Preliminary results from The SaaS & Support Project's 2010 research show that some aspects of the software industry haven't changed much despite the accelerating shift to SaaS. In the 1st survey for the year, TSSP participants are asked to rate the level of importance to a range of issues. “Managing Customer Relationships in a Cost-Effective Manner” is being overwhelmingly rated as of “Critical” concern both by all respondents and specifically by SaaS-only companies as well. When asked to identify how their customer support teams were chartered, nearly half across the board are saying that theirs were set up as cost centers, with another significant bloc of companies landing in the “Not Sure or It's Complicated” camp. Less than 25% of the respondents so far have indicated that they run their customer support teams on a Profit-center basis. But regardless of business model and accounting status, the responses indicate that a serious problem which has plagued the industry all along is still with us. Two thirds of respondents say their need for a method for calculating the costs of providing support is either Critical or Serious. How can a company authentically determine its return on customer retention without accurately knowing the costs?
In the traditional perpetual-license model of selling software, the manufacturer takes the majority of their profit up front from the sale of the licenses. In the Software As A Service subscription model, that large up-front influx of revenue and profit goes away, replaced by a more predictable monthly membership arrangement. SaaS profit is realized incrementally instead of all at once.…