Despite long held beliefs…
October 22, 2009 by Yuval BriskerThey say you can’t go wrong buying IBM … that this is the common manager’s solution to a buying conundrum where a well known, more traditional technology or provider is pitted against a more innovative technology or a newcomer . But if you look at the evidence over time, it’s actually just as risky, maybe even riskier to NOT take the road less traveled and go for the new.
One of the common myths about SaaS is that because you pay an ongoing usage fee for as long as you use the software service, you actually end up paying more over time than traditional on-premise license based legacy software. Well, we at TOA, of course, have refuted that common ‘wisdom’ with all our customers, who ultimately ended up opting to go with us, to go SaaS. But for many, that misguided notion still exists. And we can prove that it is in fact misguided. The long term benefits of SaaS are easily calculated, if you use a REAL calculator not tinted by those long biases.
A new survey by Forrester Research validates what we in the SaaS world have long known, namely, that Software-as-a-Service Can Save You Money — Even in the Long Term.
The Forrester Research basically says that SaaS pricing models may offer potential for better long-term return on investment (ROI) than on-premises solutions.
That…may come as a shock to some!
The report — based on surveys with SaaS-solution vendors and users, past inquiries, and case studies with clients of Hewlett-Packard, Salesforce.com, and Workday (a provider of on-demand human resources software) — identifies long-term benefit in three aspects of a SaaS initiative:
- rapid deployment of applications, freeing enterprises from the need to buy hardware;
- access to pre-configured or easily configured solutions that firms can turn on in days or weeks with minimal configuration; and
- better user-adoption rates thanks to familiarity with the Web
Forrester also says that SaaS helps reducing the dependency on information technology and administrative personnel and support — responsibilities that might otherwise have meant hiring more people or even outsourcing to external service providers.
Instead, SaaS providers often handle bug fixes and patches seamlessly.
I hate to be cynical about this – but for those who are not ‘onto’ SaaS yet…all this may come as a revelation… for those of us who are living and breathing this business 24/7 it’s just our life: We are Service Providers. And a Good Service Provider delivers a Good Service. For us that means all the above plus more. And the world is not just catching on…it’s there.
2 Comments so far
by Joe Young
On October 22, 2009 at 11:24 pm
That was a well written post. SaaS can also be the friend of the accounting and finance teams. So many companies have been trapped in creating budgets for capital expenditures that they simply can’t fathom having something of value that cannot depreciate. Soluton providers obviously comprehend a subscription based model and slowly but surely enterprises will understand how to fit SaaS into their business.
by Yuval Brisker
On October 23, 2009 at 4:37 pm
Joe – excellent point. We are always hoping that the finance team will be part of the conversation, they can quickly see the value created and are usually big advocates.