years. But that dark future is not inevitable for SaaS. Consider the example of a company that still consistently gets premium prices for a premium product family in the midst of the PC sameness. Even better, a company who enjoys continuing levels of customer loyalty its competitors can only helplessly envy. SaaS vendors who want more than subsistence, take note: Who will be the Apple of the SaaS community?
As the Software As A Service business model continues its rapid advance, the inherent changes for both vendor and customer are both substantial and significant. But once again, Customer Support is in danger of getting shoved to a back burner. I'm sure you've heard the usual statements of “strategies:” “SaaS doesn't need Support, it's included in the subscription.” “We're going to do it all via web self-service.” “The social networking community will take care of it for us.” And, of course, “just keep costs down.” If you'd like to be part of a smarter approach, you're invited to take part in a new benchmarking and research project that's aimed squarely at taking the best of what we've learned from the past and using it to create the future. The result will be best-practices data and better business + operational models for both SaaS and Customer Support.
The shift to the Software As A Service distribution model inevitably brings the end of large dedicated Sales teams for software vendors. The new profits-realization methodology, being based on incremental gains from many income streams rather than from bulk up-front events, does not allow for the costs of large direct sales forces. It also doesn't allow paying for large customer support staffing levels either -- a fact which has vital significance to two different groups. The first is the SaaS vendors, who will need to pay far more attention to user experience in their product design efforts. The second group that needs to be paying very serious attention to the implications of the ever-growing shift to SaaS are the manufacturers of customer contact center technology.
When the features and functionality of Product A are essentially the same as those offered by Product B, what will truly distinguish one software company from another? For a time, SaaS manufacturers held an edge over their on-premised perpetual license based competitors, but those days are swiftly passing. The rumors of a coming shakeout in the on-demand market are steadily becoming observable reality, with SaaS vendor pitted against SaaS vendor with survival at stake. To succeed in this present arena, a company must offer a new and brand-able value to consistently attract and to retain the best customers. The winners will be those that realize that the true product is the long-term partnership. It's not about the software anymore. What counts is the continuing connection to value.